13. Provisions and Contingent Liabilities

The Company recognizes a provision when there is a present obligation as a result of past event that
probably requires an out flow of resources and a reliable estimate can be made of the amount of
obligation. A disclosure for a Contingent Liability is made when there is a possible obligation from a past
event but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the company

14. Revenue Recognition

In accordance with Ind AS 115 “Revenue from Contracts with customers”, Revenue from contracts with
customers is recognized on transfer of control of promised goods or services to a customer at an amount
that reflects the consideration to which the Company is expected to be entitled to in exchange for those
goods or services.

(i) Sale of Goods

Revenue from the sale of goods is recognized when the Company satisfies the performance
obligation in accordance with the provisions of contract with customer. This is achieved when
control of the product has been transferred to the customer, which is generally determined when
title, ownership, risk of obsolesce and loss pass to the customer and Company has present right to
payment. The Company collects goods and services tax (GST) on behalf of the government and,
therefore, these are not economic benefits flowing to the Company. Hence, they are excluded
from revenue.

(ii) Interest Income

Interest Income is recognized based on time proportion basis considering the amount
outstanding and the rate applicable. Interest Income is included in the Other Income in the
statement of Profit and Loss.

15. Income Tax

(i) Current Income Tax

Current Income Tax is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961.

(ii) Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences between the
tax bases of assets and liabilities and their carrying amount for the financial reporting purposes
at the reporting date. Deferred Tax assets are recognized to the extent that it is probable that
taxable profit will be available

against which the deductible temporary differences and the carry forward of unused tax credits
and unused tax losses can be utilized. Current and deferred tax is recognized in the statement of
Profit and Loss, except to the extent that it relates to the items recognized in the other
comprehensive income or directly in equity.

16. Employee benefits

The present value of the defined benefit obligations depends on a number of factors that are determined
on a n actuarial basis using a number of assumptions

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related
service are recognized in respect of employee''s services upto the end of reporting and are
measured at the amounts expected to be paid when the liabilities are settled.

(ii) Long term obligations

The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12
months are measured at the present value of expected future payments to be made in respect of
services made by employees upto the end of the reporting period. The benefits are discounted
using the government securities at the end of reporting period.

(iii) Post employment obligations - Gratuity

The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans
is the present value of the defined benefit obligation at the end of the reporting period less the
fair value of the plan assets. The present value of the obligation is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period
on government bonds that have the term approximating to the terms of the related obligations.

17. Earnings per Share

Basic earnings per share are computed by dividing the profit for the year attributable to the equity
shareholders for the year by the weighted average number of shares outstanding during the year.

18. Cash Flow

The investing and financing activities in cash flow statement do not have a direct impact on current cash
flows although they do affect the capital and asset structure of an entity. The company has disclosed these
transactions, to the extent, material in notes to cash flow statement.

19. Segment Reporting

The Company has identified that its operating activity is a single primary business segment. Accordingly,
whole of India has been considered as one geographical segment. Hence, segment reporting is not
applicable.

20. Foreign Currencies

Transactions in foreign currencies are initially recorded by the Company at the functional currency spot
rates (i.e. INR) at the date the transaction first qualifies for recognition. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rates of exchange at the
reporting date.

Foreign exchange gains and losses resulting from the settlement of transactions in foreign currencies and
from the translation of monetary assets and liabilities denominated in foreign currencies at year end
exchange rates are generally recognized in Statement of Profit and Loss.

21. Research and Development

Research and Development expenditures of revenue nature are charged to Profit & Loss Account, while
capital expenditure is added to the cost of fixed assets in the year in which these are incurred.

22. Lease

a. Where the Company is the lessee

The company recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the
lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses,
if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, company''s incremental borrowing rate.

Generally, the company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following: Fixed
payments, including in-substance fixed payments;

Variable lease payments that depend on an index or a rate, initially measured using the index or rate
as at the commencement date;

Amounts expected to be payable under a residual value guarantee; and

The exercise price under a purchase option that the company is reasonably certain to exercise, lease
payments in an optional renewal period if the company is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the company is reasonably certain not to
terminate early.

Short-term leases and leases of low-value assets

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of
real estate properties that have a lease term of 12 months. The company recognises the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.

b. Where the Company is the lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the statement
of profit and loss on a straight-line basis over the lease term. Costs, including depreciation are recognised
as an expense in the statement of Profit &Loss. Initial direct costs such as legal costs, brokerage costs, etc.
are recognised immediately in the statement of Profit &Loss.

Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment
in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return
on the net investment in the lease. Initial direct costs relating to assets given on finance leases are charged
to Statement of Profit and Loss.

23. Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker (CODM). The CODM who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of the Company.

24. Standard notified but not yet effective:

There are no new standards that are notified but not yet effective up to the date of issuance of the
company''s financial statement.

25. New and amended standards

The Ministry of Corporate Affairs (MCA) has noticed Companies (Indian Accounting Standards) Rules, 2024
to amend the following Ind AS which are effective for annual periods beginning on or after April 1, 2025. The

Company has not early adopted any standard, interpretation or amendment that has been issued but is not
yet effective.

