Your directors have the pleasure of presenting the thirty-third annual report of your Company together
with the audited financial statements for the financial year ended 31^st March 2025.

1. a. FINANCIAL SUMMARY OR HIGHLIGHTS OR THE PERFORMANCE OF THE
COMPANY (? in Lacs)

b. DIVIDEND

Your directors do not recommend payment of dividend on equity shares.

c. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND
PROTECTION FUND

The provisions of Section 125(2) of The Companies Act, 2013 do not apply as there was no
dividend declared and paid in the last seven years.

d. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE
FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS
OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE
AND THE DATE OF THE REPORT

No such material changes occurred, which affected the financial position of the company.

e. SHARE CAPITAL

The paid-up capital of the company as on 31st March 2025 was INR 8 Crore. During the year
under review the Company has not altered its share capital, consequently there has been no
change in the capital structure since previous year.

f. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY
ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As per the rule of the Companies Act, 2013 CSR is applicable on our company, and the
Company has made an annual CSR contribution of Rs. 22 Lakhs to Rukmani Devi Sharadha
Trust for Rural Development Projects and Hari Om Trust for medical camp in Uttarkhand.

2. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company
for the year under review as required under Regulation 34 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is given in the part on
Corporate Governance elsewhere in the Annual Report marked as “Annexure A”.

3. FINANCE

3.1. PUBLIC DEPOSIT

The Company has not accepted any deposit falling within the ambit of Section 73 of the
Companies Act, 2013 read with The Companies (Acceptance of Deposits) Rules, 2014.

3.2. PARTICULARS OF LOAN AND INVESTMENT AND GUARANTEE SECURITY

The company has not given any loan under this section except making investments in, giving
loans and guarantees to and providing securities in connection with loans to its wholly
owned subsidiaries from time to time, in compliance with the applicable provisions of the
Act.

4. INTERNAL FINANCIAL CONTROL

The Company has formulated and implemented comprehensive guidelines to establish and
maintain robust internal financial controls. These controls are embedded across various
levels of operations and encompass both manual processes and automated systems,
including Enterprise Resource Planning (ERP) applications. The ERP systems are
configured to ensure that all financial transactions are appropriately authorized, accurately
recorded, and systematically reported. These controls are tailored to suit the specific nature
of operations conducted at different business locations and across various functional
domains, thereby ensuring relevance and effectiveness in internal governance.

The framework is designed to provide reasonable assurance regarding the reliability of
financial reporting, safeguarding of assets, prevention and detection of frauds and errors,
accuracy and completeness of accounting records, and timely preparation of financial
statements.

To ensure the adequacy and operational effectiveness of these internal financial controls,
periodic evaluations are conducted. The Internal Auditors carry out detailed assessments as
part of their audit plan, and their findings are regularly reviewed by the management and
the Audit Committee. In addition, the Statutory Auditors independently evaluate the internal
financial controls over financial reporting as part of their audit procedures.

5. SUBSIDIARY COMPANY, JOINT VENTURE & ASSOCIATE COMPANY

As on 31^st March 2025 your Company has 7 Wholly owned Subsidiary Companies: -

a) Yocnex Chemicals Private Limited

b) Suksess Chemicals Private Limited

c) Nocnex Chemicals Private Limited

d) Ocilim Advisory Services Private Limited

e) Wide Range Merchants Private Limited

f) Allied Maritime & Infra Engineering Private Limited

g) ARCL Petrochemicals Limited

In Compliance with IND AS-110, your Company has prepared its consolidated financial
statements which forms part of its Annual Report. Pursuant to the provisions of Section
129(3) of Companies Act, 2013, the salient features of the subsidiary Company in the
prescribed form AOC-1 is a part of the consolidated financial statements.

Your Company does not have any associates, holding or joint ventures as on 31st March,
2025.

6. YEAR IN RETROSPECT AND FUTURE OUTLOOK:

The specialty chemicals and broader chemicals industry serve as the backbone of multiple
sectors, including agriculture, construction, automotive, electronics, pharmaceuticals, textiles,
and consumer goods. In FY 2023-24, the global industry faced a complex environment shaped
by macroeconomic uncertainty, geopolitical tensions, shifting supply chains, and growing
regulatory and sustainability demands. Nevertheless, resilience in end-use markets, innovation-
led growth, and increased focus on specialty products continued to offer new avenues for
expansion.

