SFC Environmental Technologies Ltd Directors Report

To,

The Members of

SFC Environmental Technologies Limited

Your directors are pleased to present 21st Annual Report of SFC Environmental Technologies Limited (Formerly Known as SFC Environmental Technologies Private Limited) along with the Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2026.

1. FINANCIAL HIGHLIGHTS

Our Companys financial performance for the financial year under review is summarized below:

(Rs in Millions)

2. PERFORMANCE REVIEW

During the Financial Year 2025–26, the Company reported a Standalone Revenue from Operations of Rs5,588.50 million as against Rs4,743.96 million in Financial Year 2024–25, and a Profit After Tax of Rs1,341.39 million compared to Rs1,295.74 million in Financial Year 2024–25. On a Consolidated basis, Revenue increased to Rs8,036.29 million in Financial Year 2025–26 from Rs6,978.58 million in Financial Year 2024–25, and Profit After Tax rose to Rs1,602.13 million from Rs1,520.08 million in the previous year.

The Basic and Diluted Earnings Per Share (EPS) computed in accordance with the Indian Accounting Standard ("Ind AS") 33 for Financial Year 2025–26 stood at Rs14.36 per share on a standalone basis (Rs13.87 per share in Financial Year 2024–25) and Rs16.52 per share on a consolidated basis (Rs15.42 in financial year 2024–25).

3. DIVIDEND

During the year, the Board of Directors have not declared any dividend.

4. CHANGE IN THE NATURE OF BUSINESS

During the year, there are no changes in the business line of the Company. The Company is carrying its existing business activities.

5. RESERVES

The Company has not transferred any amount from profit and loss to general reserve during FY 2025-26.

6. SHARE CAPITAL

During the year, there were no changes in the capital structure of the Company.

Authorized Share Capital

The current Authorized Share Capital is Rs25,00,00,000/- (Rupees Twenty-Five Crores Only) divided into 12,50,00,000 (Twelve Crore Fifty Lakhs) Equity shares of Rs2/- (Rupees Two) each.

Paid-up Share Capital

The Current Paid-Up Share Capital of the Company is Rs18,68,22,540/- (Rupees Eighteen Crores Sixty-Eight Lakhs Twenty-Two Thousand Five Hundred and Forty Rupees Only) comprising of 9,34,11,270 (Nine Crores Thirty-Four Lakhs Eleven Thousand Two Hundred and Seventy only) Equity Shares of face value of Rs2/- (Rupees Two Only) each.

7. EXTRACT OF THE ANNUAL RETURN

Pursuant to amendment made on 28th August 2020 in section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, extract of annual return in MGT 9 is not required to be attached.

According to the amendment the web link for the annual return is www.sfcenviornment.com

The annual return will be uploaded on this website after the same is uploaded on mca.gov.in as it contains some data related to the Annual General Meeting.

The Annual Return as on March 31, 2025 is available on the Companys website on www.sfcenviornment.com and at the registered office of the Company.

8. BOARD OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND CHANGES THEREOF:

As on March 31, 2026, the Board of Directors was duly constituted as below:

During the period under review:

- Mr. Dilip Damodar Karambelkar (DIN: 00970812), Mr. Satish Chandrashekhar Deshpande (DIN: 03153724), Mr. Nandkishor Trivikram Joshi (DIN: 02070242) and Mrs. Neha Rajen Gada (DIN: 01642373) were re-appointed as an Additional Non-Executive Independent Directors w.e.f. August 14, 2025 and were appointed as a Non-Executive Independent Directors at an Annual General Meeting on 30th September 2025

- Mr. Chandrakant Vallabhaji Gogri (DIN: 00005048) resigned from the Directorship of the Company w.e.f February 24, 2026.

- Ms. Prachiti Sandeep Asolkar (DIN: 10626304) was appointed as an Additional Executive Director w.e.f. March 24, 2026.

- Apart from the above, there were no changes at the Board for the financial year ended on March 31, 2026.

