అకౌంట్స్ గమనికలుNACL Industries Ltd.

Mar 31, 2026

3.18 Provisions, contingent liabilities and contingent
assets

Provisions are recognized only when there is a present
obligation as a result of past events and when a reasonable
estimate of the amount of obligation can be made. The
amount recognized as a provision is the best estimate of
the consideration required to settle the present obligation
at the end of the reporting period, taking into account the
risks and uncertainties surrounding the obligation. When
a provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the
present value of those cash flows (when the effect of the
time value of money is material).

Contingent liabilities are disclosed for (i) possible
obligation which will be confirmed only by future events
not wholly within the control of the Company or (ii)
present obligations arising from past events where it is
not probable that an outflow of resources will be required
to settle the obligation or a reliable estimate of the
amount of the obligation cannot be made.

Contingent asset is not recognised in standalone financial
statements since this may result in the recognition of
income that may never be realised. However, when the
realisation of income is virtually certain, then the related
asset is not a contingent asset and is recognized.

Provisions, contingent liabilities and contingent assets are
reviewed at each Balance Sheet date.

3.19 Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

3.20 Financial assets

3.20.1 Initial recognition and measurement

Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair
value through profit or loss.

The classification of financial assets at initial recognition
depends on the financial asset''s contractual cash flow
characteristics and the Company''s business model for
managing them. With the exception of trade receivables
that do not contain a significant financing component
or for which the Company has applied the practical
expedient, the Company initially measures a financial
asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs. Trade
receivables that do not contain a significant financing
component or for which the Company has applied the
practical expedient are measured at the transaction price
determined under Ind AS 115. Refer note 3.3.

In order for a financial asset to be classified and measured
at amortised cost or fair value through OCI, it needs to give
rise to cash flows that are ''solely payments of principal and
interest (SPPI)'' on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed
at an instrument level. Financial assets with cash flows
that are not SPPI are classified and measured at fair value
through profit or loss, irrespective of the business model.

The Company''s business model for managing financial
assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines
whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial
assets classified and measured at amortised cost are
held within a business model with the objective to hold
financial assets in order to collect contractual cash flows
while financial assets classified and measured at fair value
through OCI are held within a business model with the
objective of both holding to collect contractual cash flows
and selling.

Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation
or convention in the marketplace (regular way trades)
are recognised on the trade date, i.e., the date that the
Company commits to purchase or sell the asset.

3.20.2 Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in four categories:

• Financial assets at amortised cost (debt instruments)

• Financial assets at fair value through other

comprehensive income (FVTOCI) with recycling of
cumulative gains and losses (debt instruments)

• Financial assets designated at fair value through OCI
with no recycling of cumulative gains and losses
upon derecognition (equity instruments)

• Financial assets at fair value through profit

or loss

Financial assets at amortised cost (debt instruments)

A ''financial asset'' is measured at the amortised cost if both
the following conditions are met:

• The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and

• Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.

This category is the most relevant to the Company. After
initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest
rate (EIR) method and are subject to impairment as per the
accounting policy applicable to ''Impairment of financial
assets. Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is
included in other income in the profit or loss. The losses
arising from impairment are recognised in the profit or
loss.

Financial assets designated at fair value through OCI
(equity instruments)

Upon initial recognition, the Company can elect to classify
irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet
the definition of equity under Ind AS 32 Financial
Instruments: Presentation and are not held for trading.
The classification is determined on an instrument-by¬
instrument basis. Equity instruments which are held for
trading and contingent consideration recognised by an
acquirer in a business combination to which Ind AS 103
applies are classified as at FVTPL.

Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as
other income in the statement of profit and loss when

the right of payment has been established, except when
the Company benefits from such proceeds as a recovery
of part of the cost of the financial asset, in which case,
such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to
impairment assessment.

3.20.3 Derecognition

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Company''s
balance sheet) when:

• The rights to receive cash flows from the asset have
expired, or

• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a ''pass¬
through'' arrangement; and either (a) the Company
has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control
of the asset

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise
the transferred asset to the extent of the Company''s
continuing involvement. In that case, the Company also
recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that
reflects the rights and obligations that the Company has
retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the
maximum amount of consideration that the Company
could be required to repay.

3.20.4 Impairment of financial assets

The Company recognises an allowance for expected credit
losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance
with the contract and all the cash flows that the Company
expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows
will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the
contractual terms.

ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those
credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing
of the default (a lifetime ECL).

For trade receivables only, the Company applies the
simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses
to be recognised from initial recognition of the
receivables. As a practical expedient, the Company uses
a provision matrix to determine impairment loss of its
trade receivables. The provision matrix is based on its
historically observed default rates over the expected
life of the trade receivable and is adjusted for forward
looking estimates.

