(m) Provisions, Contingent Liabilities and
Contingent Assets

Provisions are recognised when there is a
present obligation (legal or constructive) as
a result of a past event and it is probable that
an outflow of resources embodying economic
benefits will be required to settle the obligation
and a reliable estimate can be made of
the amount of the obligation. The amount
recognised as a provision is the best estimate
of the consideration required to settle the
present obligation at the end of the reporting
period, considering the risks and uncertainties
surrounding the obligation. If the effect of the
time value of money is material, provisions are
discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific
to the liability. When discounting is used, the
increase in the provision due to the passage of
time is recognised as a finance cost.

Contingent liabilities may arise from litigation,
taxation and other claims against the Company.
Where it is management’s assessment
that the outcome is uncertain or cannot be
reliably quantified, the claims are disclosed as
contingent liabilities unless the likelihood of an
adverse outcome is remote such contingent
liabilities are disclosed in the notes but are not
provided for in the financial statements.

Contingent assets are not recognised but
are disclosed in the notes where an inflow of
economic benefits is probable.

Provisions, contingent liabilities and contingent
assets are reviewed at each balance sheet date.

(n) Employee Benefits
Short-term Benefits

Short term employee benefits including
accumulating compensated absences are
recognised at an undiscounted amount in
the Statement of Profit and Loss for the year in
which the related services are rendered.

Post-retirement Benefits

Defined Contribution Plans

Retirement Benefits in the form of Provident
Fund which is a defined contribution schemes
is charged to the statement of profit and loss
for the period in which the contributions to the
fund accrue as per the relevant statute.

Defined Benefit Plans

The Company pays gratuity to the employees
who have completed five years of service
with the Company at the time of resignation/
superannuation. The gratuity is paid @ 15 days
salary for every completed year of service as
per the Payment of Gratuity Act, 1972.

The gratuity liability amount is contributed by the
Company to the gratuity fund maintained with
Life Insurance Corporation of India, exclusively
for gratuity payment to the employees.

The liability in respect of gratuity and other
post-employment benefits is calculated using
Projected Unit Credit Method and spread over
the period during which the benefit is expected
to be derived from employees’ services.

Re-measurements of Defined Benefit Plans in
respect of post-employment are charged to
the Other Comprehensive Income.

(o) Taxes on Income

The tax expense for the period comprises of
current tax and deferred income tax. Tax is
recognised in Statement of Profit and Loss,
except to the extent that it relates to items
recognised in the Other Comprehensive
Income or in Equity, in which case, the tax
is also recognised in Other Comprehensive
Income or Equity.

Current Tax

Tax on income for the current period is
determined on the basis on estimated
taxable income and tax credits computed in
accordance with the provisions of the relevant
tax laws and based on the expected outcome
of assessments / appeals. Current income
tax assets and liabilities are measured at the

amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax
laws used to compute the amount are those
that are enacted or substantially enacted, at
the reporting date.

The company offsets current tax assets and
current tax liabilities, where it has a legally
enforceable right to set off the recognised
amounts and where it intends either to settle
on a net basis, or to realise the asset and settle
the liability simultaneously.

Deferred Tax

Deferred tax is recognised on temporary
differences between carrying amounts of
assets and liabilities in the financial statements
and the corresponding tax bases used in
the computation of taxable profit. Deferred
tax relating to items recognised outside the
statement of profit and loss is recognised
outside the statement of profit and loss, either
in other comprehensive income or directly
in equity. The carrying amount of deferred
tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer
probable that sufficient taxable profit will be
available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date
and are recognised to the extent that it has
become probable that future taxable profits will
allow the deferred tax assets to be recovered.

Deferred tax liabilities and assets are measured
at the tax rates that are expected to apply in
the period in which the liability is settled or the
asset realised, based on tax rates (and tax
laws) that have been enacted or substantially
enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
tax liabilities.

p. Financial Assets, Financial Liabilities and Equity
Instruments

Financial assets and liabilities are recognised
when the Company becomes a party to the
contractual provisions of the instrument.
Financial assets and liabilities are initially

measured at fair value, except for trade
receivables which are initially measured at
transaction price. Transaction costs that are
directly attributable to the acquisition or issue
of financial assets and financial liabilities (other
than financial assets and financial liabilities
at fair value through profit or loss) are added
to or deducted from the fair value measured
on initial recognition of financial asset or
financial liability.