(i) Amendments to Ind AS 21 - Lack of exchangeability

The Ministry of Corporate Affairs (MCA) noticed the Companies (Indian Accounting Standards) Amendment
Rules, 2025, which amend Ind AS 21, The Effects of Changes in Foreign Exchange Rates to specify how an
entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate
when exchangeability is lacking. The amendments also require disclosure of information that enables users
of its financial statements to understand how the currency not being exchangeable into the other currency
affects, or is expected to affect, the entity''s financial performance, financial position and cash flows. The
amendments are effective for annual reporting periods beginning on or after 1 April 2025. When applying the
amendments, an entity cannot restate comparative information.

(ii) Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current Liabilities
with Covenants

In August 2025, the MCA noticed amendments to paragraphs 69 to 76 of Ind AS 1 to specify the requirements
for classifying liabilities as current or non-current. The amendments clarify:

What is meant by a right to defer settlement That a right to defer must exist at the end of the reporting period
That classification is unaffected by the likelihood that an entity will exercise its deferral right That only if an
embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not
impact its classification

In addition, a requirement has been introduced to require disclosure when a liability arising from a loan
agreement is classified as non-current and the entity''s right to defer settlement is contingent on compliance
with future covenants within twelve months.

If there is a breach of a material covenant of a long term loan arrangement on or before the end of the reporting
period, resulting in the liability becoming payable on demand as at the reporting date, and the lender agrees—
after the reporting period but before the financial statements are approved for issue—not to demand
repayment for at least 12 months as a consequence of the breach, this shall be treated as an adjusting event.
Accordingly, the entity is not required to classify the liability as current.

The amendments are effective for annual reporting periods beginning on or after 1 April 2025 retrospectively
in accordance with Ind AS 8.

(iii) Amendments to Ind AS 7 and Ind AS 107 - Supplier Finance Arrangements

In August 2025, the MCA noticed amendments to Ind AS 7 Statement of Cash flows and Ind AS 107 Financial
Instruments: Disclosures to clarify the characteristics of supplier finance arrangements and require additional
disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users
of financial statements in understanding the effects of supplier nance arrangements on an entity''s liabilities,
cash flows and exposure to liquidity risk.

(iv) International Tax Reform—Pillar Two Model Rules - Amendments to Ind AS 12

In August 2025, the MCA noticed amendments to Ind AS 12 Income Taxes in response to the OECD''s BEPS
Pillar Two rules and include:

A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two model rules; and

Disclosure requirements for affected entities to help users of the financial statements better understand an
entity''s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date.
The mandatory temporary exception - the use of which is required to be disclosed - applies immediately. The
remaining disclosure requirements apply for annual reporting periods beginning on or after 1 April 2025, but
not for any interim periods ending on or before 31 March 2026.

The above amendments do not have any impact on the Company''s standalone financial statements.

Rights, preferences and restrictions attached to shares both Equity Shares & Preference Shares

Equity Shares: The company has one class of equity shares having a par value of Rs.10/-per share. Each
shareholder is eligible for one vote per share held and rank pari passu. The dividend proposed by the Board
of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in
case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the
remaining assets of the Company after distribution of all preferential amounts, in proportion to their
shareholding.

⁽¹⁾ EMI amounting to Rs 35033/-per instalments of Car payable in 60 instalments of which 50 instalments
has been paid.

⁽¹⁾ EMI amounting to Rs 42581/-per instalments of Car payable in 60 instalments of which 58 instalments
has been paid.

⁽¹⁾ EMI amounting to Rs 65500/-per instalments of Car payable in 36 instalments of which 5 instalments
has been paid.

⁽¹⁾ EMI amounting to Rs 29000/-per instalments of Car payable in 39 instalments of which 9 instalments
has been paid.

⁽¹⁾ EMI amounting to Rs 129686/-per instalment per truck for 5 trucks payable in 58 instalments of which
32 instalments have been paid.

Secured by Hypothecation of Raw Material, Work in Progress, Finished Goods, Consumable Spares,
Book Debts, Common Collateral immovable property, Plant & Machinery at Rampur (Budge Budge),
Personal Guarantee of Ajay Kurmar Mimani, Mukesh Mundhra, Vijay Mimani, Suraj Ratan Mundhra. and
Exclusive charges on FD of Rs 22.10 Cr. along with accrued interest thereon.

Note 29 Related Party Transactions

Disclosure of related party transactions in terms of Ind AS 24 is given below.

(i) Key Managerial Personnel

(a) Name of the related parties with relationship:

i) Mr. Suraj Ratan Mundhra, Director - Key Management Personnel

ii) Mr. Mukesh Mundhra, Director - Key Management Personnel

Defined Contribution Plans

Provident Fund for certain eligible employees is administered by the Company through Employees Provident
Fund as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952.