In addition to the provision matrix, the Company
also performs individual assessment of credit risk for
specific customers where there is objective evidence of
increased credit risk. Where such individual assessment
indicates that a trade receivable meets the criteria for
being classified as credit impaired under Ind AS 109, the
Company recognises a loss allowance based on lifetime
ECL and discloses such credit impaired trade receivables
separately in the standalone balance sheet.

A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated
future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes
the following observable data:

a. significant financial difficulty of the debtor;

b. a breach of contract, such as a default;

c. it is probable that the debtor will enter bankruptcy
or other financial reorganization;

d. the disappearance of an active market for a security
because of financial difficulties.

The ECL loss allowance (or reversal) during the year is
recognised in the standalone statement of profit and loss.

Write-off:

The gross carrying amount of a financial asset is written
off when the Company has no reasonable expectations
of recovering a financial asset in its entirely or a portion
thereof. For individual customers, the Company has

policy of writing off the gross carrying amount when the
financial asset is past due based on historical experience
of recoveries of similar assets.

For debt instruments at fair value through OCI, the
Company applies the low credit risk simplification. At
every reporting date, the Company evaluates whether
the debt instrument is considered to have low credit risk
using all reasonable and supportable information that
is available without undue cost or effort. In making that
evaluation, the Company reassesses the internal credit
rating of the debt instrument.

3.21 Financial liabilities

3.21.1 Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and,
in the case of loans and borrowings and payables, net of
directly attributable transaction costs.

3.21.2 Subsequent measurement

For purposes of subsequent measurement, financial
liabilities are classified in two categories:

• Financial liabilities at fair value through profit or loss

• Financial liabilities at amortised cost (loans and
borrowings)

Financial liabilities at fair value through profit or
loss

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss.

Financial liabilities are classified as held for trading if
they are incurred for the purpose of repurchasing in the
near term. This category also includes derivative financial
instruments entered into by the Company that are not
designated as hedging instruments in hedge relationships
as defined by Ind AS 109.

Gains or losses on liabilities held for trading are recognised
in the profit or loss.

For liabilities designated as FVTPL, fair value gains/ losses
attributable to changes in own credit risk are recognized in
OCI. These gains/ losses are not subsequently transferred
to P&L. However, the Company may transfer the
cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the statement
of profit and loss. The Company has not designated any
financial liability as at fair value through profit or loss.

Financial liabilities at amortised cost (Loans and
borrowings)

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well
as through the EIR amortisation process.

Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit and loss.

3.21.3 Financial guarantee contracts

Financial guarantee contracts issued by the Company are
those contracts that require a payment to be made to
reimburse the holder for a loss it incurs because the specified
debtor fails to make a payment when due in accordance
with the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at fair value,
adjusted for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequently, the liability
is measured at the higher of the amount of loss allowance
determined as per impairment requirements of Ind AS 109
and the amount recognised less, when appropriate, the
cumulative amount of income recognised in accordance
with the principles of Ind AS 115.

3.21.4 Derecognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.

3.22 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the
net amount is reported in the consolidated balance sheet
if there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on
a net basis, to realise the assets and settle the liabilities
simultaneously.

3.23 Derivative financial instruments and hedge
accounting

3.23.1 Initial recognition and subsequent
measurement

The Company uses derivative financial instruments,
such as forward currency contracts, to hedge its foreign
currency risks. Such derivative financial instruments are
initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently
re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a
derivative under Ind AS 109 are recognised in the balance
sheet.

Any gains or losses arising from changes in the fair value
of derivatives are taken directly to profit or loss, except
for the effective portion of cash flow hedges, which is
recognised in OCI and later reclassified to profit or loss
when the hedge item affects profit or loss or treated
as basis adjustment if a hedged forecast transaction
subsequently results in the recognition of a non-financial
asset or non-financial liability.

For the purpose of hedge accounting, hedges are
classified as:

• Fair value hedges when hedging the

exposure to changes in the fair value of a
recognised asset or liability or an unrecognised
firm commitment.

• Cash flow hedges when hedging the exposure to
variability in cash flows that is either attributable to
a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised
firm commitment.

At the inception of a hedge relationship, the Company
formally designates and documents the hedge
relationship to which the Company wishes to apply
hedge accounting and the risk management objective
and strategy for undertaking the hedge.

The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being
hedged, and how the Company will assess whether the
hedging relationship meets the hedge effectiveness

requirements (including the analysis of sources of hedge
ineffectiveness and how the hedge ratio is determined). A
hedging relationship qualifies for hedge accounting if it
meets all of the following effectiveness requirements:

• There is ''an economic relationship'' between the
hedged item and the hedging instrument.

• The effect of credit risk does not ''dominate the value
changes'' that result from that economic relationship.

