Vadivarhe Speciality Chemicals Ltd Directors Report

VADIVARHE SPECIALITY CHEMICALS LIMITED FOR THE FY 2025-26

To

The Members

Vadivarhe Speciality Chemicals Limited Gat No. 204, Vadivarhe, Igatpuri - 422 403

Your Directors are hereby presenting the 17th Directors Report on the Company together with the Audited Statement of Accounts for the financial year ended March 31,2026.

1. FINANCIAL STATEMENTS & RESULTS:

Financial Results

The Companys financial performance during the year ending March 31,2026, as compared to the previous financial year, is summarized as below:

		(Rs. in Lacs)
Particulars	For the financial year ended 31st March, 2026	For the financial year ended 31st March, 2025
Income	4640.62	3817.45
Less: Expenses	4836.61	4749.73
Prior Period Income	-	-
Profit before exceptional and extraordinary items and tax	(195.98)	(932.27)
Exception Income	32.31	5.75
Exception expenditure	-	-
Profit/ (Loss) before tax	(163.76)	(926.53)
Less: Provision for tax	-	-
Deferred Tax Expense/(Benefits)	-	-
Profit after Tax	(163.76)	(926.53)
APPROPRIATION
Interim Dividend	-	-
Final Dividend	-	-
Tax on distribution of dividend	-	-
Transfer of General Reserve	-	-
Balance carried to Balance sheet	(163.76)	(926.53)

2. TRANSFER TO RESERVES:

The Company has not transferred any amount to the General Reserve account during the financial year under review.

3. OPERATIONS:

This being the seventeenth year of operations, the Company continued its efforts towards strengthening its business operations, improving operational efficiencies and enhancing its overall financial performance.

During the financial year ended March 31,2026, the Company achieved total revenue of Rs.4,640.62 Lakhs, as compared to Rs.3,817.45 Lakhs in the previous financial year, reflecting an increase of approximately 21.56%.

The Company also witnessed a significant improvement in its profitability during the year. The Loss After Tax was substantially reduced to Rs.163.76 Lakhs for FY 2025-26, as compared to a loss of Rs.926.53 Lakhs in the previous financial year, representing a reduction in losses of approximately 82.32%.

The improvement in the Companys financial and operational performance was supported by increased business activity, improved product mix, better capacity utilisation and the continued focus of the management on cost optimisation, efficient utilisation of raw materials and improvement in manufacturing processes.

The Company continues to focus on strengthening its product portfolio through the development and commercialisation of new products and technologies. The management remains committed to improving operational efficiency, increasing revenues, strengthening working capital management and enhancing profitability in the coming years.

4. CHANGE IN NATURE OF BUSINESS, IF ANY:

The Company continues to be engaged in the activities pertaining to manufacturing of all types of Organic Chemicals, Inorganic Chemicals, Bio-Chemicals, Bulk Drugs, Drug Intermediaries and Active Pharmaceutical Ingredients and to provide related services.

There has been no change in the nature of business of the Company during the year under review.

5. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

Your Directors are pleased to present a review of the Companys business operations and performance during the financial year under review, together with its outlook and future prospects:

a. Production and Profitability

The Company continued its efforts towards improving productivity, enhancing capacity utilisation and optimising its manufacturing operations during the year under review. The management remains focused on achieving optimum utilisation of the Companys production facilities and improving operational efficiencies across various stages of the manufacturing process.

Continuous efforts are being made to improve product yields, optimise the consumption of raw materials and other resources and minimise the overall cost of production. The Company also continues to focus on the development and commercialisation of new products with the objective of expanding its product portfolio, improving product realisation and generating additional revenue streams.

The Companys efforts towards better product mix, improved manufacturing efficiency and stringent cost-control measures contributed to a significant improvement in its financial performance during FY 2025-26. The loss incurred by the Company was substantially reduced as compared to the previous financial year.

Going forward, the Company intends to continue its focus on improving capacity utilisation, increasing productivity, optimising production costs and developing higher-value products with the objective of strengthening its operational and financial performance.

b. Marketing and Market environment

During FY 2025-26, the Company continued its operations in the specialty chemicals, Active Pharmaceutical Ingredients (APIs) and chemical intermediates segments. The business environment continued to be influenced by various factors, including volatility in raw material prices, fluctuations in foreign exchange rates, changes in global and domestic demand, evolving regulatory requirements and competition from domestic as well as international manufacturers.

The Company continued to focus on strengthening its customer relationships, expanding its market reach and diversifying its product portfolio. Efforts are being made to develop new products, explore additional business opportunities and cater to the evolving requirements of customers across different industries and markets.

The management also continued its focus on improving operational efficiency, optimising costs and strengthening its competitive position through product quality, manufacturing capabilities, customer service and reliability of supply.

The Companys diversified product applications across pharmaceutical, agrochemical, personal care and specialty chemical industries provide opportunities to cater to multiple market segments. The management remains focused on leveraging these opportunities while continuing to respond to changes in market conditions and customer requirements.

c. Future Prospects including constraints due to Government policies

The Company continues to evaluate opportunities for business growth through the development of new products, expansion of its product portfolio, improved capacity utilisation and strengthening of its presence in existing and potential new markets.