Changes in Directors after the close of the Financial Year 2025-26:

- Mr. Dilip Damodar Karambelkar (DIN: 00970812), Mr. Satish Chandrashekhar Deshpande (DIN: 03153724) and Mr. Nandkishor Trivikram Joshi (DIN: 02070242) Non-Executive Independent Directors were retired due to completion of the term of appointment w.e.f. August 13, 2026.

- Mr. Mulesh Manilal Savla (DIN: 07474847), Ms. Amruta Shrippad Patankar (DIN: 09556394) and Mrs. Divya Sameer Momaya (DIN: 00365757) were appointed as an Additional Director (Category- Non-Executive Independent Directors) w.e.f. August 14, 2026 and their appointment is till the ensuing Annual General Meeting, members are requested to appoint term as a Director (Category – Non-Executive Independent Directors) at the meeting.

- Ms. Prachiti Sandeep Asolkar (DIN: 10626304) was appointed as Executive Director w.e.f. June 12, 2026 at the Extra Ordinary General Meeting.

None of the Directors of the Company are disqualified under section 164 of the Companies Act, 2013 from being appointed as a Director.

RETIREMENT BY ROTATION:

Mr. Saketchandrasinh Pratapsinh Dhandoriya (DIN: 06873114), Executive Director, liable to retire by rotation, and being eligible, has offered himself for re-appointment at the 21st AGM. The Notice convening the 21st AGM forming part of this Annual Report, includes the proposal for reappointment.

9. COMMITTEES OF THE BOARD

As on March 31, 2026, there were Seven Board Committees, namely:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Corporate Social Responsibility Committee

e. Risk Management Committee

f. Management Committee

g. ESG Committee

10. MEETINGS

i. Board Meetings

During the year under review, the Board of Directors of the Company convened Ten (10) meetings during the year, all the Board Meetings were conducted in due compliance with Companies Act, 2013 and gap between the two (2) consecutive meetings did not exceed one hundred and twenty (120) days. The following Meetings of the Board of Directors were held during the year:

ii. Annual General Meeting:

During the year, the Annual General Meeting of the Company was held on September 30, 2025.

iii. Extra-Ordinary General Meeting:

During the year, Extra-Ordinary General Meeting of the Company was held on April 15, 2025.

iv. Committee Meetings:

During the year Committee Meetings of the Company were held as follows:

During the year under review, Company has constituted the Management Committee & ESG Committee vide Board Resolution dated March 24, 2026.

The Audit Committee, Nomination and Remuneration committee, Risk management committee, Stakeholders relationship committee and the Corporate social responsibility committee were reconstituted vide Board Resolution dated March 24, 2026.

Changes in Committees after the close of the Financial Year:

The Audit Committee, Nomination and Remuneration committee, Risk management committee, Stakeholders relationship committee, Corporate social responsibility committee and ESG Committee were reconstituted vide Board Resolution dated August 13, 2026.

11. STATUTORY AUDITORS, THEIR REPORT AND NOTES TO FINANCIAL STATEMENTS

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s G B C A & Associates LLP, Chartered Accountants (Firm Reg. No. W100292/103142W), were appointed in the 18th Annual General Meeting on 18th November, 2023 to hold office for the period of 5 years till the conclusion of the 24th Annual General Meeting to be held in the financial year 2028-29. M/s. G B C A & Associates LLP, Chartered Accountants (Firm Reg. No. W100292/103142W), had given their consent for appointment as the Statutory Auditors of the Company.

The Board has duly examined the Statutory Auditors Report to the Standalone and Consolidated financial statements for the financial year ended March 31, 2026. and Statutory Auditors Report do not contain any qualification, reservation or adverse remark.

12. SECRETARIAL AUDITORS

During the year, pursuant to the provisions of Section204 of the Companies Act, 2013, the Company appointed M/s NAM & Associates, Company Secretary, Pune as Secretarial Auditor of the Company to conduct the Secretarial Audit of the Company for the Financial Year 2025-26, and the report of the Secretarial Audit in form MR-3 is annexed hereunder in Annexure – III.

