Aether Industries Ltd Directors Report

Report of the Board

To,

The Members,

Aether Industries Limited

Your Directors have pleasure in presenting the Annual Report and the Financial Statements of the Company for the Financial Year ended on March 31,2026.

Particulars (INR in MM)	Standalone		Consolidated
	2026	2025	2026	2025
Income from business operations	9,401.69	7,903.18	1,601.41	8,405.48
Add : Other income	215.37	424.96	209.27	397.64
Total income	9,617.06	8,328.14	11,810.68	8,803.12
EBITDA	3,169.83	2,697.86	3,845.63	2,828.05
Less: Finance Cost	122.43	102.25	180.87	129.33
Less: Depreciation	607.81	427.97	664.15	450.14
Profit before Exceptional items and Tax	2,439.59	2,167.64	3,000.61	2,248.58
Less: Exceptional items	89.76	118.74	89.76	118.74
Profit before tax	2,349.84	2,048.90	2,910.85	2,129.84
Less: Tax	613.73	528.01	716.22	545.66
Profit after tax	11,736.10	1,520.89	2,194.63	11,584.18
Earnings per Equity Share: Basic (per Equity Share)	13.09	11.47	16.55	0.95
Diluted (per Equity Share)	13.08	11.47	16.53	0.95

Business operations, affairs and nature of the Company During the Fiscal Year under review, the Company pursued the existing stream of business operations without introducing any new business venture. Business activity of the Company remained unchanged throughout the Fiscal Year. The Reporting Financial Year turned out a progressive, efficient and overall a prosperous for the Company.

The revenue of the Company achieved to Rs. 9,401.69 MM, comparing to Rs. 7,903.18 MM of previous year, with y-o-y increase of 19%.

The PAT of the Company reported to Rs. 1,736.10 MM, comparing to Rs. 1,520.89 MM of previous year, with y- o-y increase of 14%. The above strong and notable performance was led by CEM and CRAMs business models, contributing more than 55% of the revenue. Also, a strong traction was developed with diversified customers. Remarkably, Manufacturing Site 3++ commenced production in late February, 2026. Significant R&D Centre expansion was completed in adjacent land.

Transfer to Reserves

Total Retained Earnings of Rs. 7,165.11 MM was transferred to Reserves.

Dividend

No Dividend was declared during reporting Financial Year.

Share Capital

The paid-up share capital of the Company as of March 31,2026, is reported to Rs. 1,32,67,98,240, comprising 13,26,79,824 Equity Shares of Rs. 10 each, in the dematerialised format.

During the reporting Financial Year, Company issued 89,583 Equity Shares to eligible employees of the Company under the Aether Industries Limited Employee Stock Options Scheme, 2021 (herein referred as AIL ESOS 2021) at multiple instances.

Subsidiaries, Joint ventures and Associate Companies

The Company has a following Wholly Owned Subsidiary Company;

Name: Aether Speciality Chemicals Limited CIN: U24290GJ2022PLC135180 Holding: 100%

The above Wholly Owned Subsidiary becomes a Material Subsidiary in-line with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) regulations, 2015.

Details of it are provided separately in the Form AOC-1, as Annexure-A.

Weblink of the Annual Return The web-link of Annual Return as in Form No. MGT-7 is https://aether.co.in/investor-relations/#financial- performance-and-presentation. for your kind perusal and information.

Deposits

The Company has not accepted any deposit from the general public within the meaning of Section 73 of the Companies Act, 2013 and Rules framed thereunder.

Business Responsibility and Sustainability Report As the Company falls under top 500 listed Companies of India basis the MCap, the Business Responsibility and Sustainability Report (BRSR) in terms of Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the Fiscal Year is attached herewith.

Material changes and commitments during after the end of the Fiscal Year

There have been no material changes and commitments, affecting the financial position of the Company, that have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

Details of revision of Financial Statement or Annual Report

No revision of the Financial Statements or Annual Report has been made during Financial Year ended March 31,2026 neither in any of the preceding three Fiscal Years.

Accounting treatment

Since the listing of the Company, the Company has adopted the “Ind AS” as the accounting methodology.

Particulars of the Loans, Guarantees or Investments by the Company

During the Reporting Financial Year, the Company had given an unsecured loan worth Rs. 201.87 MM to M/s. Aether Speciality Chemicals Limited, the Wholly Owned Subsidiary.

Contracts or Arrangements with Related Parties There were no such significant Contracts or Arrangements were executed or transacted with Related Parties of the Company during the reporting Financial Year.

Board of Directors and Key Managerial Personnel The Board of the Company is duly constituted, comprising an adequate number of Executive, Non- Executive, Women Directors and Independent Directors.

At present, the Board is comprised of a total 12 (twelve) Board members, including 3 (women) members. There Report of the Board are 4 (four) Executive Directors, 2 Non-Executive Directors and 6 Independent Directors.