The Company derecognises a financial asset
only when the contractual rights to the cash
flows from the asset expire, or when it transfers
the financial asset and substantially all the
risks and rewards of ownership of the asset
to another entity. The Company derecognises
financial liabilities when, and only when,
the Company’s obligations are discharged,
cancelled or have expired.

The Company assesses at each date of
balance sheet whether a financial asset or a
group of financial assets is impaired. Ind AS 109
requires expected credit losses to be measured
through a loss allowance. The Company
recognises lifetime expected losses for all
contract assets and / or all trade receivables
that do not constitute a financing transaction.
In determining the allowance for expected
credit losses, the Company has used a practical
expedient by computing the expected credit
loss allowance for trade receivables based on
a provision matrix. The provision matrix takes
into account historical credit loss experience
and is adjusted for forward looking information.
The expected credit loss allowance is based on
the ageing of the receivables that are due and
allowance rates used in the provision matrix.
For all other financial assets, expected credit
losses are measured at an amount equal to
the 12-months expected credit losses or at an
amount equal to the life time expected credit
losses if the credit risk on the financial asset has
increased significantly since initial recognition.

Derivative Financial Instruments:

Derivative financial instruments such as
forward contracts, to hedge its foreign currency
risks are initially recognised at fair value on the
date a derivative contract is entered into and
are subsequently re-measured at their fair

value with changes in fair value recognised in
the Statement of Profit and Loss in the period
when they arise.

Cash Flow Hedge

At inception of designated hedging relationships,
the Company documents the risk management
objective and strategy for undertaking the hedge.
The Company also documents the economic
relationship between the hedged item and the
hedging instrument, including whether the changes
in cash flows of the hedged item and hedging
instrument are expected to offset each other.

The company is exposed to foreign exchange
risk arising from foreign currency transactions,
primarily with respect to USD. Foreign exchange
risk arises from future commercial transactions
and recognised assets and liabilities
denominated in a currency that is not the
company’s functional currency (inr).

The risk is measured through a forecast of
highly probable foreign currency cash flows. The
objective of the hedges is to minimise the volatility
of the INR cash flows of highly probable forecast
transactions. The company risk management
policy is to hedge forecasted foreign currency
sales for the subsequent 12 months. As per the
risk management policy, appropriate foreign
currency hedges are executed or undertaken to
hedge forecasted sales.

The spot component of forward contracts
is determined with reference to relevant
spot market exchange rates. The differential
between the contracted forward rate and the
spot market exchange rate is defined as the
forward points.

When a derivative is designated as a cash
flow hedging instrument, the effective portion
of changes in the fair value of the derivative is
recognised in OCI and accumulated in other
equity under ‘effective portion of cash flow
hedges’. The effective portion of changes in the
fair value of the derivative that is recognised
in OCI is limited to the cumulative change in
fair value of the hedged item, determined on a
present value basis, from inception of the hedge.
Any ineffective portion of changes in the fair
value of the derivative is recognised immediately
in statement of profit and loss.

If a hedge no longer meets the criteria for
hedge accounting or the hedging instrument is
sold, expires, is terminated or is exercised, then
hedge accounting is discontinued prospectively.
When hedge accounting for cash flow hedges
is discontinued, the amount that has been
accumulated in other equity remains there
until, for a hedge of a transaction resulting in
recognition of a non-financial item, it is included
in the non-financial item’s cost on its initial
recognition or, for other cash flow hedges, it is
reclassified to profit or loss in the same period
or periods as the hedged expected future cash
flows affect profit or loss.

If the hedged future cash flows are no longer
expected to occur, then the amounts that
have been accumulated in other equity
are immediately classified to statement of
profit and loss.

Investments in subsidiaries:

Investments in subsidiaries are carried at cost
less accumulated impairment losses, if any.
Where an indication of impairment exists,

the carrying amount of the investment is
assessed and written down immediately to its
recoverable amount.

q. Earnings Per Shares

Basic earnings per share are calculated
by dividing the Profit or Loss for the period
attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the period.

For the purpose of calculating diluted
earnings per share, the Profit or Loss for the
period attributable to equity shareholders

and the weighted average number of shares
outstanding during the period are adjusted for
the effect of all dilutive potential equity shares.

C. Recent Acccounting Pronouncements

Ministry of Corporate Affairs (“MCA”) notifies
new standards or amendments to the
existing standards under Companies (Indian
Accounting Standards) Rules as issued from
time to time. For the year ended March 31,
2025, MCA has not notified any new standards
or amendments to the existing standards
applicable to the Company.