The amount contributed is recognized as an expense and included in “Company''s contributions to PF & other
funds” of Statement of Profit and Loss account is Rs.78.29 lakhs (LY Rs.57.18lakhs).

Notes

a) The Estimates of future salary increases, considered in actuarial valuation takes account of inflation,
seniority, promotion and other relevant factors such as supply and demand in employment market.

(b) Discount rate is based upon the market yields available on Government Bonds at the accounting date with
that of liabilities.

Note 31

Disclosure of under the Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received full information from vendors regarding their status under Micro, Small and
Medium Enterprises Development Act, 2006 (MSMED ACT); hence disclosure relating to amount unpaid at
year end together with interest paid/payable have been given based on the information so far available
with the Company / identified by the Company management. The detail of the same is as under.

a) Claims against the company not acknowledged as debt (In lakhs):

• Demand under Central Excise act, 1944 and Finance act, 1944 for the period from 2013-14, against which
appeal was filed before Tribunal appeal- Rs. 18.70 lakhs.

• Demand under Central Excise act, 1944 and Finance act, 1944 for the period from 2003-04 to 2006-07, against
which appeal was filed before Commissioner appeal- Rs. 02.36 lakhs.

• Demand under Central Excise act, 1944 and Finance act, 1944 for the period from 2007-08, against which
appeal was filed before Commissioner appeal- Rs. 91.75 lakhs.

. Demand under Cenvat credit Rule of the Central Goods and Services Act 2017, for the period of 2011-12 to
2015-16, against which the appeal was filed before the Commissioner appeal- Rs. 52.47 lakhs.

. In Income tax, an appeal has been filed by the department against relief granted by Income tax Appellate
Tribunal which is pending in High Court for the A.Y. 2010-11 OF Rs. 17.00 lakhs.

. The position of both the units (Hid Road & Budge Budge) has been handed over back to KOPT along with
the stocks which are having recoverable value more than the rent payable, since the matter is sub judice we have
ignored the value of recoverable from the company has provided for rent payable

. On account of bank guarantee Rs.188.00 lakhs respectively.

b) Capital and other commitments: Rs. Nil (Previous Year - Rs. Nil)

Note 36 Capital Management

The Company''s objective when managing capital (defined as net debt and equity) are to safeguard the
Company''s ability to continue as a going concern in order to provide returns to shareholders and benefit for
other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance
of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light
of changes to economic conditions and strategic objectives of the Company. The Company''s capital
management, amongst other things, aims to ensure that it meets financial covenants attached to the interest¬
bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial
covenants would permit the bank to immediately call loans and borrowings. There have been no breaches
in the financial covenants of any interest-bearing loans and borrowing in the current period.

Note 37

Since SASF has failed to issue NOC as stipulated in the scheme, the company has filed a petition before the
Hon''ble Calcutta High Court on the ground of breach of terms and conditions of the scheme. The matter is
pending before Hon''ble Calcutta High Court. The matter for NOC with WBIDCL is being followed

Note 39 Disclosure on Financial Instruments

This section gives an overview of the significance of financial instruments for the Company and provides
additional information on balance sheet items that contain financial instruments.

Financial assets and liabilities

The following table presents the carrying value and fair value of each category of financial assets and liabilities
as at March 31, 2026 & March 31, 2025:

Fair Value Hierarchy

The table shown analyses financial instruments carried at fair value. The different levels have been defined
below:

Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e.as prices) or indirectly (i.e., derived from prices)

Level 3 : Inputs for the asset or liability that are not based on observable market data (unobservable
inputs)

Balance confirmations are matched in respect of trade receivables and trade payables. In the opinion of the
management, it is unlikely that there will be any major reconciliation difference with material impact on the
carrying amounts of these assets and liabilities as reflected in these financial statements.

Note 40B

As per NCLT Order, we purchased RCHEM Industries Pvt. Ltd. In consideration of Rs 3,01,25,000/- but the shares
of the Company have not been transferred in the name of ARCL Organics Ltd as on 31/03/2025. So that the M/s
RCHEM Industries Pvt. Ltd. is not considered a Subsidiary Company of ARCL Organics Ltd. In this regards the
transferred value is shown under Other Current Assets in Note no.-12.

Note 41 Financial Risk Management

The Company''s business activities are exposed to a variety of risks including liquidity risk, credit risk, and
market risk. The Company seeks to minimize the potential adverse effects of these risks by managing them
through a structured process of identification, assessment, and prioritization of risks followed by coordinated
efforts to monitor, minimize and mitigate the impact of such risks on its financial performance and capital.
For this purpose, the Company has laid comprehensive risk assessment and minimization/mitigation
procedures, which are reviewed by the Audit Committee and approved by the Board from time to time. These
procedures are reviewed to ensure that executive management controls risks by way of a properly defined
framework. The Company does not enter into derivative financial

instruments for speculative purposes. The following table explains the sources of risk and how the entity
manages the risk in its financial statements. The management reviews the status of all principal risks with a
significant potential impact. Additionally, the Audit Committee carried out focused risk reviews of its Plant
and divisions. These reviews included an analysis of both the principal risks and the controls, monitoring, and
assurance processes established to mitigate those risks to acceptable levels. As a result of these reviews,
several actions were identified to continue to improve internal controls and the management of risk.