The Key Managerial Personnel of the Company are comprised of Chief Technology Officer, Chief Financial Officer and Company Secretary, who also serve as Compliance Officer of the Company.

No changes were reported in the Board of Directors and the Key Managerial Personnel of the Company during the Reporting period.

The Policy on appointment of Directors and remuneration, including criteria for determining qualifications, positive attributes, independence of Directors and other matters, as described in Section 178 of the Companies Act, 2013, is accessible at: https://aether.co.in/wp-content/uploads/2024/09/Policy on appointment of Directors. KMPs and Employees.pdf

Declaration by Independent Directors The Board of Directors of the Company hereby confirm that all the Independent Directors have been duly appointed by the Company and they have given the declaration that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and as per the SEBI (LODR) Regulations, 2015.

Directors retirement by rotation According to the provisions of Section 152(6) of the Companies Act, 2013 and as per terms framed under the Articles of Association of the Company, Mr. Kamalvijay Ramchandra Tulsian and Ms. Ishita Surendra Manjrekar, Non-Executive Directors of the Company will be retiring by rotation at the forthcoming Annual General Meeting and being eligible, to offer themselves for reappointment. The Board recommends their re-appointment, for consideration and approval of the members.

Number of Board Meetings

During the reporting Financial Year, total 4 (four) Board Meetings were convened to discuss various business agenda.

The meetings were conducted in an effective and well- organised manner, with active participation of the Board Members throughout the year. The Board continued to provide strategic guidance and oversight in the conduct of the Companys affairs.

The Boards evaluation

The Board evaluated the effectiveness of its functioning, its Committees, and Individual Directors by seeking their feedback on various aspects of the Boards and Committees governance. In addition, several new initiatives were introduced to further strengthen the overall Board evaluation process.

The evaluation covered various aspects, including the Boards contribution to and oversight of corporate governance practices, participation in long-term strategic planning, and the discharge of Directors statutory, fiduciary, and governance responsibilities. The evaluation also considered the active participation in Board and Committee meetings.

As part of the evaluation process, the Chairman of the Board held one-on-one meetings with the Independent Directors, while the Chairman of the Nomination and Remuneration Committee met individually with the Executive and Non-Executive Directors to obtain their feedback on the effectiveness of the Board and Committee processes.

The Policy can be accessed at: https://aether.co.in/wp- content/uploads/2024/09/BoardEvaluationPolicy.pdf

Familiarization program for Independent Directors In the reporting Fiscal Year, 2 (two) familiarisation programs including a site visit, was hosted by the Company for its Independent Directors. Details of such a program is hosted on the website of the Company, accessible at: https://aether.co.in/wp-content/uploads/ 2025/08/FamiliarisationProqram of IndependentDirectors - FINAL.pdf

Credit rating of the Company

The Company has maintained its credit ratings during the Reporting Financial year. Rating of the Company was awarded to ICRA A+ for long-term ratings and ICRA A1 for short-term ratings, issued by M/s. ICRA Limited.

The rating was issued on credit exposure of Rs. 2,960.00 MM, considering the performance of the Company at various measures.

Transfer of amounts to Investor Education and Protection Fund

The Company does not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund.

Corporate Social Responsibility

During the reporting Financial Year, the Company with the utmost joy fulfilled its CSR obligation of Rs. 32.89 MM, as per the budget, adhering to the Section 135 read with Schedule VII of the Companies Act, 2013.

The Annual Report on the CSR is annexed as Annexure- B. The Company has aligned the activities under CSR basis the Policy of the CSR, accessible at: https:// aether.co.in/wp-content/uploads/2022/08/CSR- Policv.pdf

Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors of the Company confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with a proper explanation relating to material disclosures;

(b) The Directors had selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the Fiscal Year and of the profit and loss of the Company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis; and

(e) 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. internal Financial Controls The Internal Financial Control System (IFCS) of the Company has been set out upon considering the following measures:

(a) That IFCS are commensurate with the size and nature of its operations.

(b) All legal and statutory compliances are ensured on a monthly basis. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system.

(c) Approval of all transactions is ensured through a preapproved Delegation of Authority Schedule which is reviewed periodically by the Management.

(d) The Company follows a robust internal audit process.

Transaction audits are conducted regularly to ensure the accuracy of financial reporting, and the safeguard and protection of all the assets. Verification of Fixed Assets is done on an annual basis. The audit reports for the above audits are compiled and submitted to the Board of Directors for review and necessary action.

The Company is having the best-in-class IFCS for the optimum output.

Related Party Transactions

All the Related Party Transactions that were entered into during the Fiscal Year were in the ordinary course of business and at arms length price.

There are no materially significant Related Party Transactions made by the Company with Promoters (incl. Promoter Group individuals), Directors, Key Managerial Personnel and Group Companies.

