Aaradhya Disposal Industries Ltd Directors Report

17 NOMINATION AND REMUNERATION POLICY

In terms of Section 178(3) of the Act, the Board of Directors has, on the recommendation of the Nomination and Remuneration Committee, adopted a Nomination and Remuneration Policy. The salient features of the Policy, disclosed pursuant to Section 134(3)(e) of the Act, are as follows:

(a) it lays down the criteria for determining the qualifications, positive attributes and independence of a Director, having regard to the qualifications, expertise, experience, integrity and, in the case of an Independent Director, the criteria of independence prescribed under Section 149(6) of the Act;

(b) it sets out the criteria and process for the identification, appointment, re-appointment and removal of Directors, Key Managerial Personnel and Senior Management Personnel, and for the evaluation of their performance;

(c) it provides that the remuneration of Directors, Key Managerial Personnel and other employees shall be reasonable and sufficient to attract, retain and motivate persons of the requisite quality, shall bear a balanced relationship between fixed and, where applicable, performance-linked pay, and shall be within the limits laid down under Sections 197 and 198 of the Act read with Schedule V thereto; and

(d) it provides that Independent Directors shall not be entitled to any stock option and may be paid sitting fees and reimbursement of expenses for participation in the meetings of the Board and its Committees, and, if approved, commission within the limits prescribed under the Act.

18 ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS

Pursuant to Section 134(3)(p) of the Act read with Schedule IV thereto, the Board of Directors has carried out an annual evaluation of its own performance, of the performance of its Committees and of the individual Directors.

The evaluation was carried out on the basis of structured questionnaires and evaluation sheets circulated to the Directors, which were completed and returned by them. The performance of the Board as a whole was evaluated having regard to its structure and composition, the frequency and conduct of its meetings, the adequacy, quality and timeliness of the information placed before it, the effectiveness of its deliberations and the discharge of its key responsibilities. The performance of the Committees was

evaluated having regard to their composition, the effectiveness of their terms of reference and the contribution of the Committees to the decisions of the Board. The performance of individual Directors was evaluated having regard to their attendance and participation at meetings, the independence of judgement exercised, their understanding of the business of the Company and the professional experience and expertise brought by them to the deliberations of the Board.

The Nomination and Remuneration Committee reviewed the performance of the individual Directors, and the Independent Directors, at their separate meeting, reviewed the performance of the Non-Independent Directors, of the Chairman and of the Board as a whole. The Directors expressed their satisfaction with the evaluation process and the outcome thereof.

19 DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, your Directors, to the best of their knowledge and ability, state and confirm that:

(i) in the preparation of the annual accounts for the financial year ended 31 March 2026, the applicable accounting standards read with the requirements set out under Schedule III to the Act have been followed, and there are no material departures therefrom;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2026 and of the profit of the Company for the year ended on that date;

(iii) the Directors had 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;

(iv) the Directors had prepared the annual accounts on a going concern basis;

(v) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20 AUDITORS AND AUDITORS REPORTS

20.1 Statutory Auditors

M/s S R A M & Co., Chartered Accountants (Firm Registration No. 008244C) were appointed as the Statutory Auditors of the Company at the 12th Annual General Meeting held on 30 September 2025 for a term of five consecutive years, to hold office from the conclusion of that Annual General Meeting until the conclusion of the 17th Annual General Meeting of the Company. They have confirmed their eligibility and independence under Sections 139 and 141 of the Act.

The Financial Statements of the Company for the financial year ended 31 March 2026 have been audited by the said Statutory Auditors, whose report carries an unmodified opinion.

20.2 Reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014

The Statutory Auditors have remarked that the audit trail (edit log) feature, though enabled at the application level of the accounting software used by the Company, was not enabled at the database level.

Explanation of the Board under Section 134(3)(f) of the Act: The accounting software used by the Company records an audit trail of each transaction at the application level and creates an edit log of every change made in the books of account, and access to the software is controlled by user-wise rights. The Company has taken up the matter with its software vendor for enabling the audit trail at the database level and the necessary configuration is being implemented.

20.3 Secretarial Auditor and Secretarial Audit Report

Pursuant to Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company, being a listed company, is required to annex a Secretarial Audit Report to this Report. The Board of Directors appointed M/s Agrawal & Maheshwari, Practising Company Secretaries, as the Secretarial Auditors of the Company for the financial year 202526.

The Secretarial Audit Report in Form MR-3 for the financial year ended 31 March 2026 is annexed to this Report as Annexure D.

The Secretarial Auditor has made the following remark in their Report:

"The Company failed to submit the Shareholding Pattern for the half year ended September 30, 2025, within the timeline prescribed under Regulation 31 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015."

Explanation of the Board:

The Company had filed the Shareholding Pattern for the period ended 30 September 2025, with a delay of one day beyond the prescribed timeline due to an inadvertent delay in completing the filing process. The delay was subsequently identified and the requisite filing was made promptly by the Company. In connection with the delayed filing, the National Stock Exchange of India Limited (NSE) levied a penalty of Rs. 2,000 plus applicable GST @ 18%, aggregating to Rs. 2,360, which has been duly paid by the Company. The Company has since strengthened its internal compliance tracking mechanism to ensure timely submission of all statutory filings going forward.