Credit Risk

Credit Risk is the risk that the counterparty will not meet its obligations under a financial instrument or
customer contract leading to financial loss. The company is exposed to credit risk from its operating
activities (primarily trade receivables and deposits to landlords) and from its financing activities, including
deposits with banks and financial institutions, foreign exchange transactions, and other financial instruments.
The company generally doesn''t have collateral.

Customer credit risk is managed by business through the company''s established policy, procedures, and
controls relating to customer credit risk management. The credit quality of each customer is assessed and
credit limits are defined in accordance with this assessment. Outstanding customer receivables and
security deposits are regularly monitored.

Market Risk

Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of
changes in market conditions. Market risk broadly comprises three types of risks namely currency risk,
interest rate risk, and price risk (for commodities or equity instruments).

(i) Foreign Exchange Risk - The company operates only in India and has not entered into any foreign exchange
or commodity derivative contracts. Accordingly, there is no significant exposure to market risk.

(ii) Interest Rate Risk -As a majority of the financial assets and liabilities of the Company are fixed interest¬
bearing instruments, the Company''s net exposure to interest risk is negligible.

(iii) Security Price Risk -. The company''s exposure to securities price risk arises from investments held by
the company and classified in the balance sheet either as fair value through OCI or fair value through Profit
or Loss.

To manage the price risk arising from investments, the company diversifies its portfolio. Diversification of
a portfolio is done in accordance with the directions of the Board.

Liquidity risk

The company''s objective is to at all times maintain the optimum level of liquidity to meet its cash and collateral
requirement at all times. The current committed lines of credit are sufficient to meet its short to medium-
term expansion needs and hence evaluate the concentration of risk with respect to liquidity as low. The
Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet
operational needs while maintaining headroom on its undrawn committed borrowing facilities at all times
so that the Company does not breach borrowing limits or covenants (where applicable) on any of its
borrowing facilities.

During this year company incurred Rs 19,49,361/- for the purchase of Research and Development
equipment in Fixed Assets and incurred expenses disclose in Note 26 of Rs 1,04,63,750/-.

Details of Research & Development expenses incurred during the year, debited under various heads of
Statement of Profit and Loss is given below:

Note 44

(i) Company has used the borrowings from banks and financial institutions for the specific purpose for which
it was taken at the balance sheet date.

(ii) No proceedings have been initiated or pending against the company for holding any benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder and company
has not been declared as wilful defaulter by and bank or institution or other lender.

(iii) To the best of the information available, the company has not entered into any transactions with companies
struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

(iv) Company has not traded or invested in Crypto currency or Virtual Currency during the financial year

(v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities
("Funding party") with the understanding (whether recorded in writing or otherwise) that the Company shall
directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding party (ultimate beneficiaries); or provide any guarantee, security or the like on behalf of
the ultimate beneficiaries.

(vi) No funds (which are material either individually or in the aggregate) have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company
to or in any other person(s) or entity(ies), including foreign entity ("Intermediaries”), with the understanding,
whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

Note 46

Note on Segment reporting to be included by updating the below language

The Company is engaged in the business of manufacturing and selling of Phenolics, Amino Resins, Melamine
Resins and Formaldehyde. Based on the nature of products, production process, regulatory environment,
customers and distribution methods there are no reportable segment(s) other than “''Chemicals and Allied
Products.''”

13. Provisions and Contingent Liabilities

The Company recognizes a provision when there is a present obligation as a result of past event that probably requires
an out flow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a
Contingent Liability is made when there is a possible obligation from a past event but their existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control
of the company

14. Revenue Recognition

In accordance with Ind AS 115 “Revenue from Contracts with customers”, Revenue from contracts with customers
is recognized on transfer of control of promised goods or services to a customer at an amount that reflects the
consideration to which the Company is expected to be entitled to in exchange for those goods or services.

(i) Sale of Goods

Revenue from the sale of goods is recognized when the Company satisfies the performance obligation in
accordance with the provisions of contract with customer. This is achieved when control of the product
has been transferred to the customer, which is generally determined when title, ownership, risk of
obsolesce and loss pass to the customer and Company has present right to payment. The Company collects
goods and services tax (GST) on behalf of the government and, therefore, these are not economic benefits
flowing to the Company. Hence, they are excluded from revenue.

(ii) Interest Income

Interest Income is recognized based on time proportion basis considering the amount outstanding and the
rate applicable. Interest Income is included in the Other Income in the statement of Profit and Loss.

15. Income Tax

(i) Current Income Tax

Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance
with the Income Tax Act, 1961.

(ii) Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases
of assets and liabilities and their carrying amount for the financial reporting purposes at the reporting date.
Deferred Tax assets are recognized to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences and the carry forward of unused tax credits and unused
tax losses can be utilized. Current and deferred tax is recognized in the statement of Profit and Loss, except
to the extent that it relates to the items recognized in the other comprehensive income or directly in equity.