Particulars of such transactions with related parties are duly noted on accounts forming part of the Financial Statements.

Risk Management

The Company has adopted a formal, enterprise-wide approach to risk management, under which key risks are identified, assessed, monitored, and managed within an integrated framework. As part of the formal implementation of this framework, all business divisions and corporate functions have adopted the Risk Management Policy and Guidelines and are expected to incorporate risk considerations into their decision-making processes.

Key business risks, together with the corresponding mitigation measures, are integrated into the annual and strategic business planning process and are reviewed periodically by the management. Over time, the risk management framework has been embedded across the Companys multi-business and multi-site operations, ensuring that risk management forms an integral part of its business systems and processes. This enables the Company to respond to emerging risks in a timely, dynamic, and effective manner, in line with the evolving business environment.

The Company has also formed a Risk Management Committee, details of which are mentioned in the Corporate Governance Report.

Report of the Board

Energy conservation, Technology Absorption and Foreign Exchange Earnings & Outgo Information on conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are mentioned here under:

(a) Conservation of Energy

The Company is taking all the efforts to save electricity and other resources to conserve energy and utilise the same optimally.

The Company remains committed to the conservation of energy through the efficient utilisation of electricity and other natural resources. Continuous efforts are made to optimise energy consumption by adopting energy-efficient practices, improving operational efficiencies, and promoting the prudent use of resources across all operations.

The steps taken by the company for utilising alternate sources of energy The Company has entered into a Purchase Power Agreement to avail the benefit in the form of rebate from the electricity consumed for the manufacturing facility. The service provider will produce the electricity through solar power plant installed and that will lead to redemption in the electricity bills.

The Company is using the 15 MW Solar Power Project (Auto-Tracker Modules) under Captive Power Producer (CPP) segment to meet energy needs.

The Company has installed Variable FrequencyDevices (VFDs) along with Distributed Control System (DCS), dedicated automated dedicated energy meters in various high-power consuming equipment to optimize the usage.

(b) Foreign Exchange Earnings and Outgo

The Foreign Exchange earned and the Foreign Exchange outgo during the Fiscal Year 2026:

Earning: Rs. 2,397.34 MM

Outgo: Rs. 574.44 MM

Vigil Mechanism

The Company has established a Vigil Mechanism/Whistle Blower Policy to provide a robust framework for reporting instances of unethical behaviour, actual or suspected fraud, misconduct, or violations of the Companys Code of Conduct and other applicable policies. The Policy enables Directors and Employees to report genuine concerns in a confidential and transparent manner, with adequate safeguards against victimisation.

The effectiveness of the Vigil Mechanism is reviewed by the Board of Directors on a quarterly basis. The Board considers the functioning of the mechanism and, wherever necessary, provides guidance and recommendations for its continuous improvement.

During the reported Financial Year, no instances of unethical behaviour, actual or suspected fraud, misconduct, or violations under the Vigil Mechanism/Whistle Blower Policy were reported.

Vigil Mechanism cum Whistle Blower Policy is accessible on the website of the Company, at: https:// aether.co.in/wp-content/uploads/2024/09/ WhistleBlowerPolicyViailMechanism.pdf

Regulatory action

There was no regulatory action from any of the Regulators or Authorities on the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules framed thereunder,

M/s. Dhirren R. Dave & Company, Company Secretary in practice, was appointed as the Secretarial Auditor of the Company for the Fiscal Year 2026.

They undertook the Secretarial Audit activity with utmost depth and integrity. All the conducts of the Company were found in line with the stipulated norms, and the compliance system was found in line with the laws, and no instance of any material misconduct was found in the audit.

The Report does not contain any qualifications, reservations, adverse remarks or disclaimers.

The Secretarial Audit Report is annexed herewith as Annexure-C.

Cost Audit

The Company has maintained the cost records specified by the Central Government under Section 148(1) of the Companies Act, 2013, and the applicable rules made thereunder. Accordingly, such cost accounts and records have been duly made and maintained.

For the Financial Year under review, the cost audit of the Companys cost records was conducted by M/s. PAAA & Associates, Cost Accountants.

The Board, on the recommendation of the Audit Committee for the 2026, have approved their remuneration of Rs. 0.11 MM.

The Cost Auditor has confirmed that their appointment is within the purview of Section 143 of the Companies Act, 2013 and they confirm that they are free from any disqualification.

Internal Audit

The Board appointed Ms. Riddhi Chitaliya, Chartered Accountant, as the Internal Auditor of the Company as per Section 138 of the Companies Act, 2013, to conduct the Internal Audit of the Company, for the reporting Financial Year.