• The hedge ratio of the hedging relationship is the
same as that resulting from the quantity of the
hedged item that the Company actually hedges
and the quantity of the hedging instrument that the
Company actually uses to hedge that quantity of
hedged item.

3.24 Dividend

The Company recognises a liability to pay dividend to
equity holders of the Company when the distribution
is authorised, and the distribution is no longer at the
discretion of the Company. As per the corporate laws in
India, a distribution is authorised when it is approved by
the shareholders. A corresponding amount is recognised
directly in equity.

3.25 Critical accounting judgements and key sources
of estimation uncertainty

In the application of the Company''s accounting policies
the directors of the Company are required to make
judgements, estimates and assumptions about the
carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates

and associated assumptions are based on historical
experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period, or in the
period of the revision and future periods if the revision
affects both current and future periods.

Critical Judgements

The following are the critical judgements, apart from
those involving estimations, that the management
has made in the process of applying the Company''s
accounting policies and that have the most significant
effect on the amounts recognized in the standalone
financial statements:

Contingencies

In the normal course of business, contingent liabilities
may arise from litigations and other claims against the
Company. Where the potential liabilities have a low
probability of crystallizing or are very difficult to quantify
reliably, we treat them as contingent liabilities. Such
liabilities are disclosed in the notes but are not provided
for in the standalone financial statements. Although there
can be no assurance regarding the final outcome of the
legal proceedings, we do not expect them to have a
materially adverse impact on our financial position.

3.25.1 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.

3.26 Recent pronouncements

The Company applied for the first-time certain standards
and amendments, 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 1 - Classification of
Liabilities as Current or Non-current and Non¬
current Liabilities with Covenants

In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current
or non-current. The amendments are effective for
annual reporting periods beginning on or after 1 April
2025 retrospectively in accordance with Ind AS 8.

The amendments have not resulted in additional
disclosures and have not had an impact on the
classification of Company''s liabilities.

ii. Amendments to Ind AS 7 and Ind AS 107 -
Supplier Finance Arrangements

In August 2025, the MCA notified 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 finance
arrangements on an entity''s liabilities, cash flows
and exposure to liquidity risk.

The amendments have not resulted in additional
disclosures and have not had an impact on the
classification of Company''s liabilities.

iii. There are certain other amendments to Ind AS 12
Income Taxes and Ind AS 21 The Effects of Changes
in Foreign Exchange Rates, which did not have any
impact on the Company.

3.27 Standards notified but not yet effective

There are no standards that are notified and not yet
effective as on the date. The Company applied for the
first-time certain standards and amendments, which are
effective for annual periods beginning on or after 1 April
2025. The Company has not early adopted any standard,
interpretation or amendment that has been issued but is
not yet effective.

Notes:

i) Includes guarantee provided by the Company during FY 2021-22 to its wholly owned subsidiary NACL Spec-chem Limited,
without charging any commission. The fair value of the gurantee commission of H251 lakhs was accounted as deemed
investments and added to the cost of investments held in the subsidiary.

ii) The Company subscribed to Compulsory Convertible Debentures (CCD) of H10,300 lakhs (March 31, 2025: H9,300
lakhs) [comprising of 10,300 (March 31, 2025: 9,300 number)] number of CCD of H1,00,000 each) during the FY
2025-26 and also converted outstanding loans (including interest) of Rs. 5,195 lakhs into CCDs (also refer note 7).
The Company during the current year has extended the tenure of CCDs amounting H3,000 lakhs which had maturity date in
current year, for further tenor of two years.

iii) The Company is yet to transfer funds towards share capital of NACL Industries (Nigeria) Limited as on March 31,2026.

Notes:

(i) Raw materials includes goods-in-transit of H3,040 lakhs (March 31,2025: H6,640 lakhs).

(ii) The cost of finished goods recognised as an expense includes provision for near expiry stock aggregated to H110 lakhs (March
31,2025: H120 lakhs), write off on account of expired stock aggregated to H308 lakhs (March 31,2025: H171 lakhs).

(iii) Refer Note 16 for details of Inventories hypothecated or pledged.

(i) No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person
or debts due by firms or private companies respectively in which any director is a partner or a director or a member, other
than as disclosed above.

(ii) Refer note 16 for details of trade receivables hypothecated or pledged.

(iii) In accordance with Ind AS 109, the Company uses the expected credit loss ("ECL") model for measurement and recognition
of impairment loss on its trade receivables. For this purpose, the Company uses a provision matrix to compute the
expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk
factors and historical data of credit losses from various customers adjusted for forward looking estimates. Accordingly, the
Company creates provision for past due receivables beyond 180 days ranging between 25%-100% after reckoning the
underlying collaterals.

bank to be called "Unpaid Dividend Account". The unclaimed dividend lying in such account is required to be transferred to
the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years
from the date of declaration.