The global specialty chemicals market was valued at approximately USD 820 billion in 2023,
with an annual growth rate of 4.8%. The broader chemicals market exceeded USD 5 trillion,
driven by steady demand from infrastructure, agriculture, personal care, and electronics sectors.
Despite supply chain disruptions, inflationary pressures, and energy cost volatility—especially
in Europe—key markets such as Asia-Pacific and North America remained stable.

Regional Overview

Asia-Pacific retained its dominance, accounting for over 45% of global specialty chemical
consumption. China and India emerged as pivotal players due to increased domestic demand,
export opportunities, and government support for chemical manufacturing clusters.

Europe experienced slow growth owing to energy crises and regulatory constraints but remained
a hub for green chemistry and innovation.

North America benefited from onshoring trends, energy availability, and increased production
of high-value specialty chemicals, particularly in the U.S.

Global chemical players continued shifting from commoditized products to higher-margin,
innovation-led specialty chemicals. This shift not only improved financial performance but also
reduced environmental risks and strengthened customer relationships through customization.
Outlook for FY 2024-25

a. Growth Projections

The specialty chemicals industry is projected to grow at a CAGR of 5.5%, reaching USD 870¬
900 billion by FY 2025. The broader chemicals market is expected to cross USD 5.5 trillion,
supported by post-COVID recovery in infrastructure, automotive, and industrial manufacturing.

b. Emerging Markets and India’s Role

India is expected to be a standout performer due to:

India's specialty chemicals industry is expected to grow at over 11-12% CAGR, potentially
reaching USD 65-70 billion by 2025.

7. LISTING OF THE SECURITIES OF THE COMPANY

Equity shares of the Company got listed on 29^th September 2023 on BSE and the listing Fees
for the Financial year 2025 - 2026 have been paid on 30.04.2025 and 72.44% of the Equity
Share Capital of the Company is in Dematerialization form.

8. DIRECTORS RESPONSBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with
respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) In the preparation of the Annual Accounts the applicable accounting standards have been
followed along with proper explanation relating to material departures.

(b) The directors have selected such accounting policies and applied them consistently and
made judgment 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 the profit and
loss of the company for that period.

(c) The directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provision of this act for safeguarding the assets of
the company and for preventing and detecting fraud and other irregularities.

(d) The directors have prepared the annual accounts on a going concern basis.

(e) The directors, have laid down internal financial control to be followed by the company
and that such internal financial control are adequate and were operating effectively, and

(f) The directors have devised proper systems to ensure compliance with the provision of all
applicable laws and that such system were adequate and operating effectively.

9. RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the Company with
Promoters, Directors, Key Managerial Personnel or other designated persons which may
have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for
approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for
the transactions which are foreseen and are of repetitive nature. The transactions entered into
pursuant to the omnibus approval so granted are of audited and a statement giving details of
all related party transactions is placed before the Audit Committee and the Board of Directors
for their approval on a yearly basis. The policy on Related Party Transactions as approved
by the Board is uploaded on the Company’s website www .arclorganics.com.

10. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instance of fraud and mismanagement, if
any. The details of the Vigil Mechanism is explained in the Corporate Governance Report
and also posted on the website of the Company www.arclorganics.com.

11. CORPORATE GOVERNANCE

ARCL Organics Ltd is committed to upholding the highest standards of corporate
governance. The principles of good governance are deeply embedded in the Company’s
culture and extend to all stakeholders, influencing every business decision. The Company
places paramount importance on accuracy in financial reporting, integrity, transparency,
legal compliance in both letter and spirit, and the empowerment of individuals at all levels.
The Management Discussion and Analysis Report is presented under the section titled "The
Year in Review" in the Annual Report. Additionally, the Corporate Governance Report,
along with a Certificate from the Secretarial Auditors affirming compliance with the
prescribed corporate governance norms, is annexed and forms an integral part of the
Directors’ Report.

The Company makes a conscious and continuous effort to ensure that the core values
articulated in the Codes of Conduct for Directors, Senior Management Personnel, and
Employees are upheld across the organization. These values are not only documented but are
also practiced in spirit, fostering a culture of accountability, ethical conduct, and responsible
leadership at all levels.

12. ANNUAL RETURN

Pursuant to section 92(3) read with section 134(3)(a) of the Act, the Annual Return as on 31^st
March 2024 may be accessed on the Company's website at the www.arclorganics.com.

13. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right
of gender equality and guarantee against sexual harassment and abuse, more particularly
against sexual harassment at work place, your Company has a Policy on Prevention of Sexual
Harassment at the Workplace duly approved by the Board of Directors and posted on the
website of the Company www.arclorganics.com.

During the year, no complaint was reported under The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNING AND OUTGO

Particulars required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies
(Accounts) Rules, 2014, under the heads (a) conservation of energy; and (b) technology
absorption, are not applicable to the Company. During the year there was no foreign
exchange earnings (previous year nil). Foreign Exchange outgo during the year aggregated
to Nil. (previous year Nil).

15. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by
Regulation 17 (1) (a) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 with fifty per cent of the Directors being Non-Executive Director with at
least one-women independent director. Your Board comprises of (Six) directors out of which
3 (Three) are independent directors and it includes one-woman independent director.

Mr. Rajesh Mundhra is Executive Director, retires by rotation in accordance with the
requirements of Companies Act, 2013 and Articles of Association of the Company. He being
eligible offers himself for re-appointment.

Brief resume of Mr. Rajesh Mundhra, nature of his expertise in specific functional areas,
names of companies in which he holds directorships and/or memberships/chairmanships of
committees of Board, his shareholdings are furnished in section on “Corporate
Governance” elsewhere in the Annual Report.

Further, as declared by them, none of the Directors of the Company is disqualified from being
appointed as a Director, as specified in section 164(2) of the Companies Act, 2013 and rule
14(1) of the Companies (Appointment and Qualification of Directors) Rules 2014 or is
debarred or disqualified from being appointed or continuing as Director of companies by the
SEBI/Ministry of Corporate Affairs or any such statutory authority.

All Independent Directors have given declarations that they meet the criteria of independence
as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.

16. 1. ANNUAL PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Board has carried out an annual
performance evaluation of its own performance, the directors individually, Key Managerial
Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit

Committee, Nomination & Remuneration Committee and Stakeholders Relationship
Committee. The manner in which the evaluation has been carried out has been explained in
the Corporate Governance Report.

16.2. NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee
framed a policy for selection and appointment of Directors, Senior Management and their
remuneration the contents of which are placed on the website of the Company at
www.arclorganics.com.

16.3. MEETINGS

During the year four (04) Board Meetings and Four (04) Audit Committee Meetings were
convened and held, the details of which are given in the “Corporate Governance Report”.
The intervening gap between the Meetings was within the period prescribed under the
Companies Act, 2013.

17. AUDITORS

17.1. STATUTORY AUDITORS

The Member had appointed M/s L. B. Jha & Co, Chartered Accountants (Firm Registration
No 301088E) as the statutory auditor of the Company at the 31^st Annual General Meeting, to
hold office as such, for a term of 5 years till the conclusion of 36^th Annual General Meeting.
M/s L.B. Jha & Co. continues to be the auditor of the Company for the financial year 2024 -
2025.

The observations made in the Auditor’s Report are self-explanatory and therefore, do not call
for any further comments under Section 134(3)(f) of the Act.

17.2. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had
appointed M/s. KSN & Co, Company Secretary in Practice to undertake the Secretarial Audit
of the Company. The Secretarial Audit Report is annexed herewith as “Annexure B”.

AUDITORS’ QUALIFICATION

(i) STATUTORY AUDITORS’ QUALIFICATIONS

There are no qualifications. Qualifications contained in the Auditors’ Report if any have been
dealt with in the Notes to financial statements and are self-explanatory.

(ii) SECRETARIAL AUDITORS’ QUALIFICATIONS

There are no qualifications. Qualifications contained in the Secretarial Auditors’ Report if
any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

18. FRAUD REPORTING

During the year under review, the Auditors have not reported any matter under Section 143
(12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of
the Act.

19. COST AUDITORS

Pursuant to section 148 of the Act, the Board has appointed M/s. Amit Khetan & Co (Firm
Registration No. - 102559), to conduct the audit of cost records of the Company for the
Financial Year 2024 - 2025.

20. SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Board had appointed M/s KSN & Co., Practicing
Company Secretaries, to conduct Secretarial Audit of the Company for the Financial year
2024 - 2025.