Employee Stock Option Scheme Pursuant to the Resolutions of the Board of Directors dated November 18, 2021, and Shareholders Resolution dated November 18, 2021, the Company has instituted Aether Industries Limited Employees Stock Option Plan Scheme 2021 (hereinafter “ESOS Scheme 2021 ”). The ESOS Scheme 2021 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, later duly ratified by the Shareholders as well in the Annual General Meeting.

The Company has introduced the Aether Industries Limited Employees Stock Option Scheme 2021 (AIL ESOS 2021) primarily with a view to attract, retain, incentive and motivate the existing employees of the Company. The AIL ESOS 2021 contemplates the grant of options to eligible employees, as may be determined in due compliance of SEBI SBEB Regulations and provisions of the AIL ESOS 2021.

After vesting of options, the Eligible Employees earn a right (but not an obligation) to exercise the vested options within the exercise period and obtain equity shares of the Company subject to payment of exercise price and satisfaction of any tax obligation arising thereon. Details of the ESOP contained in Annexure-D.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI), namely Secretarial Standard on Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2), as amended from time to time.

Reporting of fraud by Auditors

There is no qualification, reservation or adverse remarks made by M/s. Suresh I. Surana & Associates, Statutory Auditors in their Audit Report, M/s. Dhirren R. Dave& Company, Secretarial Auditors in their Secretarial Audit Report, and Ms. Riddhi Chitaliya, Internal Auditor in her Internal Audit Report M/s. PAAA & Associates, Cost Auditors in their Cost Audit Report.

Apart from it, no instance of fraud committed against the Company by its employees or officers has been reported to the Audit Committee under Section 143(12) of the Companies Act, 2013.

Remuneration detail of employees

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the prescribed disclosures relating to the top ten employees in terms of remuneration drawn and other employee-related particulars form part of this Report. The requisite details are set out in Annexure-E.

Human Resources and Industrial Relations The Company takes pride in the commitment, competence, and dedication of its employees, who continue to contribute significantly to its growth and success. A structured induction programme is in place across all locations to facilitate the seamless integration of new employees, while continuous learning and management development initiatives are undertaken to enhance the capabilities and skills of managers and other employees.

The Company has established an objective performance appraisal system based on Key Result Areas (KRAs), which is consistently implemented to ensure a fair, transparent, and merit-based evaluation of employee performance.

The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and is a critical pillar to support the organizations growth.

The Company has established an objective performance appraisal system based on Key Result Areas (KRAs), which is consistently implemented to ensure a fair, transparent, and merit-based evaluation of employee performance.

The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and is a critical pillar to support the organizations growth.

The Company has aligned and collaborated R&D activities with many institutions and Universities in India. Company has associated with National Chemical Laboratory (NCL, Pune), Institute of Chemical Technology (ICT, erstwhile UDCT, Mumbai), Uka Tarsadia University (UTU, Bardoli) and Sardar Vallabhbhai National Institute of Technology (SVNIT, Surat). Also, it has contributed towards the programs for chemical engineer aspirants which, includes industrial training.

The Company has its own sponsored PhD programs which are ongoing for getting PhD research and degree done for its R&D team with above named Institutes.

Environment, Health and Safety Protection The Companys Health and Safety Policy commits to comply with applicable legal and other requirements concerning Occupational Health, Safety and Environment matters The Company has a due system for environmental issues, health and safety issues concerned with the employees and the same is reviewed at regular intervals.

Anti-Sexual Harassment Policy The Company has in place a Policy on Prevention of Sexual Harassment at the Workplace, in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”).

An Internal Committee has been constituted in accordance with the provisions of the POSH Act to receive, inquire into and redress complaints of sexual harassment at the workplace. The Company has also put in place appropriate practices for conducting training and awareness programmes for employees, with a view to enhancing awareness of the provisions of the POSH Act and fostering a safe, respectful and conducive work environment.

During the reported Financial Year, no complaints of sexual harassment were received by the Company.

Significant and material orders There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

Compliance with Maternity Benefit Act, 1961 The Company is compliant with the applicable provisions of the Maternity Benefit Act, 1961 and has policies, systems and processes in place to ensure ongoing compliance.

Proceedings under the Insolvency and Bankruptcy Code, 2016

No proceedings are initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016.

Valuation for one time settlement

There was no instance of one time settlement with any bank or financial institution.

Appreciation and Acknowledgement The Directors place on record their sincere appreciation for the dedication, commitment, and hard work of the Companys employees at all levels, whose continued efforts have significantly contributed to the Companys performance and growth.

The Board also expresses its gratitude to the Companys suppliers, retailers, dealers, distributors, business associates, clients, vendors, bankers, regulatory authorities, government authorities, and all other stakeholders for their continued support, trust, and cooperation. The Directors look forward to their continued association and support in the years ahead.

For Aether Industries Limited Ashwin Desai
Managing Director	DIN: 00038386
Rohan Desai
Whole Time Director	DIN: 00038379
July 31,2026