16. Employee benefits

The present value of the defined benefit obligations depends on a number of factors that are determined on a n
actuarial basis using a number of assumptions

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognized in respect of employees services upto the end of reporting and are measured at the amounts
expected to be paid when the liabilities are settled.

(ii) Long term obligations

The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12 months
are measured at the present value of expected future payments to be made in respect of services made by
employees upto the end of the reporting period. The benefits are discounted using the government
securities at the end of reporting period.

(iii) Post employment obligations - Gratuity

The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of the
plan assets. The present value of the obligation is determined by discounting the estimated future cash
outflows by reference to market yields at the end of the reporting period on government bonds that have
the term approximating to the terms of the related obligations.

17. Earnings per Share

Basic earnings per share are computed by dividing the profit for the year attributable to the equity shareholders for
the year by the weighted average number of shares outstanding during the year.

18. Cash Flow

The investing and financing activities in cash flow statement do not have a direct impact on current cash flows
although they do affect the capital and asset structure of an entity. The company has disclosed these transactions, to
the extent, material in notes to cash flow statement.

19. Segment Reporting

The Company has identified that its operating activity is a single primary business segment. Accordingly, whole of
India has been considered as one geographical segment. Hence, segment reporting is not applicable.

20. Foreign Currencies

Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rates (i.e.
INR) at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot rates of exchange at the reporting date.

Foreign exchange gains and losses resulting from the settlement of transactions in foreign currencies and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognized in Statement of Profit and Loss.

21. Research and Development

Research and Development expenditures of revenue nature are charged to Profit & Loss Account, while capital
expenditure is added to the cost of fixed assets in the year in which these are incurred.

22. Lease

a. Where the Company is the lessee

The company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less
any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of
the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, company’s incremental borrowing rate.

Generally, the company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

Fixed payments, including in-substance fixed payments;

Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;

Amounts expected to be payable under a residual value guarantee; and

The exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an
optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early
termination of a lease unless the company is reasonably certain not to terminate early.

Short-term leases and leases of low-value assets

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of real estate
properties that have a lease term of 12 months. The company recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.

b. Where the Company is the lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognised in the statement of profit
and loss on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in
the statement of Profit &Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately
in the statement of Profit &Loss.

Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the
lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net
investment in the lease. Initial direct costs relating to assets given on finance leases are charged to Statement of
Profit and Loss.

23. Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker (CODM). The CODM who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors of the Company.

24. Standard notified but not yet effective:

There are no new standards that are notified but not yet effective up to the date of issuance of the company’s
financial statement.

25. Recent Pronouncement

Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting
policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods
beginning on or after April 1, 2023. The company has evaluated the amendment and the impact of the amendment is
insignificant in the standalone financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition
of ''accounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from
changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after
April 1, 2023. The company has evaluated the amendment and there is no impact on its standalone financial statements.

Disclosure under MSMED act.

a. the principal amount and the interest due thereon remaining unpaid to any supplier as at the end
of accounting year

b. Interest paid by the buyer under MSMED Act, 2006 along with the amounts of the payment
made to the supplier beyond the appointed day during each accounting year

c. Interest due and payable for the period (where the principal has been paid but interest under the
MSMED Act, 2006 not paid)

d. The amount of interest accrued and remaining unpaid at the end of accounting year

e. Interest due and payable even in the succeeding year, until such date when the interest dues as
above are actually paid to the small enterprise, for the purpose of disallowance as a deductible
expenditure under section 23.

n) Sensitivity Analysis: Significant actuarial assumptions for the determination of the defined benefit
obligation are discount rate and expected salary increase rate. Effect of change in mortality rate is
negligible. Please note that the sensitivity analysis presented below may not be representative of the
actual change in the defined benefit obligation as it is unlikely that the change in assumption would
occur in isolation of one another as some of the assumptions may be correlated. The results of
sensitivity analysis are given below:

p) Defined Contribution Plans

Provident Fund for certain eligible employees is administered by the Company through Employees
Provident Fund as per the provisions of the Employees'' Provident Funds and Miscellaneous
Provisions Act, 1952.

The amount contributed is recognized as an expense and included in "Company''s contributions to
PF & other funds" of Statement of Profit and Loss account is Rs.57.18 lakhs (LY Rs.48.73 lakhs).

Notes

(a) The Estimates of future salary increases, considered in actuarial valuation takes account of
inflation, seniority, promotion and other relevant factors such as supply and demand in
employment market.

(b) Discount rate is based upon the market yields available on Government Bonds at the
accounting date with that of liabilities.

Note 31

Disclosure of under the Micro, Small and Medium Enterprises Development Act, 2006

The Company has not received full information from vendors regarding their status under Micro,
Small and Medium Enterprises Development Act, 2006 (MSMED ACT); hence disclosure relating
to amount unpaid at year end together with interest paid/payable have been given based on the
information so far available with the Company / identified by the Company management. The
detail of the same is as under.