12.2 Rights, preferences and restrictions attached to equity shares :

The Company has only one class of equity shares having par value of ' 10 each and the holder of the equity share
is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be
entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.

12.3 Dividend

The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors
is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended
March 31, 2025, the amount of ' 1 per share on the face value of ' 10 (Previous year - Nil) is proposed to the equity
shareholders of the company.

12.4 Rights Issue of Equity Shares :

The Company had issued 892,291 equity shares of face value Rs. 10 each on a rights basis ('Rights Equity Shares').
In accordance with the terms of issue, Rs. 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 Rs. 333 per
Rights Equity Share (including a premium of Rs. 327 per share) in January 2024. As of March 31, 2024, an aggregate
amount of Rs. 60.85 lakhs was 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 Rs. 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.

14.1 a). Rupee term loan from Bank aggregating to Rs. 2,537.07 lakhs is secured by first charge on all movable and
immovable assets of the Company, including current assets, ranking pari passu inter-se and Vehicle loan
from banks agreegating to Rs.100.22 lakhs are secured by way of hypothecation of respective vehicles.

The details of Term Loans from Banks and Vehicle Loan from Banks availed by the Company is as below:

(i) Rupee Term Loan Amounting Rs.299.21 Lakhs (March 31, 2024: Rs.899.93 Lakhs) is repayable in 2 quarterly
instalments, the next instalment is due on 30th June, 2025.

(ii) Rupee Term Loan Amounting Rs.952.30 Lakhs (March 31, 2024: Rs.3,238.10 Lakhs) is repayable in 10
monthly instalments, the next instalment is due on 14th April, 2025.

(iii) Rupee Term Loan Amounting Rs.1,285.56.00 Lakhs (March 31, 2024: Rs.2,142.86 Lakhs) is repayable in 18
monthly instalments, the next instalment is due on 17th April, 2025.

(iv) Rupee Vehicle Loan Amounting Rs 100.22 Lakhs (March 31, 2024: Rs.95.51 Lakhs) is repayable in monthly
instalments, the next instalment is due on 30 April, 2025.

(v) Term loan from banks carry an average interest rate of 9.00% to 9.95% (March 31, 2024: 9.15%to 9.95%) and
Vehicle loan from bank carry an average interest rate of 8.50% to 11.65% (March 31, 2024 : 8.50% to 11.65%)

The Company do not have any charges which is yet to be registered with ROC beyond the statutory
period. During the previous year, the Company had created a new pari passu charge of ' 200 Crores, this
supercedes the old charge of ' 100 Crores. The Company had registered a new pari passu charge within
the statutory period. However, the closure of the previous charge of ' 100 Crores is still under process.

b). (i) Pursuant to the Scheme of Arrangement becoming effective and subsequent excercise of Option by
Equity Shareholders of Demerged Entity Aarti Indutries Limited, 10,82,387 Nos of 0% Non-Convertible
Redeemable Preference Shares of ' 10/- each issued to the shareholders of Demerged Entity Aarti
Industries Limited who has opted for Redeemable Preference shares valued at fair value of Rs 167.70 per
share as per the Scheme.

b). (ii) Terms of preference shares:

The Company has only one class of Preference Shares being 0% Redeemable, Cumulative, Non¬
convertible and Non-participating Preference Shares. The shareholders have right to vote only on
resolutions which directly affect their interest.

The Preference Shares are Redeemable at the option of the Company such that shareholders will get 4%
annualised return on fair value of Rs 167.70 declared in the Scheme of Arrangment

Footnotes:

(a) Disaggregate revenue information

Refer Note 36 for disaggregated revenue information (segment reporting). The management determines
that the segment information reported is sufficient to meet the disclosure objective with respect to
disaggregation of revenue under Ind AS 115 “Revenue from contracts with customers”.

(b) In case of Domestic Sales, payment terms range from [15 days to 90 days] based on geography and
customers. In case of Export Sales these are either against documents at sight, documents against
acceptance or letters of credit - [15 days to 135 days]. There is no significant financing component in any
transaction with the customers.

(c) The Company does not provide performance warranty for products, therefore there is no liability towards
performance warranty.

(d) The Company does not have any remaining performance obligation as contracts entered for sale of goods
are for a shorter duration.

32.1 'The Company had issued 892,291 equity shares of face value Rs. 10 each on a rights basis ('Rights Equity Shares').
In accordance with the terms of issue, Rs. 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 Rs. 333 per
Rights Equity Share (including a premium of Rs. 327 per share) in January 2024. As of March 31, 2024, an aggregate
amount of Rs. 60.85 lakhs was 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 Rs. 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.