The Company has also secured sales orders for execution during the initial part of FY 2026-27 and continues to work on the development and commercialisation of new products and technologies. The management expects these initiatives to contribute positively to revenue growth and operational performance, subject to market conditions and other business factors.

The future performance of the Company may be influenced by factors such as availability and cost of raw materials, foreign exchange fluctuations, working capital availability, changes in demand, competitive pressures, regulatory developments and general economic conditions.

During the year under review, there were no significant changes in Government policies having a material adverse impact specifically on the Companys operations in the API and chemical intermediates segments. However, the Company continues to monitor changes in applicable laws, regulations and Government policies and takes appropriate measures to ensure compliance and manage the impact of any regulatory developments.

The management remains cautiously optimistic about the future prospects of the Company and will continue its efforts towards improving revenues, operational efficiency and profitability through prudent financial management, product innovation and sustainable business development.

6. DIVIDEND:

Company has suffered from huge losses, and your directors have decided not to recommend any dividend for the financial year under review.

7. UNPAID DIVIDEND & IEPF:

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the IEPF Rules”), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF; established by the Government of India, after completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

However, your Company has never declared any dividend in its lifetime and consequently did not have any funds lying unpaid or unclaimed for a period of seven years in an Unpaid Dividend Account. Therefore, there were no funds which were required to be transferred to Investor Education and Protection fund (“IEPF”).

8. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

During the year under review, it is not applicable to the Company as the Company does not have any Subsidiary / Associate / Joint Venture Company.

9. DEPOSITS:

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 (“the Act”) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with the Chapter V of the Act is not applicable to the company.

10. LOAN FROM DIRECTORS:

The Company has outstanding loans from Mr. Sunil Haripant Pophale, Chairman and Executive Director, and Mrs. Meena Sunil Pophale, Whole-time Director, as on March 31,2026.

The aforesaid loans include balances outstanding from earlier periods. During the financial year under review, there were movements in the loan accounts, including repayment of loans to the Directors. As disclosed in the audited financial statements, the Company repaid an aggregate amount of Rs.3,49,34,600 to Mr. Sunil H. Pophale during FY 2025-26. The audited financial statements also disclose a fresh loan transaction of Rs.16,39,200 from Mr. Sunil H. Pophale during the year. No fresh loan transaction or repayment to Mrs. Meena S. Pophale is disclosed for FY 2025-26 in the individual related-party transaction details.

Both Mr. Sunil Haripant Pophale and Mrs. Meena Sunil Pophale have furnished declarations in writing to the Company confirming that the amounts advanced by them are not out of funds acquired by them by way of borrowing or accepting loans or deposits from other persons. Accordingly, the amounts outstanding and qualifying under the applicable conditions are not treated as “deposits” in terms of Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014.:-

Name of Director giving Amount outstanding loan as on March 31, 2026

Mr. Sunil Haripant Pophale Rs. 13,07,68,000/- Mrs. Meena Sunil Pophale Rs. 1,00,44,800/-

11. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

During the financial year under review, the Company entered into transactions with its related parties in the ordinary course of business and on an arms length basis. Such transactions were undertaken in compliance with the applicable provisions of the Companies Act, 2013, the rules made thereunder and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable.

The related party transactions were reviewed and approved by the Audit Committee, including through omnibus approval, wherever applicable, in accordance with the provisions of Section 177 and other applicable provisions of the Companies Act, 2013, and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors also reviewed such transactions, wherever required under the applicable provisions.

The Company has formulated a Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions in accordance with the applicable provisions of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations. The said Policy is available on the website of the Company

The disclosure of Related Party Transactions, as required under Regulation 23(9) of the SEBI Listing Regulations, has been submitted to the Stock Exchange on a half-yearly basis within the prescribed timelines.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, wherever applicable, are provided in Annexure I in E-Form AOC-2, forming part of this Report.

The related party transactions entered into during the year did not require approval of the shareholders under the applicable provisions of the Companies Act, 2013 or Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The disclosures relating to related party transactions, as required under the applicable accounting standards and other applicable laws, form part of the financial statements for the financial year ended March 31,2026.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The operations of the Company are not energy intensive in nature. Nevertheless, the Company recognises the importance of efficient utilisation of energy and continues to undertake appropriate measures for conservation of energy, wherever feasible and economically viable. The Company also evaluates the use of alternate and energy-efficient sources and technologies with a view to optimise energy consumption and improve operational efficiency.

The Company remains committed to the conservation of natural resources, protection of the environment and maintenance of appropriate health and safety standards across its operations. Continuous efforts are made to promote efficient utilisation of resources and to adopt suitable measures for sustainable and responsible business operations.

During the year under review, the Company did not absorb or import any new technology. However, the Company continues to evaluate and explore appropriate technologies and process improvements that may contribute towards enhancing operational efficiency, product quality and productivity.