The Secretarial Audit Report for the Financial year 2024 - 2025 is provided as an Annexure
to this Report. The Report does not contain any qualification, reservation or adverse remark.

21. SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year ended March 31, 2025, for all
applicable compliances as per the Securities and Exchange Board of India Regulations and
Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report issued
by M/s KSN & Co., Practicing Company Secretaries, has been submitted to the Stock
Exchanges on 29.05.2025 which is within 60 days from the end of the Financial Year.

22. INTERNAL AUDITOR

The Board of Directors of the Company has appointed M/s. MIB & Co. as Internal Auditors
to carry out extensive Internal Audit of the Company for the Financial Year ended March 31,
2025.

23. REPORTING OF FRAUD BY AUDITORS

During the year under the review the Statutory Auditor, Secretarial Auditor, Cost Auditor
and Internal Auditor has not reported any instances of fraud committed in the company by
its directors or officers or employees to the Audit Committee under section 143(12) of the
Companies Act, 2013.

24. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of
employees of the Company, is given in “Annexure C”.

25. TAXES AND DUTIES

Your Company has contributed Rs.35,84,83,617/-to the Central and State Exchequer by way
of Taxes and duties.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN

Information as required under section 134(3)(m) of the companies act 2013 read with Rule
8(3) of Companies (Accounts) rules, 2014):

Conservation of Energy

a. Energy Conservation Measures Taken:

• Improvisation and continuous monitoring of Power Factor and replacement of weak capacitors
by conducting periodical checking of capacitors.

• Installation of isolating valve in main airline for preventing air loss.

• The Company has relentlessly aimed at optimising the use of energy resources and taken
adequate measures to avoid wastage and use latest technology and equipments.

b. Impact of the above Measures:

• Opportunity to compete in International Markets

• Technology up-gradation

• Development of new designs in products

• Attaining accreditation of our products from Internationally recognized Organizations

c. Total Energy Consumption and Energy Consumption per Unit of Production:

• Power & Fuel Consumption

FO Consumption from April 2024 to March 2025 = 109.85KL
Total amount (Rs in Lacs) = 66.21
Monthly Average (Rs in Lacs) = 5.52
Rate (Rs/Litre) = 60.28

Technology Absorption:

Research and Development (R & D):

The current success, and our future success, is largely dependent on our ability to develop new
products and processes and to improve the features of existing products. The research activity
includes-

a) Low emission formaldehyde E0/E1 in plywood application.

b) Slow Release Nitrogen crude protein in cattle field application, M PRO.

c) Import Substitution cross linker HMMM.

Expenditure on R & D:

Government recognition of our R & D

It’s a matter of great pride that company got recognition by Government of India approving our
in-house laboratory as DSIR certified. There are many funds received from all over the world
with Government of India for R&D works. They gave these funds to DSIR recognized
laboratory only. This will give us an opportunity to get such funds and do real great R&D,
helping world and society with innovations. We are pretty sure under the leadership of our

talented R&D chief, ARCL will achieve lot of recognition & do real innovative
research benefiting the industry & society.

Foreign Exchange Earnings and Outgo:

a) Expenditure in Foreign Currency - Rs. 40,83,456/-

b) Earnings in Foreign Currency- Rs. 72,43,08,259/-

27. INDEBTEDNESS OF THE COMPANY INCLUDING INTEREST
OUTSTANDING / ACCRUED BUT NOT DUE FOR PAYMENT

28. MATERNITY BENEFIT

The Company continues to comply with the provisions of the Maternity Benefit Act, 1961.
Eligible female employees are provided maternity leave and benefits as per statutory norms.
Maternity leave of up to 26 weeks is granted for the first two children and 12 weeks for
subsequent childbirths, along with full pay during the leave period. The Company remains
committed to supporting the health and well-being of its employees and fostering a conducive
work environment for working mothers.

29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS

There is no significant material orders passed by the Regulators/Courts which would impact
the going concern status of the Company and its future operation.

30. ACKNOWLEDGEMENTS

Your directors express their sincere appreciation of the co-operation and assistance received
from the shareholders, bankers, regulatory bodies and other business constituents during the
year under review.

Regd. Office:

Rampur Budge Budge Trunk Road,

Kolkata 700 141
13^th Day of May 2025

For and on behalf of the Board of Directors

Suraj Ratan Mundhra
Chairman and Managing Director
(DIN No. 00681223)