20.4 Internal Auditors

M/s Nidhi Manish Rathi & Co., Chartered Accountants, were appointed by the Board of Directors as the Internal Auditors of the Company under Section 138 of the Act read with Rule 13 of the Companies (Accounts) Rules, 2014. The scope, functioning, periodicity and methodology for conducting the internal audit were determined by the Board in consultation with the Audit Committee, and the internal audit reports are placed before and reviewed by the Audit Committee.

20.5 Cost Records and Cost Audit

The products manufactured by the Company are not covered by the Tables set out in Rule 3 of the Companies (Cost Records and Audit) Rules, 2014. Accordingly, the maintenance of cost records as specified by the Central Government under Section 148(1) of the Act is not applicable to the Company, and the Company is not required to make and maintain such accounts and records.

The requirement of cost audit under Section 148(2) of the Act read with Rule 4 of the said Rules being likewise not applicable, no cost auditor was required to be appointed and no cost audit was required to be conducted in respect of the financial year ended 31 March 2026.

20.6 Reporting of frauds under Section 143(12) of the Act

During the financial year under review, neither the Statutory Auditors nor the Secretarial Auditors nor the Internal Auditors have reported to the Audit Committee or to the Board, under Section 143(12) of the Act, any instance of fraud committed against the Company by its officers or employees, the details of which would be required to be disclosed in this Report under Section 134(3)(ca) of the Act. No report was required to be made by the auditors to the Central Government.

21 RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Act, the Company has in place a Risk Management framework, adopted by the Board of Directors, for the identification, assessment, monitoring and mitigation of the various risks affecting the key business objectives of the Company. The principal risks so identified include raw material price and availability risk, foreign exchange risk on export receivables and foreign currency borrowings, customer concentration and credit risk, interest rate risk, regulatory and environmental compliance risk, and risks relating to plant operations and safety.

In the opinion of the Board of Directors, there are no elements of risk which, in the present circumstances, may threaten the existence of the Company.

The equity shares of the Company being listed on the SME Platform of the National Stock Exchange of India Limited, in terms of Regulation 15(2) of the Listing Regulations the provisions of Regulation 21 relating to the constitution of a Risk Management Committee are not applicable to the Company. The Board of Directors nevertheless reviews, on a periodic basis, the risks to which the Company is exposed and the steps taken for the mitigation thereof.

22 INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statements, commensurate with the size, scale and nature of its operations. These controls include documented policies and procedures for the authorisation and recording of transactions, the safeguarding of assets, the timely preparation of reliable financial information and the prevention and detection of fraud and error.

The Statutory Auditors have, in their report under Section 143(3)(i) of the Act contained in Annexure B to the Independent Auditors Report for the financial year ended 31 March 2026, expressed an unmodified opinion on the adequacy of the internal financial controls with reference to the financial statements and on the operating effectiveness of such controls. The Internal Auditors have reported that the internal control procedures of the Company are generally satisfactory and commensurate with the size and nature of its business. The observation of the Statutory Auditors under clause 3(ii) of the Companies (Auditors Report) Order, 2020 relating to the maintenance of inventory records, and the steps taken by the Company in that behalf, are set out at paragraph 20.2 of this Report.

23 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts and arrangements entered into by the Company with related parties during the financial year under review were entered into in the ordinary course of business and on an arms length basis. There were no contracts or arrangements entered into by the Company with related parties which were not at arms length basis, and no contract or arrangement was entered into with any related party in which any Director is interested otherwise than as disclosed.

All related party transactions were placed before and approved by the Audit Committee in terms of Section 177(4)(iv) of the Act.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the form prescribed under Rule 8(2) of the Companies (Accounts) Rules, 2014, are set out in Form AOC- 2 annexed to this Report as Annexure A.

24 CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility (CSR) Committee. Relevant details of the Committee are provided under Section 13 of this Report.

The Company has adopted a CSR Policy in line with the applicable provisions of the Act and the Rules, covering objectives, focus areas, implementation, monitoring, budgeting and reporting. The Policy is available on the Companys website at .

As per the provisions of Section 135 of the Act and the Rules made thereunder, the Company was required to spend Rs. 15,51,722/- for the financial year 2025-26. The Company spent an amount of Rs. 16,00,000/- towards CSR activities during the financial year 2025-26, resulting in an excess of Rs. 48,278/- which is available for set off in succeeding financial years in accordance with Rule 7(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The Annual Report on CSR activities, containing the particulars prescribed under Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed to this Boards Report as Annexure B.

25 PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the financial year under review, the Company has not given any loan, provided any guarantee or security, or made any investment falling within the purview of Section 186 of the Act. There were no loans or advances in the nature of loans outstanding as at 31 March 2026 from any promoter, director, key managerial personnel or related party, and the Company held no current or non-current investments as at that date.