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in ANNEXURE II, which forms an integral part of this Report.

13. ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the copy of The Annual Return of the Company for FY 2025-26, prepared in accordance with Section 92(3) of the Companies Act, 2013, will be made available on the Companys website upon filing with the Registrar of Companies at: https://www.vscl.in/investor/annual-returns.php

14. SHARE CAPITAL

During the Financial Year 2025-26, there were no changes in the share capital of the Company. The existing share capital of the Company is as stated below: -

A. Authorized Share Capital

The Authorized share capital of the Company is Rs. 15,00,00,000 comprising of 1,50,00,000 Equity Shares of Rs. 10 each.

B. Issued, subscribed and paid-up share capital

The issued, subscribed, and paid-up share capital of the Company is Rs. 12,78,27,500 as at March 31, 2026, comprising of 1,27,82,750 Equity Shares of Rs. 10 each fully paid-up.

Subsequent to the close of the financial year, pursuant to the approval of the Board of Directors dated March 13, 2026 and approval of the Members obtained through Postal Ballot concluded on April 12, 2026, the Company allotted 22,17,250 Equity Shares of face value of Rs.10 each at an issue price of Rs.20 per Equity Share, including a premium of Rs.10 per share, aggregating to Rs.4,43,45,000, to Mr. Sunil Haripant Pophale, Promoter, by way of conversion of outstanding unsecured loan into equity shares.

The allotment was approved by the Board through circular resolution dated April 23, 2026.

Consequent upon the aforesaid allotment, the paid-up share capital of the Company increased to Rs. 15,00,00,000 comprising 1,50,00,000 Equity Shares of Rs. 10 each fully paid-up.

15. COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2

The Company has complied with the applicable Secretarial Standards, namely Secretarial Standard-1 (SS-1) on Meetings of the Board of Directors and Secretarial Standard-2 (SS-2) on General Meetings, issued by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government under the applicable provisions of the Companies Act, 2013.

The Company has ensured compliance with the applicable requirements relating to the convening and conduct of meetings of the Board of Directors and its Committees, as well as General Meetings, including the issuance of notices, maintenance of minutes and other applicable procedural requirements.

16. PARTICULARS OF INVESTMENTS, LOANS, GUARANTEES AND SECURITIES

During the financial year under review, the Company has not granted any loans, provided any guarantees or securities or made any investments falling within the purview of Section 186 of the Companies Act, 2013, except as disclosed in the financial statements, wherever applicable.

The details of investments, wherever applicable, are disclosed in the relevant notes forming part of the financial statements.

17. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Subsequent to the close of the financial year ended March 31, 2026, the Company completed a preferential allotment of 22,17,250 Equity Shares, aggregating to Rs.4.4345 Crore, pursuant to the conversion of outstanding unsecured loans of Promoter into equity shares, as detailed under the “Share Capital” section of this Report.

The aforesaid conversion and preferential allotment resulted in the conversion of a portion of the Companys outstanding unsecured liabilities into equity and is expected to strengthen the Companys capital structure.

Save as aforesaid, there have been no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report, except as otherwise disclosed in this Report and/or the financial statements..

18. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS

The Company has established and maintained adequate internal financial controls with reference to financial statements, commensurate with the size, scale and nature of its operations. These controls are designed to provide reasonable assurance regarding the reliability of financial reporting, accuracy and completeness of accounting records, safeguarding of assets, prevention and detection of frauds and errors, and compliance with applicable policies and procedures.

During the year under review, the Statutory Auditors, as part of their audit of the Internal Financial Controls over Financial Reporting, observed that the internal financial controls were operating effectively, while identifying certain areas requiring improvement in relation to the flow and recording of entries relating to material consumed and cost of goods sold in the SAP system, particularly with respect to material offset, clearing and inventory variance ledgers. The Management has taken note of the observations and is undertaking appropriate measures to strengthen the relevant processes, controls and review mechanisms.

The Company has a structured Internal Audit mechanism, which is conducted in accordance with a pre-approved audit calendar. The Internal Auditor periodically reviews the adequacy and effectiveness of the Companys processes and controls and reports identified control deficiencies, process gaps and operational inefficiencies, if any, along with recommendations for improvement. The observations and agreed action plans are placed before the Audit Committee for its review and oversight. The Audit Committee periodically monitors the implementation of corrective measures and evaluates the adequacy and effectiveness of the internal control framework.

The Company remains committed to continuously strengthening its internal control environment and improving the efficiency and effectiveness of its operational and financial processes.

a) Board of Directors

The Board of Directors of Vadivarhe Speciality Chemicals Limited (“VSCL” or “the Company”) comprises an appropriate mix of Executive and Independent Directors, having diverse experience, expertise and knowledge. The composition of the Board is in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable to the Company.

The Board provides strategic direction and guidance to the management and oversees the overall governance, operations, financial performance and long-term growth of the Company. The Directors actively participate in the meetings of the Board and its Committees and contribute to informed decision-making through their collective experience and expertise.