Note 35 Contingent Liabilities

a) Claims against the company not acknowledged as debt (In lakhs):

Demand under Central Excise act, 1944 and Finance act, 1944 for the period from 2003¬
04, against which appeal was filed before Commissioner appeal- Rs. 17.68 lakhs.

The case of excise pending in Tribunal involving an amount of Rs. 396.34 lakhs against
which Rs. 74.34 lakhs paid towards security deposit.

Cases of sales tax amounting to Rs. 115.42 lakhs are pending before Deputy
Commissioner of Commercial Tax and Rs. 137.04 lakhs from 2005-06 before Joint
Commissioner of sales tax.

In Income tax, an appeal has been filed by the department against relief granted by
income tax Appellate Tribunal which is pending in High Court, Calcutta-Rs. 640.78 lakhs for
1988-98. And Rs.316.97 lakhs case is pending before Commissioner (Appeal) for the period.

. The position of both the units (Hid Road & Budge Budge) has been handed over back to
KOPT along with the stocks which are having recoverable value more than the rent payable,
Since the matter is sub judice we have ignored the value of recoverable from the company has
provided for rent payable.

. On Account of LC and Bank Guarantee Rs 2,82,74,459/ - and 1,57,00,000/- respectively.

b) Capital and other commitments: Rs. Nil (Previous Year - Rs. Nil)

Note 36 Capital Management

The Company''s objective when managing capital (defined as net debt and equity) are to
safeguard the Company''s ability to continue as a going concern in order to provide returns to
shareholders and benefit for other stakeholders, while protecting and strengthening the
balance sheet through the appropriate balance of debt and equity funding. The Company
manages its capital structure and makes adjustments to it, in light of changes to economic
conditions and strategic objectives of the Company. The Company''s capital management,
amongst other things, aims to ensure that it meets financial covenants attached to the interest¬
bearing loans and borrowings that define capital structure requirements. Breaches in meeting
the financial covenants would permit the bank to immediately call loans and borrowings.
There have been no breaches in the financial covenants of any interest-bearing loans and
borrowing in the current period.

Note 37

Since SASF has failed to issue NOC as stipulated in the scheme, the company has filed a
petition before the Hon''ble Calcutta High Court on the ground of breach of terms and
conditions of the scheme. The matter is pending before Hon''ble Calcutta High Court. The
matter for NOC with WBIDCL is being followed

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (i.e.as prices) or indirectly (i.e., derived from prices)

Level 3 : Inputs for the asset or liability that are not based on observable market data
(unobservable inputs)

Note 40A

Balance confirmations are matched in respect of trade receivables and trade payables. In the
opinion of the management, it is unlikely that there will be any major reconciliation difference
with material impact on the carrying amounts of these assets and liabilities as reflected in
these financial statements.

Note 40B

As per NCLT Order, we purchased RCHEM Industries Pvt. Ltd. In consideration of Rs
3,01,25,000/- but the shares of the Company have not been transferred in the name of ARCL
Organics Ltd as on 31/03/2025. So that the M/s RCHEM Industries Pvt. Ltd. is not considered
a Subsidiary Company of ARCL Organics Ltd. In this regards the transferred value is shown
under Other Current Assets in Note no.-12.

Note 41 Finacial Risk Management

The Company''s business activities are exposed to a variety of risks including liquidity risk,
credit risk, and market risk. The Company seeks to minimize the potential adverse effects of
these risks by managing them through a structured process of identification, assessment, and
prioritization of risks followed by coordinated efforts to monitor, minimize and mitigate the
impact of such risks on its financial performance and capital. For this purpose, the Company
has laid comprehensive risk assessment and minimization/mitigation procedures, which are
reviewed by the Audit Committee and approved by the Board from time to time. These
procedures are reviewed to ensure that executive management controls risks by way of a
properly defined framework. The Company does not enter into derivative financial

instruments for speculative purposes. The following table explains the sources of risk and
how the entity manages the risk in its financial statements. The management reviews the
status of all principal risks with a significant potential impact. Additionally, the Audit
Committee carried out focused risk reviews of its Plant and divisions. These reviews included
an analysis of both the principal risks and the controls, monitoring, and assurance processes
established to mitigate those risks to acceptable levels. As a result of these reviews, several
actions were identified to continue to improve internal controls and the management of risk.

a) Credit Risk

Credit Risk is the risk that the counterparty will not meet its obligations under a financial
instrument or customer contract leading to financial loss. The company is exposed to credit
risk from its operating activities (primarily trade receivables and deposits to landlords) and
from its financing activities, including deposits with banks and financial institutions, foreign
exchange transactions, and other financial instruments. The company generally doesn''t have
collateral.