13. INTERNAL AUDITOR

During the year, pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Company appointed M/s Gokhale Associates, Chartered Accountants, Navi Mumbai as Internal Auditor of the Company to conduct the Internal Audit of the Company for the Financial Year 2025-26.

14. DISCLOSURE ON COST RECORDS MAINTENANANCE

During the year, the provisions with respect to maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 were applicable to the Company and duly complied with. The Company has appointed M/s. Joglekar Karekar & Associates LLP, Cost Accountant (FRN – 002299) vide Board Resolution dated September 25, 2025.

15. DISCLOSURE OF FRAUD

The auditors have not found any fraud as required to be reported by them under section 143(12) to the Central Government during the year 2025-26.

16. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has following subsidiaries, Joint Ventures and Associate Companies:

- HINDUSTAN WASTE TREATMENT PRIVATE LIMITED: This is a wholly owned subsidiary of our Company wherein our Company beneficially holds 3,90,40,000 equity shares of Rs. 10/- each.

- VASUDHA WASTE TREATMENT PRIVATE LIMITED: This is a wholly owned subsidiary of the Company wherein our Company holds 10,00,000 equity shares of Rs. 10/- each.

- SUSTAINYX SMART SOLUTION PRIVATE LIMITED (Formerly Known as Navitas Waste Treatment Private Limited): This is a wholly owned subsidiary of the Company wherein our Company holds 10,000 equity shares of Rs. 10/- each.

- FINE AERATION SYSTEMS PRIVATE LIMITED: This is a subsidiary of the Company wherein our Company holds 51,000 equity shares of Rs. 10/- each representing 51% Equity Stake.

- PENTAGEN BIOFUELS PRIVATE LIMITED: This is a wholly owned subsidiary of our Company wherein our Company holds 20,00,000 equity shares of Rs. 10/- each.

- CHAVARE ENGINEERING PRIVATE LIMITED: This is a subsidiary of the Company wherein our Company holds 2,04,000 Equity shares of Rs. 100/- each of Chavare Engineering Private Limited representing 51% Equity Stake.

- SFC UMWELTTECHNIK GMBH (AUSTRIA): This isa whollyowned subsidiary of the Company wherein our Company holds 8,75,000 equity shares of Euro 1/- each.

- IST-ANLAGENBAU GMBH: This is a subsidiary of the Company wherein our Company holds holds 1,00,000 equity shares of Euro 1/- each of IST-Anlagebau GmbH representing 80% Equity Stake.

- TURBOMAX INDIA PRIVATE LIMITED: This is an associate of the Company wherein our Company holds Company holds 2,00,16,990 equity shares of Rs. 10/- each representing 49% Equity Stake.

- Apart from above, the Company is having following subsidiaries /associate/joint venture through its subsidiaries:

1. SFC Ekoteknika S.r.o: 100 % subsidiary of SFC Umwelttechnik GmbH (Austria).

2. Endress + Hauser & Chavare Engineering (JV) Private Limited: Associate of Chavare Engineering Private Limited.

3. Nanded Biofuels Private Limited: 100% wholly owned subsidiary of Hindustan Waste Treatment Private Limited

The details of financials of the above-mentioned subsidiaries, Joint Ventures or Associate Companies have been given in Form AOC-1 as Annexure- I to this report.

In addition to above, Chavare Engineering & Endress Plus Hauser JV is a step-down subsidiary of the Company as per Ind AS. Chavare Engineering &Endress Plus Hauser JV is a non-corporate entity (association of persons) and has been consolidated in the Consolidated Financial Statements in accordance with the requirement of Ind AS 110 "Consolidated Financial Statement".

17. CORPORATE SOCIAL RESPONSIBILITY

A brief outline of the Corporate Social Responsibility (CSR) Policy of the Company along with the initiative taken by your Company are set out in Annexure - II to this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

18. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The particulars of the loans, Guarantees or investments made by the Company forms part of the notes to Financial Statements. The Company being involved in providing infrastructural facilities read with Schedule VI of Companies Act, 2013, the provisions of Section 186 are not applicable.