The Board is headed by Mr. Sunil Haripant Pophale, Chairman and Executive Director, who provides strategic leadership and guidance to the Company. The Board, collectively, formulates broad policies, reviews the Companys business and operational performance, evaluates strategic initiatives and provides guidance to the management in achieving the Companys business objectives.

The composition of the Board of Directors of the Company as on March 31, 2026, is as follows:

Name of the Director	Designation	DIN
Mr. Sunil Haripant Pophale	Chairman & Executive Director	00064412
Mrs. Meena Sunil Pophale	Whole-time Director	00834085
Mr. Prasanna Prabhakar Rege	Independent Director	02795136
Mr. Ravindra Keshav Paranjpe	Independent Director	06816384
Mrs. Uttara Adwait Kher	Independent Director	07805920

i. Appointment/ Resignation

During the financial year under review, Mr. Anil Suryavanshi resigned from the office of Wholetime Director of the Company with effect from June 9, 2025.

There were no other appointments or resignations of Directors during the financial year under review.

ii. Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Meena Sunil Pophale (DIN: 00834085), Whole-time Director of the Company, being the Director liable to retire by rotation and being eligible for re-appointment, has offered herself for re-appointment at the ensuing Annual General Meeting.

The Board, based on the recommendation of the Nomination and Remuneration Committee, recommends her re-appointment as a Director of the Company, liable to retire by rotation.

b) Key Managerial Personnel (other than Directors)

During the financial year under review, there were changes in the Key Managerial Personnel of the Company.

i. Mr. Susheel Koul tendered his resignation from the position of Chief Executive Officer of the Company and ceased to hold office with effect from the close of business hours on April 30, 2025.

ii. Mr. Laxmikant Potdar resigned from the position of Chief Financial Officer of the

Company and ceased to hold office with effect from the close of business hours on May 31, 2025.

iii. Subsequently, Mr. Madhukar Suvarna was appointed as the Chief Financial Officer of the Company with effect from August 27, 2025.

The Key Managerial Personnel (KMP) of the Company as on March 31,2026, are as follows:

Name	Designation	Date of appointment
Mr. Manoj Kumar *	Company Secretary & Compliance Officer	27/05/2024
Mr. Madhukar Suvarna	Chief Financial Officer	27/08/2025

* Subsequent to the close of the financial year, Mr. Manoj Kumar resigned from the position of Company Secretary and Compliance Officer with effect from August 31,2026. Mr. Shrikant Kabra was appointed as Company Secretary and Compliance Officer with effect from September 3, 2026.

c) Declaration by Independent Directors

The Independent Directors of the Company have furnished the requisite declarations under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence specified under Section 149(6) of the Act and the applicable provisions of the SEBI Listing Regulations and are not aware of any circumstance which exists or may reasonably be anticipated to impair or impact their ability to discharge their duties with an objective independent judgment.

The Board has taken the same on record.

d) Remuneration / Commission drawn from Holding / Subsidiary Company

The Company does not have any Holding Company or Subsidiary Company, hence question of remuneration or commission from any of its Holding or Subsidiary Company does not arise.

Note: Attendance is indicated by “V” for Directors who were present at the respective meeting. “Absent” indicates that the Director was not present at the respective meeting.

Board meetings

The Board of Directors met 5 (Five) times during the financial year ended March 31, 2026, in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The details of the same are as mentioned under:

Name of the Director	May 29, 2025	August 26, 2025	November 14, 2025	January 23, 2026	March 13, 2026
Mr. Sunil Haripant Pophale	?	?	?	?	?
Mrs. Meena Sunil Pophale	?	?	?	?	?
Mr. Prasanna Prabhakar Rege	?	?	Absent	?	?
Mr. Ravindra Keshav Paranjpe	?	?	?	?	?
Mrs. Uttara Adwait Kher	?	?	?	?	?
Mr. Anil Ganpat Suryavanshi	?	-	-	-	-

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

a) Audit Committee

The Audit Committee is constituted in accordance with Section 177 of the Companies Act, 2013 and the applicable provisions of the SEBI Listing Regulations. During the year, the Committee discharged its functions in accordance with its terms of reference, including review and approval of related party transactions in accordance with the applicable provisions of law and the Companys Related Party Transaction Policy.

The Audit Committee comprises of:

Name of the Members	Designation
Mr. Prasanna Prabhakar Rege	Chairman & Independent Director
Mr. Ravindra Keshav Paranjpe	Member & Independent Director
Mrs. Uttara Adwait Kher	Member & Independent Director

The Audit Committee met 5 (Five) times during the financial year ended March 31, 2026. The details of the same are as mentioned under:-

Name of the Director	May 29, 2025	August 26, 2025	November 14, 2025	January 23, 2026	March 13,2026
Mr. Ravindra Keshav Paranjpe	?	?	?	?	?
Mrs. Uttara Adwait Kher	?	?	?	?	?
Mr. Prasanna Rege	?	?	Absent	?	?