Customer credit risk is managed by business through the company''s established policy,
procedures, and controls relating to customer credit risk management. The credit quality of
each customer is assessed and credit limits are defined in accordance with this assessment.
Outstanding customer receivables and security deposits are regularly monitored.

b) Market Risk

Market risk is the risk that the fair value of future cash flow of financial instruments may
fluctuate because of changes in market conditions. Market risk broadly comprises three types
of risks namely currency risk, interest rate risk, and price risk (for commodities or equity
instruments).

(i) Foreign Exchange Risk - The company operates only in India and has not entered into any
foreign exchange or commodity derivative contracts. Accordingly, there is no significant
exposure to market risk.

(ii) Interest Rate Risk -As a majority of the financial assets and liabilities of the Company are
fixed interest-bearing instruments, the Company''s net exposure to interest risk is negligible.

(iii) Security Price Risk -. The company''s exposure to securities price risk arises from
investments held by the company and classified in the balance sheet either as fair value
through OCI or fair value through Profit or Loss.

To manage the price risk arising from investments, the company diversifies its portfolio.
Diversification of a portfolio is done in accordance with the directions of the Board.

c) Liquidity risk

The company''s objective is to at all times maintain the optimum level of liquidity to meet its
cash and collateral requirement at all times. The current committed lines of credit are sufficient
to meet its short to medium-term expansion needs and hence evaluate the concentration of
risk with respect to liquidity as low. The Company monitors rolling forecasts of its liquidity
requirements to ensure it has sufficient cash to meet operational needs while maintaining
headroom on its undrawn committed borrowing facilities at all times so that the Company
does not breach borrowing limits or covenants (where applicable) on any of its borrowing
facilities.

The company primarily depends on its own funds and has a low level of borrowing.

The table below summarises the maturity profile of the Company''s financial liabilities based
on contractual undiscounted payments:

Note 44

(i) Company has used the borrowings from banks and financial institutions for the specific
purpose for which it was taken at the balance sheet date.

(ii) No proceedings have been initiated or pending against the company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made
thereunder and company has not been declared as willful defaulter by and bank or institution or
other lender.

(iii) To the best of the information available, the company has not entered into any transactions
with companies struck off under section 248 of the Companies Act, 2013 or section 560 of
Companies Act, 1956

(iv) Company has not traded or invested in Crypto currency or Virtual Currency during the
financial year

(v) The Company has not received any fund from any person(s) or entity(ies), including foreign
entities ("Funding party") with the understanding (whether recorded in writing or otherwise)
that the Company shall directly or indirectly lend or invest in other persons or entities indentified
in any manner whatsoever by or on behalf of the Funding party (ultimate beneficiaries); or
provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(vi) No funds (which are material either individually or in the aggregate) have been advanced or
loaned or invested (either from borrowed funds or share premium or any other sources or kind
of funds) by the Company to or in any other person(s) or entity(ies), including foreign entity
("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

Sensitivity Analysis: Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase rate. The effect of change in mortality rate is negligible. Please note that the sensitivity analysis presented below may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated. The results of sensitivity analysis are given below:

Defined Contribution Plans

A Provident Fund for certain eligible employees is administered by the Company through Employees Provident Fund as per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The amount contributed is recognized as an expense and included in “Company’s contributions to PF & other funds” of Statement of Profit and Loss account is Rs.25.96 lakhs (LY Rs.30.88 lakhs).

Notes:

(a) The Estimates of future salary increases, considered in actuarial valuation takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in employment market.

(b) Discount rate is based upon the market yields available on Government Bonds at the accounting date with that of liabilities.

NOTE 35 - CONTINGENT LIABILITIES

a) Claims against the company not acknowledged as debt (In lakhs):

• Demand under Central Excise act, 1944 and Finance act, 1944 for the period from 2003 -04, against which appeal was filed before Commissioner appeal- Rs. 17.68 lakhs

• The case of excise pending in Tribunal involving an amount of Rs. 396.34 lakhs against which Rs. 74.34 lakhs paid towards security deposit.

_ui uamn ^

• Cases of sales tax amounting to Rs. 115.42 lakhs are pending before Deputy Commissioner of Commercial Tax

and Rs. 137.04 lakhs from 2005-06 before Joint Commissioner of sales tax._

• In Income tax, an appeal has been filed by the department against relief granted by income tax Appellate Tribunal which is pending in High Court, Calcutta-Rs. 640.78 lakhs for 1988-98. And Rs 316.97 lakhs case is pending before

Commissioner (Appeal) for the period._

. The position of both the units (Hid Road & Budge Budge) has been handed over back to KOPT along with the stocks which are having recoverable value more than the rent payable, Since the matter

is sub judice we have ignored the value of recoverable from the company has provided for rent payable._

. On Account of LC and Bank Guarantee Rs 5,96,63,501/- and 37,87,805/- respectively.

b) Capital and other commitments: Rs. Nil (Previous Year - Rs. Nil)

NOTE 36 - CAPITAL MANAGEMENT

H The Company''s objective when managing capital (defined as net debt and equity) are to safeguard the Company''s ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company. The Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

NOTE 37

H The charge of dues of IDBI Bank now taken over by Stressed Assets Stabilization Fund (SASF) and WBIDCL has not yet been filed in connection with the satisfaction of charge on ROC portal, despite full and final payment made as per the scheme approved by the Hon’ble Calcutta High Court.

