Shanti Inorganics Ltd. ನಿರ್ದೇಶಕರ ವರದಿ

Your directors have pleasure in presenting the Director’s Report of your Company together with the Audited Statement of Accounts and the Auditors’ Report of your company for the financial year ended 31^st March, 2026.

1. FINANCIAL HIGHLIGHTS

___(Rs. In Lakhs)

2. OVERVIEW OF COMPANY’S PERFORMANCE

During the year under review, the Company recorded a total income of Rs. 7,293.38 lakhs, as compared to Rs. 5,847.91 lakhs in the previous year, registering a growth of 24.72%.

The Profit Before Tax (PBT) for the year increased to Rs. 1,382.44 lakhs, as against Rs. 1,105.88 lakhs in the previous year, reflecting an increase of 25.01%.

The Profit After Tax (PAT) for the year increased to Rs. 1,025.29 lakhs, compared to Rs. 828.15 lakhs in the previous year, representing a growth of 23.81%.

The continued improvement in the Company''s financial performance reflects sustained growth in operations, improved business efficiencies, and prudent financial management during the year.

The following changes in the capital structure of the Company took place during the year under review:

I. Increase in Authorised Share Capital

Pursuant to the approval of the Members at the Extraordinary General Meeting held on 17^th June, 2025, the authorised share capital of the Company was increased from Rs. 75,00,000 (Rupees Seventy-Five Lakh Only), comprising 7,50,000 (Seven Lakh Fifty Thousand) equity shares of Rs. 10 (Rupees Ten) each, to Rs. 17,00,00,000 (Rupees Seventeen Crore Only), comprising 1,70,00,000 (One Crore Seventy Lakh) equity shares of Rs. 10 (Rupees Ten) each.

II. Issue of Bonus Shares

Pursuant to the approval of the Members at the Extraordinary General Meeting held on 22^nd August, 2025, the Company issued Bonus Shares in the ratio of 15 (Fifteen) equity shares for every 1 (One) equity share held by the existing shareholders. Accordingly, 95,40,000 (Ninety-Five Lakh Forty Thousand) equity shares of Rs. 10 (Rupees Ten) each were allotted, resulting in an increase in the issued, subscribed and paid-up equity share capital from 6,36,000 (Six Lakh Thirty-Six Thousand) equity shares to 1,01,76,000 (One Crore One Lakh Seventy-Six Thousand) equity shares of Rs. 10 (Rupees Ten) each.

III. Preferential Allotment of Equity Shares

Pursuant to the approval of the Members at the Extraordinary General Meeting held on 27^th August, 2025, the Company approved the issue of equity shares on a preferential basis. Subsequently, the Board of Directors, at its meeting held on 17^th September, 2025, allotted 13,80,200 (Thirteen Lakh Eighty Thousand Two Hundred) equity shares to 12 (Twelve) allottees at an issue price of Rs. 90 (Rupees Ninety) per equity share (comprising a face value of Rs. 10 (Rupees Ten) per equity share and a securities premium of Rs. 80 (Rupees Eighty) per equity share). Consequently, the issued, subscribed and paid-up equity share capital increased from 1,01,76,000 (One Crore One Lakh Seventy-Six Thousand) equity shares to 1,15,56,200 (One Crore Fifteen Lakh Fifty-Six Thousand Two Hundred) equity shares of Rs. 10 (Rupees Ten) each.

As at the end of the financial year, the paid-up equity share capital of the Company stood at Rs. 11,55,62,000 (Rupees Eleven Crore Fifty-Five Lakh Sixty-Two Thousand Only), comprising 1,15,56,200 (One Crore Fifteen Lakh Fifty-Six Thousand Two Hundred) equity shares of Rs. 10 (Rupees Ten) each.

4. TRANSFER TO RESERVE

The board of directors of your company has decided not to transfer any amount to the Reserves for the financial year under review.

5. DIVIDEND

The board of directors of your company do not recommend any dividend for the year ended 31^st March, 2026.

6. WEB LINK OF ANNUAL RETURN

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the company is available on the website of the company at the link: https://shantiinorganics.com/investor/.

The board of directors has constituted the following committees and the details pertaining to such committees are included in this annual report,

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders’ Relationship Committee

AUDIT COMMITTEE:

The Board of Directors, at its meeting held on 4^th September, 2025, constituted the Audit Committee in accordance with the provisions of Section 177 of the Companies Act, 2013. The Audit Committee is entrusted with the responsibility of overseeing the Company''s financial reporting process, reviewing the adequacy and effectiveness of internal financial controls, and ensuring that financial statements are accurate, transparent, and compliant with the applicable statutory and regulatory requirements. The Committee also plays a vital role in upholding high standards of corporate governance and enhancing stakeholders'' confidence in the integrity of the Company''s financial reporting.

The Committee is also responsible for reviewing internal audit reports and action taken thereon, as well as evaluating the effectiveness of internal control systems. Additionally, it monitors compliance with legal and statutory requirements, reviews related party transactions, and recommends the appointment of the statutory auditor to the Board.