The scope and terms of reference of the Audit Committee have been framed in accordance with the Act read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Committee, and no personnel has been denied access to the Audit Committee.

b) Nomination and Remuneration Committee

The Nomination and Remuneration Committee is constituted in accordance with Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014 as amended from time to time. The scope and terms of reference of the Nomination & Remuneration Committee have been framed in accordance with the Act.

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration of Directors, Key Managerial Personnel and other employees. The Policy has been placed on the Website of the Company at https://vscl.in/uploads/pdf/NRC%20Policy.pdf.

The composition of the Committee is as under:

Name of the Members	Designation
Mr. Prasanna Prabhakar Rege	Chairman & Independent Director
Mr. Ravindra Keshav Paranjpe	Member & Independent Director
Mrs. Uttara Adwait Kher	Member & Independent Director

The Nomination & Remuneration Committee met 3 (Three) times during the financial year ended March 31,2026. The details of the same are as mentioned under: -

Name of the Director	May 29, 2025	August 26, 2025	January 23, 2026
Mr. Ravindra Keshav Paranjpe	?	?	?
Mrs. Uttara Adwait Kher	?	?	?
Mr. Prasanna Rege	?	?	?

c) Stakeholders Relationship Committee

The Stakeholder’s Relationship Committee is constituted in accordance with Section 178 of the Companies Act, 2013.

The composition of the Committee is as under:

Name of the Members	Designation
Mr. Prasanna Prabhakar Rege	Chairman & Independent Director
Mr. Ravindra Keshav Paranjpe	Member & Independent Director
Mrs. Uttara Adwait Kher	Member & Independent Director

The scope and terms of reference of the Stakeholders Relationship Committee have been framed in accordance with the Act.

The Stakeholders Relationship Committee met once on January 23, 2026, during the financial year ended March 31,2026. The details of the same are as mentioned under:

Name of the Director	January 23, 2026
Mr. Prasanna Prabhakar Rege	V
Mr. Ravindra Keshav Paranjpe	V
Mrs. Uttara Adwait Kher	V

During the year under review, the Company has not received any complaints from the Shareholders. There was no complaint pending as on March 31,2026.

d) Independent Directors meeting

In Compliance with Clause VII of Schedule IV of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; the Independent Directors Meeting of the Company was held on January 23, 2026. Independent Directors Meeting considered the performance of Non-Independent Directors and Board as a whole, reviewed the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board.

Whenever any new Independent Director is appointed, he/she is made familiar to the business and its operations and also about his/her role and duties through presentations/programmes by Chairman, Managing Director and Senior Management.

The independent directors present at the meeting held on January 23, 2026, are as follows:

Name of the Directors	Position	Status	January 23,2026
Mr. Prasanna Rege	Chairman	Independent Director	?
Mr. Ravindra Keshav Paranjpe	Member	Independent Director	?
Mrs. Uttara Adwait Kher	Member	Independent Director	?

e) Vigil Mechanism

Pursuant to the provisions of Section 177(9) and (10) of the Companies Act, 2013, read with the applicable provisions of the Companies (Meetings of Board and its Powers) Rules, 2014 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established a Vigil Mechanism, including a Whistle Blower Policy, for its Directors and employees.

The Vigil Mechanism provides an appropriate mechanism for Directors and employees to report genuine concerns and instances of unethical behaviour, actual or suspected fraud, violation of the Companys policies, applicable laws or regulations, or any other improper or unethical conduct. The mechanism provides adequate safeguards against victimisation of persons who avail themselves of the mechanism and also provides for direct access to the Chairperson of the Audit Committee, in appropriate or exceptional cases.

The Company is committed to maintaining the highest standards of ethical, moral and legal conduct in its business operations and encourages its stakeholders to report genuine concerns without fear of retaliation.

The Whistle Blower Policy of the Company is also available on the website of the company at the link: https://vscl.in/uploads/pdf/Whistle%20Blower%20Policy.pdf

f) Risk Management Policy

The Board of Directors of the Company has formulated and implemented a Risk Management Policy and framework to identify, assess, monitor and mitigate risks that may have an adverse impact on the Companys business, operations, financial performance or long-term objectives. The framework provides a structured approach for managing uncertainties and assists the management and the Board in incorporating risk considerations into strategic and operational decision-making across the Companys business activities and corporate functions.

The Company recognises that effective risk management is an integral part of sound corporate governance and sustainable business operations. Accordingly, the management periodically identifies and evaluates significant risks and takes appropriate measures to minimise their potential impact.

The key risks identified by the Company include, inter alia, volatility in raw material prices, foreign exchange fluctuations, changes in market demand, regulatory and compliance requirements,

The Companys risk management framework is designed to provide reasonable assurance that significant risks are identified and managed in a timely and effective manner. However, the nature of business involves certain inherent risks, and the Company continues to strengthen its systems and processes to respond appropriately to changes in the internal and external business environment.

g) Annual Evaluation of Directors, Committee and Board

The Board has carried out an annual performance evaluation of its own performance, and of the Directors individually, as well as the evaluation of all the committees i.e., Audit, Nomination and Remuneration, Stakeholders Relationship and other Committees of Board of Directors.