Nature of CSR activities undertaken by the Group

The CSR initiatives of the Group aim towards inclusive development of the communities largely around the vicinity of
its plants and registered office and at the same time ensure environmental protection through a range of structured
interventions in the areas of :

(i) Animal Welfare - Towards rescue, treatment and rehabilation of distressed wildlife.

(ii) Healthcare & Education Facilities - Distribution of medical equipments, Distribution of Benches, Chairs & Computers
at Schools, Constuction of Healthcare facilities for special needs and autism individuals.

36 Segment Information

The operating segments have been reported in a manner consistent with the internal reporting provided to the Board
of Directors, who are the Chief Operating Decision Makers. They are responsible for allocating resources and assessing
the performance of operating segments. Accordingly, the reportable segment is only one segment i.e. Home and
personal care ingredients.

Revenue from Type of Products and Services

There is only one operating segment of the company which is based on nature of product. Hence the revenue from
external customers shown under geographical information is representative of revenue based on product and services.

Information about major customers

Ind As 108 Segment Reporting Requires Disclosure of reliance on its Major customers if Revenue from transactions with
single external customer amounts to 10 per cent or more of company’s total Revenue. Company’s total Sales Revenue
of Rs. 64,851.32 Lakhs (P.Y. Rs. 58,561.54 Lakhs) include sales of Rs. 46,041.78 Lakhs (P.Y. Rs. 37,493.61 Lakhs) to two large
customers with whom the company is having long standing Relationship.

39 Capital Management

The Company’s objectives for managing capital is to safeguard continuity and healthy capital ratios in order to
support its business and provide adequate return to shareholders through continuing growth. The Company’s overall
strategy remains unchanged from previous year.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans
which include capital and other strategic investments.

The funding requirements are met through a mixture of equity, internal fund generation, and other non - current/
current borrowings. The Company’s policy is to use current and non - current borrowings to meet anticipated funding
requirements. The Company monitors capital on the basis of the net debt to equity ratio.

The Management believes that it will be able to meet all its current liabilities and interest obligations on timely manner.

The financial instruments are categorised into three levels based on the inputs used to arrive at fair value
measurements as described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Input other than the quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly; and

Level 3: Inputs based on unobservable market data.

B. Financial Risk Management

The Company’s principal financial liabilities comprise borrowings, trade paybles and other unsecured Lendings.
The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal
financial assets include Customer Receivables, Investments and cash and cash equivalents that it derives directly
from its operations.

The Company is exposed to credit risk, market risk and liquidity risk. The Company’s senior management oversees
the management of these risks.

b. Credit Risk

The company is exposed to credit risk from its operating activities (primarily for trade receivables).

Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay
the amounts due causing financial loss to the company. Credit risk arises from company’s activities in
investments and outstanding receivables from customers.

c. Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or
at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities
such as trade payables and other financial liabilities.

The Company’s corporate treasury department is responsible for liquidity and funding as well as settlement.
In addition, processes and policies related to such risks are overseen by senior management. Management
monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

41 Additional regulatory information required by schedule III to the Companies Act, 2013

(a) The Company does not have any benami property held in its name. No proceedings have been initiated on or are
pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988
(45 of 1988) and Rules made thereunder.

(b) The Company has complied with the requirement with respect to number of layers as prescribed under section
2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(c) Utilisation of borrowed funds and share premium:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall:

- Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Company (Ultimate Beneficiaries) or

- Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party (Ultimate Beneficiaries) or

- provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(d) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax
Act, 1961 (such as search or survey), that has not been recorded in the books of account.

(e) The Company has not traded or invested in crypto currency or virtual currency during the year.

42 Disclosure for Struck off companies

The company does not have any transations with companies struck off under section 248 of Companies Act, 2013 or
section 560 of Companies Act, 1956.

Notes:Explanation for Change in ratio by more than 25%

(i) Reduction in Return on Equity, Net Profit and Return on Capital Employed ratio largely on account on higher input cost

As per our report of even date For and on behalf of the Board
For Gokhale & Sathe

Chartered Accountants

Firm Registration Number: 103264W

Partner

Uday Girjapure Chandrakant Gogri Nikhil Desai Priyanka Chaurasia Nitesh Medh

M.No. 161776 Director CEO & Managing Company Chief Financial

DIN : 0005048 Director Secretary Officer

DIN : 01660649 ICSI M.No.A44258 ICAI M.No : 155868

Place: Mumbai
Date: 12th May, 2025