19. PARTICULARS OF LOANS TAKEN BY DIRECTORS OR THEIR RELATIVES

The Company has not taken unsecured loans from entities in which Directors of the Company are interested; the Company has not taken any unsecured loans from Directors of the Company or their relatives during the year.

20. ESTABLISHMENT OF VIGIL MECHANISM

Provisions of Section 177(9) and (10) of the Companies Act, 2013 for establishment of Vigil Mechanism are applicable to the Company and the Audit Committee of the Company oversees the functioning of the Vigil Mechanism.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year, all the related party transaction entered by the Company referred to sub-section (1) of section 188 of the Companies Act, 2013 with the related parties as defined under section 2(76) and 2(77) of the Companies Act, 2013 read with Companies (Specification and Definitions Details) Rules, 2014 are on arms length and in the ordinary course of business. Hence, disclosure in Form AOC-2 with respect to material related party transactions is not required to given in this Report.

22. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

During the year, no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and the date of this report.

23. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, the details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A. Conservation of energy

The Companys operations are not energy intensive and as such involve low energy consumption. However, adequate measures have taken to conserve the consumption of energy.

B. Technology absorption

The Company has not imported any technology and hence the question of its absorption does not arise.

C. Foreign exchange earnings and Outgo

Foreign Exchange Earnings – Rs3.66 Million (Previous Year- NIL)

Foreign Exchange Expenditure – Rs1,405.71 Million (Previous Year – Rs854.93 Million)

24. DEPOSITS

During the year, there is no deposit accepted which is covered under Chapter V of the Companies Act, 2013.

25. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

During the year, the Company has proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly. The Company has effective system in place for achieving efficiency in operations, optimum and effective utilization of resources, monitoring thereof & compliance with applicable laws.

26. FORMAL ANNUAL EVALUATION

Pursuant to the provisions of Section 134(3)(p) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, the Board of Directors has carried out a formal annual evaluation of its own performance, the performance of various Committees of the Board, and of individual Directors.

The evaluation was conducted based on a structured questionnaire covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, culture, execution and performance of specific duties, obligations, and governance. The performance of individual Directors was evaluated on parameters such as preparedness, participation, and contribution at Board and Committee meetings, and their commitment to the role and responsibilities as Directors.

The Board expressed satisfaction with the overall functioning of the Board, its committees, and the performance of individual Directors.

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

In order to prevent sexual harassment of women at work place, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any woman employee.

The Company is committed to provide a safe and conducive work environment to its employees and Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy.

Your directors further state that during the year under review,

a. Number of complaints of sexual harassment received in the year; NIL

b. Number of complaints disposed off during the year; and NIL

c. Number of cases pending for more than ninety days. NIL

The company is in due compliance with the provisions relating to the Maternity Benefit Act, 1961.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

During the year under, review there are no such material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

29. DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, your directors confirm that the mandatory Secretarial Standards (SS-1 & SS-2) issued by the Institute of Company Secretaries of India, have been complied with.

30. DISCLOSURE REGARDING THE ISSUE OF EMPLOYEE STOCK OPTIONS

The Company has not issued any shares under employees stock options scheme pursuant to provisions of Section Rule 12(9) of Companies (Share Capital and Debenture Rules, 2014), thereby no question arises about voting rights not exercised by employees.

31. DISCLOSURE REGARDING THE ISSUE OF SWEAT EQUITY SHARES

The Company did not issue any sweat equity shares pursuant to provisions of Section 54 read with Rule 8 of Companies (Share Capital and Debenture Rules, 2014) during the Financial Year.

32. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, there were no applications made or proceeding spending in the name of the Company under the Insolvency and Bankruptcy Code, 2016.

33. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS

During the year under review, there has been no one time settlement of loans taken from Banks and financial institutions.

34. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

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

b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit 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 this Act for safeguarding the assets of the company and for preventing and detecting fraud 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.

ACKNOWLEDGMENTS

The Board of Directors wish to place on record its appreciation for the commitment, dedication and hard work done by the employees of the Company and the cooperation extended by Banks, Government Authorities, Customers, Shareholders and looks forward to a continued mutual support and co-operation.