The Board adopted a formal evaluation mechanism for evaluating its performance and as well as that of its committees and individual directors, including the Chairman of the Board. The exercise was carried out by feedback survey from each Directors covering Board functioning such as composition of Board and its Committees, experience and competencies, governance issues etc. Separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board who were evaluated on parameters such as attendance, contribution at the meeting etc.

The various criteria considered for evaluation of Executive Directors included qualification, experience, knowledge, commitment, integrity, leadership, engagement, transparency, analysis, decision making, governance etc. The Board commended the valuable contributions, and the guidance provided by each Director in achieving the desired levels of growth. This is in addition to the evaluation of Non-Independent Directors and the Board as a whole by the Independent Directors in their separate meeting being held every year.

h) Management Discussion & Analysis

A separate report on Management Discussion & Analysis is appended to this Annual Report as an “ANNEXURE III” and forms part of this Directors’ Report.

21. PARTICULARS OF SENIOR MANAGEMENT INCLUDING THE CHANGES THEREIN SINCE THE CLOSE OF THE PREVIOUS FINANCIAL YEAR

Pursuant to the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the following persons formed part of the Senior Management of the Company during the financial year under review:

Name	Designation
Mr. Shekhar Setty	General Manager - Plant Operations
Mr. Madhukar Suvarna	Chief Financial Officer
Mr. Manoj Kumar	Company Secretary and Compliance Officer

During the financial year under review, Mr. Madhukar Suvarna was appointed as Chief Financial Officer with effect from August 27, 2025, and consequently formed part of the Senior Management of the Company.

Subsequent to the close of the financial year, Mr. Manoj Kumar, Company Secretary and Compliance Officer, tendered his resignation and will cease to hold office with effect from the close of business hours on August 31,2026.

Subsequent to the close of the financial year, Mr. Shrikant Kabra was appointed as Company Secretary and Compliance Officer with effect from September 3, 2026

There were no other material changes in the Senior Management of the Company since the close of the previous financial year, except as stated above.

22. CORPORATE SOCIAL RESPONSIBILITY POLICY

The provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility were not applicable to the Company during the financial year 2025-26, as the Company did not meet any of the prescribed thresholds specified under Section 135(1) of the Act during the immediately preceding financial year.

Accordingly, the provisions relating to constitution of the CSR Committee, formulation of CSR Policy and CSR expenditure were not applicable to the Company during the financial year under review.

23. AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

a. STATUTORY AUDITOR & AUDIT REPORT FOR THE YEAR ENDED MARCH 31,2026

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. S R Rahalkar & Associates (Firm registration No: 108283W), Chartered Accountants, the Statutory Auditors of the Company have been appointed for a term of 5 (Five) years and they will continue to be the Statutory Auditors of the Company until the conclusion of Annual General Meeting to be held in the Financial Year 2028-29.

The Statutory Auditor has, in its report on Internal Financial Controls over Financial Reporting, identified certain areas requiring improvement in the Companys internal financial control processes relating to recording and accounting of material consumption and related SAP ledger entries. The Management has taken note of the observation and has initiated appropriate corrective measures to strengthen the relevant controls and review mechanisms. The Audit Committee and the Board will continue to monitor the implementation of the corrective measures.

b. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED MARCH 31,2026

The observations / qualifications / disclaimers made by the Statutory Auditors in their report for the financial year ended March 31,2026, read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

c. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED MARCH 31,2026

Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. The Board has appointed M/s Prajot Vaidya & Co., Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for the financial year 2025-26.

The secretarial audit report issued by M/s Prajot Vaidya & Co., Practicing Company Secretaries, in Form MR-3 for the financial year 2025-26, forms part of the Directors Report as “ANNEXURE IV”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer requiring explanation.

d. INTERNAL AUDITOR

M/s Yatin & Associates, Chartered Accountants (FRN: 112100W) were appointed as the Internal Auditor of the Company for the financial year 2025-26 based on the recommendation of the Audit Committee of the Company.

e. MAINTENANCE OF COST RECORDS

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the requirement for maintenance of cost records is not applicable under said Rules.

f. REPORTING OF FRAUDS BY STATUTORY AUDITORS UNDER SECTION 143(12)

There were no incidences of reporting of frauds by Statutory Auditors of the Company under Section 143(12) of the Act read with Companies (Accounts) Rules, 2014.

24. INSURANCE

All the insurable interests of your Company including properties, equipment, stocks etc. are adequately insured by the Company.

25. INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the financial year under review, the Company maintained a robust and stable financial position, with no applications initiated or proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016). This reflects the Company’s steadfast commitment to prudent financial management, operational resilience, and adherence to its obligations, ensuring that no circumstances arose necessitating recourse to the provisions of the aforementioned Code.

Furthermore, no such proceedings were brought before the National Company Law Tribunal or any other judicial or quasi-judicial authorities during this period. The absence of such applications or proceedings underscores the Company’s strong governance framework and its ability to navigate the financial landscape effectively, fostering confidence among stakeholders regarding its fiscal health and sustainability.