During the year under review, three Audit Committee meetings were held on 20/09/2025, 26/09/2025 and on 15/01/2026.

NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors, at its meeting held on 4^th September, 2025, constituted the Nomination and Remuneration Committee in accordance with the provisions of Section 178 of the Companies Act, 2013.

The terms of reference of the Committee, inter alia, include the following:

(a) formulation of policy for determining qualification, positive attributes and independence of a director and remuneration for the directors, key managerial personnel and other employees and recommend the same to the board and

(b) Identification of persons who are qualified to become directors and who may be appointed in senior management cadre in accordance with the criteria as per the policy approved by the board.

The Company''s policy is to remain competitive within the industry by attracting and retaining the best talent and appropriately rewarding executives based on their individual performance and contribution to the Company''s overall business objectives.

During the financial year 2025-26, one meeting of Nomination and Remuneration Committee was held on 15/01/2026.

STAKEHOLDERS’ RELATIONSHIP COMMITTEE:

The Board of Directors, at its meeting held on 4^th September, 2025, constituted the Stakeholders'' Relationship Committee in accordance with the provisions of Section 178 of the Companies Act, 2013.

The Committee is entrusted with the responsibility of considering and resolving the grievances of shareholders, investors and other security holders of the Company. It also oversees matters relating to the transfer and transmission of securities, issue of duplicate share certificates, and other stakeholder-related matters, with the objective of ensuring effective investor services and strengthening stakeholder relations.

During the financial year 2025-26, one meeting of Stakeholders’ Relationship Committee was held on 15/01/2026.

10. DETAILS IN RESPECT OF FRAUD

During the year under review, the Statutory Auditor in their report have not reported any instances of frauds committed in the Company by its Officers or Employees under section 143(12) of the Companies Act, 2013.

11. BOARD’S COMMENT ON THE AUDITORS’ REPORT

The observations of the Statutory Auditors, when read together with the relevant notes to the accounts and accounting policies are self-explanatory and do not call for any further comment.

12. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments, which affect 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.

There is no change in the Key Managerial Personal of the company during the period under review.

14. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

During the year under review, the Company filed a suo moto application under Section 454 of the Companies Act, 2013 for the non-compliance of Section 203(3) of the Companies Act, 2013. Pursuant thereto, the Registrar of Companies, Gujarat, vide its order dated 13 ^th August, 2025, imposed a penalty of Rs. 5,00,000 on the Company and Rs. 90,000 each on Mr. Avnish M. Patel, Joint Managing Director, Mr. Manojkumar J. Patel, Managing Director, Mrs. Suhani A. Patel, Director, and Mr. Kalpeshbhai A. Raval, Chief Financial Officer. The Company and the concerned officers have duly complied with the said order, and the matter stands closed.

Except as stated above, no significant or material orders were passed by any regulator, court, or tribunal during the financial year which could impact the going concern status of the Company or its future operations.

15. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All related party transactions entered into by the Company during the financial year were in the ordinary course of business and on an arm''s length basis.

In accordance with the provisions of Section 188 of the Companies Act, 2013 and the rules made thereunder, the particulars of the related party contracts and arrangements are disclosed in Form AOC-2, annexed to this Notice as Annexure I.

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

Pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013, the information relating to conservation of energy, technology absorption, and foreign exchange earnings and outgo is annexed to this notice as Annexure II.

17. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business of the Company.

18. CHANGE IN THE REGISTERED OFFICE

There was no change in the registered office of the Company during the year under review.

19. COMPLIANCE WITH SECRETARIAL STANDARD

The Company has complied with the applicable Secretarial Standards (as amended from time to time) on meetings of the Board of Directors and Meeting of Shareholders (EGM/AGM) i.e. SS-1 and SS-2 issued by The Institute of Company Secretaries of India and approved by Central Government under section 118(10) of the Companies Act, 2013.

20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT

Pursuant to Section 134(3)(g) of the Companies Act, 2013, the Board of Directors hereby confirms that the Company has not made any loans, given any guarantees, or made any investments under the provisions of Section 186 of the Companies Act, 2013 during the financial year ended 31^st March, 2026.

21. RISK MANAGEMENT POLICY

The provisions relating to the Risk Management Policy are not applicable to the Company. However, the Board periodically reviews the risks associated with the Company''s business and takes necessary steps to manage and mitigate such risks.

22. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE [“POSH”]

The Company has adopted a policy for prevention of sexual harassment at the workplace, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”). An Internal Complaints Committee (“ICC”) has been duly constituted as per the provisions of the POSH Act to redress complaints regarding sexual harassment at the workplace.

During the financial year under review, the Company has complied with all the provisions of the POSH Act and the rules framed thereunder. Further details are as follow:

23. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANIES

As on 31^st March, 2026, the Company has no Subsidiaries / Joint ventures / Associate Companies.

24. INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements. During the financial year, such controls were tested and no reportable material weakness in the design or operation was observed.

25. CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility (CSR) are applicable to the Company. The details of the Company''s CSR initiatives and activities, as required under the Act and the rules made thereunder, are set out in Annexure III forming part of this Report.