H Since SASF has failed to issue NOC as stipulated in the scheme, the company has filed a petition before the Hon’ble Calcutta High Court on the grounds of breach of terms and conditions of the scheme. The matter is pending before Hon’ble Calcutta High Court. The matter for NOC with WBIDCL is being followed.

Fair Value Hierarchy

The table shown analyses financial instruments carried at fair value. The different levels have been defined below: Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.as prices) or indirectly (i.e., derived from prices)

Level 3 : Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Balance confirmations are matched in respect of trade receivables and trade payables. In the opinion of the management, it is unlikely that there will be any major reconciliation difference with material impact on the carrying amounts of these assets and liabilities as reflected in these financial statements.

NOTE 40B

As per NCLT Order, we purchased RCHEM Industries Pvt. Ltd. In consideration of Rs 3,01,25,000/- but the shares of the Company have not been transferred in the name of ARCL Organics Ltd as on 31/03/2023. So that the M/s RCHEM Industries Pvt. Ltd. is not considered a Subsidiary Company of ARCL Organics Ltd. In this regards the transferred value is shown under Other Current Assets in Note no. -12.

NOTE 41 FINACIAL RISK MANAGEMENT

The Company’s business activities are exposed to a variety of risks including liquidity risk, credit risk, and market risk. The Company seeks to minimize the potential adverse effects of these risks by managing them through a structured process of identification, assessment, and prioritization of risks followed by coordinated efforts to monitor, minimize and mitigate the impact of such risks on its financial performance and capital. For this purpose, the Company has laid comprehensive risk assessment and minimization/mitigation procedures, which are reviewed by the Audit Committee and approved by the Board from time to time. These procedures are reviewed to ensure that executive management controls risks by way of a properly defined framework. The Company does not enter into derivative financial instruments for speculative purposes. The following table explains the sources of risk and how the entity manages the risk in its financial statements. The management reviews the status of all principal risks with a significant potential impact. Additionally, the Audit Committee carried out focused risk reviews of its Plant and divisions. These reviews included an analysis of both the principal risks and the controls, monitoring, and assurance processes established to mitigate those risks to acceptable levels. As a result of these reviews, several actions were identified to continue to improve internal controls and the management of risk.

a) Credit Risk

Credit Risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer contract leading to financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables and deposits to landlords) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions, and other financial instruments. The company generally doesn’t have collateral.

Customer credit risk is managed by business through the company’s established policy, procedures, and controls relating to customer credit risk management. The credit quality of each customer is assessed and credit limits are defined in accordance with this assessment. Outstanding customer receivables and security deposits are regularly monitored.

b) Market Risk

Market risk is the risk that the fair value of future cash flow of financial instruments may fluctuate because of changes in market conditions. Market risk broadly comprises three types of risks namely currency risk, interest rate risk, and price risk (for commodities or equity instruments).

(i) Foreign Exchange Risk - The company operates only in India and has not entered into any foreign exchange or commodity derivative contracts. Accordingly, there is no significant exposure to market risk.

(ii) Interest Rate Risk -As a majority of the financial assets and liabilities of the Company are fixed interestbearing instruments, the Company’s net exposure to interest risk is negligible.

(iii) Security Price Risk -. The company’s exposure to securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or fair value through Profit or Loss To manage the price risk arising from investments, the company diversifies its portfolio. Diversification of a portfolio is done in accordance with the directions of the Board.

c) Liquidity risk

The company''s objective is to at all times maintain the optimum level of liquidity to meet its cash and collateral requirement at all times. The current committed lines of credit are sufficient to meet its short to medium-term expansion needs and hence evaluate the concentration of risk with respect to liquidity as low. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

NOTE -43 EXPENDITURE ON RESEARCH & DEVELOPMENT

During this year company incurred Rs 3,81,463/- for the purchase of Research and Development equipment in Fixed Assets and incurred expenses disclose in Note 26 of Rs 1,00,25,550/-.

(i) Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date.

(ii) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder and company has not been declared as willful defaulter by and bank or institution or other lender.

(iii) To the best of the information available, the company has not entered into any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956

(iv) The Company does not have a policy of closing its books on a quarterly basis and preparing quarterly financials

(v) Company has not traded or invested in Crypto currency or Virtual Currency during the financial year

vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities ("Funding party") with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities indentified in any manner whatsoever by or on behalf of the Funding party (ultimate beneficiaries); or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

vii) No funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

NOTE 46 - SEGMENT REPORTING TO BE INCLUDED BY UPDATING THE BELOW LANGUAGE

The Company is engaged in the business of manufacturing and selling Phenolics, Amino Resins, Melamine Resins and Formaldehyde. Based on the nature of products, production process, regulatory environment, customers and distribution methods there are no reportable segment(s) other than "''Chemicals and Allied Products''"