26. ONETIME SETTLEMENT AND VALUATION

During the year under review, the Company did not enter into any one-time settlement agreements with any banks or financial institutions, and consequently, no valuation was conducted for such purposes. Similarly, no valuation was required or performed in relation to loans obtained from banks or financial institutions. Hence, there are no differences to report between valuations done at the time of one-time settlement and those done while availing loans, as no such activities occurred during the year.

27. OTHER DISCLOSURES

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. DISCLOSURE OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

No orders have been passed by any Regulator or Court or T ribunal which could have an impact on the going concern status and the Company’s operations in future.

b. DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, and based on the audited financial statements of the Company for the financial year ended March 31, 2026, the Board of Directors hereby confirms that:

I. in the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures, wherever applicable;

II. such accounting policies have been selected and applied consistently, and the Directors have 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 as at March 31, 2026, and of the loss of the Company for the year ended on that date;

III. proper and sufficient care has been taken 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 fraud and other irregularities;

IV. the annual accounts have been prepared on a going concern basis;

V. the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

VI. proper systems have been devised to ensure compliance with the provisions of all applicable laws, and such systems are adequate and operating effectively.;

VII. Observations of Statutory Auditors- The Statutory Auditors have drawn attention, by way of an Emphasis of Matter, to the material uncertainty relating to going concern arising from accumulated losses and erosion of net worth and the excess of current liabilities over current assets. The Management has represented that the Company has confirmed orders in hand which are expected to generate substantial cash flows and improve the financial position in the coming periods. The Board has considered the managements assessment and the financial projections and is of the view that the Company will be able to continue its operations and meet its obligations as they fall due

c. CORPORATE GOVERNANCE

Since the equity shares of the Company are listed on the SME Exchange, the corporate governance provisions specified under Regulations 17, 17A, 18, 19, 20, 21, 22, 24, 24A, 25, 26, 26A and 27 and clauses (b) to (i) and (t) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are not applicable to the Company pursuant to Regulation 15(2)(b) thereof.

However, Regulation 23 relating to Related Party Transactions is applicable to the Company with effect from April 1, 2025, and the Company has complied with the applicable requirements thereof.

d. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

e. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

f. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013

The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

g. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013

During the year under review, the Company did not have any scheme involving the purchase of its shares by employees pursuant to the provisions of Section 67(3) of the Companies Act, 2013, read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014. Accordingly, no disclosure is required in this regard.

h. HUMAN RESOURCES

Your Company considers its human resources to be one of its most valuable assets and continues to focus on attracting, retaining, developing, and nurturing talent. The Company endeavours to promote the professional growth and development of its employees through appropriate learning and development initiatives, job rotation, skill enhancement, and job enlargement opportunities.

As on March 31, 2026, the Company had a total workforce of 83 employees, comprising 6 female employees and 77 male employees.

The Company is committed to providing a safe, healthy, inclusive, and conducive working environment for all its employees. Appropriate policies and practices have been adopted and implemented in accordance with the applicable provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable laws, with the objective of safeguarding the interests, rights, and well-being of its employees.

The Board places on record its appreciation for the dedication, commitment, and valuable contribution made by all employees towards the growth and progress of the Company.

i. PARTICULARS OF REMUNERATION TO EMPLOYEES

The particulars of remuneration to directors and employees and other related information required to be disclosed under Section 197 (12) and sub rule 1 of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Companies Act, 2013 and the Rules made thereunder are given in “ANNEXURE V” to this Report.

Further the Company has no employee who is in receipt of remuneration of INR. 8,50,000/- per month or INR 1,02,00,000/- per annum and hence the Company is not required to give information under sub-rule (2) and 3 of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The details for the top ten employees of the Company are also mentioned in “ANNEXURE V” to this report.

j. POLICY ON SEXUAL HARASSMENT AT WORKPLACE

The Company has established an Internal Complaints Committee as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company is committed to create and maintain an atmosphere in which employees can work together without fear of sexual harassment and exploitation. Every employee is made aware that the Company is strongly opposed to sexual harassment and that such behavior is prohibited both by law and the Company. During the year under review, there were no complaints received of any sexual harassment at workplace.

Particulars	No. of Complaints
Complaints as on April 1,2025	NIL
Complaints filed during Financial Year 2025-26	NIL
Complaints disposed-off during Financial Year 2025-26	NIL
Complaints pending for a period exceeding Ninety Days.	NIL
Complaints pending as on March 31,2026	NIL

k. MATERNITY BENEFIT COMPLIANCE:

The Company reaffirms its unwavering commitment to the health, dignity, and well-being of its women employees by ensuring full compliance with the provisions of the Maternity Benefit Act, 1961 and the rules framed thereunder.