26 SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any subsidiary, joint venture or associate company, and no company has become or ceased to be a subsidiary, joint venture or associate company of the Company during the financial year under review. Accordingly, the statement containing the salient features of the financial statements of subsidiaries, associates and joint ventures in Form AOC-1 under Section 129(3) of the Act is not applicable to the Company.

27 PARTICULARS OF EMPLOYEES AND MANAGERIAL REMUNERATION

The disclosures required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in Annexure C to this Report.

During the financial year under review, none of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under Rule 5(2) of the said Rules. Accordingly, the statement of particulars of employees under the said Rule read with Rule 5(3) is not applicable to the Company.

The remuneration paid to the Executive Directors during the financial year aggregated Rs. 102.00 lakhs and the sitting fees paid to the Independent Directors aggregated Rs. 1.75 lakhs, in each case within the limits prescribed under Section 197 read with Schedule V to the Act. No Director received any commission or any variable component of remuneration during the year, and no Director received any remuneration or commission from any other company.

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

The particulars required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are set out in Annexure E to this Report.

29 CORPORATE GOVERNANCE

The disclosure requirements prescribed under Para C of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company pursuant to Regulation 15(2) of the said Regulations, the equity shares of the Company being listed on the SME Platform of the National Stock Exchange of India Limited. Accordingly, a separate Report on Corporate Governance does not form part of this Report. The Company has nevertheless observed the substance of the said requirements to the extent practicable, as set out in this Report.

30 LISTING STATUS

The equity shares of the Company are listed on the SME Platform of the National Stock Exchange of India Limited ("NSE EMERGE") with effect from 11 August 2025.

31 DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to providing a safe and respectful working environment to all its employees and has in place a policy against sexual harassment at the workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. An Internal Complaints Committee has been constituted under Section 4 of the said Act. All employees, whether permanent, contractual, temporary or trainee, are covered by the policy.

The annual return has been filed with the District Officer in terms of Section 21 of the said Act.

32 COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

During the financial year under review, the Company has duly complied with all the applicable provisions of the Maternity Benefit Act, 1961 and the rules made thereunder. All eligible women employees have been extended the prescribed benefits in accordance with law, and the Company continues to uphold its commitment to the health and well-being of its women employees during and after maternity.

33 COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards, namely the Secretarial Standard on Meetings of the Board of Directors (SS-1) and the Secretarial Standard on General Meetings (SS-2), issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

34 ANNUAL RETURN

35 SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS

No significant or material order has been passed during the financial year under review by any regulator, court or tribunal which could impact the going concern status of the Company or its operations in future.

36 APPLICATION OR PROCEEDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

No application was made by or against the Company, and no proceeding was pending against the Company, under the Insolvency and Bankruptcy Code, 2016 during the financial year under review or as at the end of the financial year.

37 DIFFERENCE IN VALUATION ON ONETIME SETTLEMENT WITH BANKS OR FINANCIAL INSTITUTIONS

The Company has not entered into any one-time settlement with any bank or financial institution during the financial year under review. Accordingly, the disclosure of the difference between the amount of valuation done at the time of one-time settlement and the valuation done while taking a loan, required under Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014, does not arise.

38 DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING ON THE COMPANY

Pursuant to Para G of Schedule V to the Listing Regulations, there is no agreement of the nature specified in clause 5A of Para A of Part A of Schedule III to the Listing Regulations which impacts the management or control of the Company, or which imposes any restriction or creates any liability upon the Company, and no such agreement was subsisting at any time during the financial year under review or as at the date of this Report.

39 MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, prepared in accordance with Regulation 34(2)(e) read with Paragraph B of Schedule V to the Listing Regulations, is annexed to this Report as Annexure F.

40 OTHER DISCLOSURES

Your Directors further state that no disclosure or reporting is required in respect of the following matters, there having been no transaction or event concerning the same during the financial year under review:

(i) the issue of equity shares with differential rights as to dividend, voting or otherwise, of sweat equity shares, or of shares under any employee stock option scheme or employee stock purchase scheme;

(ii) any scheme of provision of money for the purchase of the Companys own shares by employees or by trustees for the benefit of employees;

(iii) any revision of the financial statements or of the Boards Report under Section 131 of the Act;

(iv) any failure to implement a corporate action; and

(v) any credit rating of the securities of the Company, no such rating having been obtained or being required to be obtained.

The entire issued, subscribed and paid-up equity share capital of the Company was held in dematerialised form as at 31 March 2026 through the National Securities Depository Limited and the Central Depository Services (India) Limited.

Any other disclosure required to be made in the Boards Report under the Act and the Rules made thereunder, and not separately dealt with in this Report, is either Nil or not applicable to the Company for the financial year under review.

41 ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the continued co-operation and support extended to the Company during the year under review by government authorities, customers, vendors, regulators, banks, financial institutions, stock exchanges, depositories, the Registrar and Share Transfer Agent, auditors, legal advisors, consultants, business associates, members and other stakeholders, and look forward to their continued support in the years ahead.

The Directors also convey their appreciation to the employees at all levels for their contribution, dedicated services and confidence in the management.