26. AUDITOR

The Members of the Company, at the 14^th Annual General Meeting, appointed M/s. S. N. Shah & Associates, Chartered Accountants, Ahmedabad (Firm Registration No. 109782W), as the Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the 14^th Annual General Meeting until the conclusion of the 19^th Annual General Meeting, in accordance with the provisions of the Companies Act, 2013.

27. SECRETARIAL AUDIT REPORT

The provisions of Section 204 of the Companies Act, 2013 relating to the appointment of a Secretarial Auditor are not applicable to the Company during the year under review. Accordingly, the Company was not required to appoint a Secretarial Auditor for conducting the Secretarial Audit.

28. DIRECTOR’S RESPONSIBILITY STATEMENT

The Directors would like to inform the Members that the Audited Accounts for the financial year ended 31^st March, 2026, are in full conformity with the requirement of the Companies Act, 2013. The Financial Accounts are audited by the statutory auditors of the company M/s. S N Shah & Associates, Chartered Accountants. The Directors further confirm that: -

a. In the preparation of the annual accounts for the year ended 31^st March, 2026 the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same.

b. The Directors have 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 as at 31^st March, 2026 and of the profit of the Company for the year ended on that date.

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. The Directors have prepared the annual accounts on a ''going concern'' basis.

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

f. 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.

29. DEPOSITS

During the financial year under review, the Company did not accept any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the rules made thereunder. However, the Company accepted unsecured loans from its Directors, the details of which are disclosed in the Financial Statements.

30. COST RECORD

The provisions of Section 148(1) of the Companies Act, 2013 relating to the maintenance of cost records are not applicable to the Company. Accordingly, the Company is not required to maintain cost records or comply with the provisions prescribed thereunder.

31. STATEMENT ON DECLARATION FROM INDEPENDENT DIRECTORS

The Company has received necessary declarations from all Independent Directors of the Company in accordance with the provisions of Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013.

32. ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to the provisions of section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its powers) Rules, 2014, the Company has adopted Whistle Blower Policy/Vigil Mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Code of Conduct. It also provides for adequate safeguards against victimization of directors /employees who avail the Mechanism.

The Company affirms the access to the Audit Committee. To ensure the effective functioning of the Vigil Mechanism, the Audit Committee of the Company reviews and takes note of the same from time to time, as deemed appropriate. During the year the company has not received any complaint regarding the same.

33. FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES & INDIVIDUAL DIRECTORS

The Board of Directors have evaluated the performance of all Independent Directors, NonIndependent Directors and its Committees. The Board deliberated on various evaluation attributes for all directors and after due deliberations made an objective assessment and evaluated that all the directors in the Board have adequate expertise drawn from diverse industries and business and bring specific competencies relevant to the Company’s business and operations. The Board found that the performance of all the Directors was quite satisfactory.

The Board also noted that the term of reference and composition of the Committees was clearly defined. The Committee performed their duties diligently and contributed effectively to the decisions of the Board.

The functioning of the Board and its committees were quite effective. The Board evaluated its performance as a whole and was satisfied with its performance and composition of Independent and Non-Independent Directors.

34. INITIAL PUBLIC OFFER (IPO)

During the year under review, the Members of the Company, at their Extraordinary General Meeting held on 16^th September, 2025, approved the proposal for the Initial Public Offering (IPO) of the Company.

Pursuant to the said approval, the Company filed the Draft Red Herring Prospectus (DRHP) with the National Stock Exchange of India Limited on 26^th September, 2025 for the proposed listing of its equity shares on the NSE EMERGE platform. Thereafter, the Company received the in-principle approval from the National Stock Exchange of India Limited on 18^th December, 2025.

The Company is currently undertaking the necessary steps and complying with the applicable regulatory and procedural requirements for the proposed listing of its equity shares on the NSE EMERGE platform.

35. PARTICULARS OF EMPLOYEES

There are no employees who are in receipt of remuneration in excess of limits as prescribed under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence no such information is required to be given.

36. INSURANCE

All the properties and insurable interests of the company including buildings, plant and machinery, stocks etc. are adequately insured.

37. PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

No application has been made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

38. DIFFERENCE IN VALUATION

The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

39. MATERNITY BENEFIT

During the year under review, the Company did not receive any applications from women employees seeking benefits under the Maternity Benefit Act, 1961. The Company affirms that it has duly complied with, and will continue to comply with, all provisions of the Maternity Benefit Act, 1961.

40. GENDER WISE COMPOSITION OF EMPLOYEES

In alignment with the principle of diversity, equity, and inclusion (DEI), the company discloses below the gender composition of its workforce as on 31^st March, 2026:

Male Employee: 57 Female Employee: 04

This disclosure reinforces the company’s efforts to promote an inclusive workplace culture and equal opportunity for all individuals, regardless of gender.

41. ACKNOWLEDGMENT

Your directors wish to express their grateful appreciation to the continued co-operation received from the Banks, Government Authorities, Customers, Vendors and Shareholders during the year under review. Your directors also wish to place on record their deep sense of appreciation for the committed service of the executives, staff and workers of the Company.