In line with the statutory framework, the Company provides all eligible women employees with maternity leave benefits, including paid leave, job protection, and continued access to applicable medical and other statutory entitlements. These benefits are extended with the objective of supporting women during a crucial phase of life and ensuring a smooth transition between personal responsibilities and professional commitments. Further, the Company has adopted a proactive approach to build a gender-sensitive and inclusive workplace, going beyond mere statutory requirements. Adequate internal policies are in place to create awareness, sensitize teams, and ensure timely redressal of any concerns related to maternity entitlements. Periodic reviews are also undertaken to ensure strict adherence to the law and promote a culture of empathy and support. The Board places on record its assurance that the Company has maintained a compliant and supportive environment in accordance with the spirit and intent of the Maternity Benefit Act, and will continue to enhance employee-centric practices that promote diversity, equity, and inclusion across the organization.

l. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014

The disclosures relating to remuneration of Directors, Key Managerial Personnel and employees of the Company, as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, have been marked as “ANNEXURE V” to this Director’s Report.

m. DISCLOSURE PURSUANT TO PART II, SECTION II OF SCHEDULE V OF THE COMPANIES ACT, 2013

Particulars		Details
Name of Person & Designation to whom Remuneration is paid as per Section II of Schedule V	Anil Suryavanshi (Whole-time Director) *	Sunil Haripant Pophale (Executive Director)	Meena Sunil Pophale (Whole-time Director)
All elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors	1. Salary exclusive of all allowances Rs. 2,31,550/- per month. The Whole time Director shall be entitled to such increment from time to time as the Board may by its discretion determine.	1. Salary Inclusive of all allowances: Rs. 50,000/- per month (inclusive of Salary, perquisites, benefits and allowances),	1. Salary exclusive of all allowances Rs. 49,247/- per month. The Executive Director shall be entitled to such increment from time to time as the Board may by its discretion determine
	2. Perquisites and allowances in addition to salary		2. Perquisites and allowances in addition to salary
	A. House Rent Allowance: The Company will pay House Rent Allowance of Rs. 46,310/- per month.		House Rent Allowance: The Company will pay House Rent Allowance of Rs. 9,849/- per month to the Executive director.
	B. Conveyance Allowance: The Company will pay Conveyance Allowance of Rs. 35,000/- per month.		Conveyance Allowance: The Company will pay Conveyance Allowance of Rs. 35,000/- per month to the Executive director.
	C. Children Education Allowance: The Company will pay Children Education Allowance of Rs. 200/- per month		Children Education Allowance: The Company will pay Children Education Allowance of Rs. 200/- per month to the Executive director
	D. Transport Allowance:		Transport Allowance:
	The Company will pay Transport Allowance of Rs. 1,600/- per month.		The Company will pay Transport Allowance of Rs. 1,600/- per month to the Executive director.
	E. Medical Allowance:		Medical Allowance:
	The Company will pay Medical Allowance of Rs. 19,296/-		The Company will pay Medical Allowance of Rs. 4,104/- to the Executive director.
	Any other benefits, facilities, allowance and expenses as may be allowed under Company rules/schemes.		Any other benefits, facilities, allowance and expenses as may be allowed under Company rules/schemes.
	Perquisites shall be evaluated as per Income Tax Rule wherever applicable and in the absence of any such rule, Perquisites shall be evaluated at actual cost.		Perquisites shall be evaluated as per Income Tax Rule wherever applicable and in the absence of any such rule, Perquisites shall be evaluated at actual cost.
Details of fixed component and performance linked incentives along with the performance criteria	Fixed Component: 3,33,956/-	Fixed Component: Rs. 50,000/- per month (inclusive of Salary, perquisites, benefits and allowances),	Fixed Component: Rs. 1,00,000 Per month.
	Performance linked incentives: There is no such criteria formulated by the Company.	Performance linked incentives: There is no such criteria formulated by the Company.	Performance linked incentives: There is no such criteria formulated by the Company.
Service contracts, notice period, severance fees	As per the Company’s Policy	As per the Company’s Policy	As per the Company’s Policy
Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable	N/A	N/A	N/A

Mr. Anil Survavanshi resigned from the post of whole time director of company with effect from 09th June 2025.

28. DISCLOSURE OF PROCEEDINGS PENDING OR APPLICATION MADE UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

No application was filed for corporate insolvency resolution process, by a financial or operational creditor or by the company itself under the IBC before the NCLT.

29. DISCLOSURE OF REASON FOR DIFFERENCE BETWEEN VALUATION DONE AT THE TIME OF TAKING LOAN FROM BANK AND AT THE TIME OF ONE TIME SETTLEMENT

There were no instance of onetime settlement with any Bank or Financial Institution.

30. DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES

The Company has not made any disclosure under clause 5A of paragraph A of Part A of Schedule III of these regulations.

31. ACKNOWLEDGEMENTS AND APPRECIATION

Your directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

For and on behalf of the Board

Vadivarhe Speciality Chemicals Limited
SD/-	SD/-
Sunil Haripant Pophale	Meena Sunil Pophale
Director	Whole-time Director
DIN: 00064412	DIN:00834085
Date: 03.09.2026
Place: Mumbai