(b) During the year, there has been a delay in transfer of unpaid dividend in respect of final dividend of FY 2017-18 amounting to
H5 lakhs to the IEPF for the year ended March 31,2026, which was due in September 2025. The Company has transferred the
said amount to IEPF on January 29, 2026.

Further, During FY 2024-25, there has been a delay in transfer of unpaid dividend in respect of final dividend of FY 2016-17
amounting to H4 lakhs to the IEPF for the year ended March 31,2025, which was due in September 2024. The Company has
transferred the said amount to IEPF on September 18, 2025.

(ii) Margin money / deposit

Margin money represents amounts deposited with banks as security against bank guarantees issued to various authorities
and unutilized proceeds from rights issue of H3,080 lakhs deposited in earmarked bank account, pending utilization for
general corporate purpose (refer note 42).

d) Share based payment reserve: The share based payment reserve account is used to recognise the grant date fair value of
options issued to employees under Employee stock option plan. The amounts recognised in this reserve are transferred to
Securities Premium when Options are exercised by the employees or they expire unexercised.

e) Effective portion of cash flow hedge reserve: When a derivative is designated as a cash flow hedging instrument, the
effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated
in the cash flow hedging reserve. The cumulative gain or loss previously recognised in the cash flow hedging reserve is
transferred to the Statement of Profit and Loss upon the occurrence of the related forecasted transaction.

f) Retained earnings: Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers
to general reserve, debenture redemption or other reserve as well as dividends or other distributions paid to shareholders.
Retained earnings include re-measurement loss/(gain) on defined benefit plans, net of taxes that will not be reclassified to
Statement of Profit and Loss. The amount is available for distribution to the shareholders.

Nature and purpose of reserves:

a) General Reserves: General reserve was created through an annual transfer of profits from retained earnings in accordance
with applicable regulations. General reserve can be utilised only in accordance with the specific requirements of Companies
Act, 2013.

b) Security premium: Security premium represents the amount received in excess of the face value of the equity shares. The
utilisation of the security premium reserve is governed by the relevant provisions of the Companies Act, 2013 ("Act").

c) Reserve for equity instruments through other comprehensive income: The Company has elected to recognise changes in
the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated in a
separate reserved titled as Equity instruments through Other Comprehensive Income within equity. The Company transfers
amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Notes:

(a) Term loans

Corporate term loans H Nil (March 31,2025: H 1,439 lakhs) are secured by first ranking pari-passu charge on present and future
property, plant and equipments of the Company, second ranking pari-passu charge on present and future stock and book
debts of the company

Working Capital term loans H Nil (March 31,2025: H 2,513 lakhs) are secured by 100% guaranteed by National Credit Guarantee
Trustee Company Limited (NCGTC), second ranking pari-passu charge on current assets and property, plant and equipments
of the Company, both present and future

Above term loans carried rate of interest in the range of Marginal Cost of Funds based Lending Rate (MCLR) plus 0.30% to
3.10% p.a. These loans are fully repaid in current year.

(b) Loans repayable on demand:

Loans repayable on demand from banks (includes Cash Credit Facilities, Working capital demand loan and packing credit
foreign currency facilities, buyers credit availed under non fund based limits) from various banks and financial institutions are
secured by way of hypothecation of current assets comprising stock in trade, book debts and stores and spares both present
and future. The aforesaid facilities are further secured by letter of comfort issued by Coromandel International Limited
(Holding Company) w.e.f., January, 2026.

Rate of interest on loans repayable on demand is in the range of 6.95% to 18% p.a. (March 31,2025: 5.80% to 18% p.a.).

Note: Contingent liabilities mainly pertain to disputed tax demands under appeal/pending before various appellate / assessing
authorities against the Company and litigations with various parties. It is expected that there will be no outflow of economic
resources embodying economic benefits. Hence, no provision is considered necessary against the same. The amounts disclosed
above represent our best estimate and the uncertainties are dependent on the outcome of the legal processes initiated by the
Company or the claimant as the case may be.

B. Financial Guarantee

The Company had given guarantee for the term loan and working capital facilities availed by the NACL Spec-chem Limited (wholly
owned subsidiary) to HDFC Bank Limited and Axis Bank Limited of H Nil (March 31,2025: H 10,864 lakhs).

32. Employee benefit plans

a) Defined contribution plan - Provident fund

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under
the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These
contributions are made to the fund administered and managed by the Government of India. The Company''s monthly
contributions are charged to the Statement of Profit and Loss in the period they are incurred. Total expense recognised during
the year aggregated H 859 lakhs (March 31,2025: H 817 lakhs).

b) Defined benefit plan - Gratuity

In accordance with the ''Payment of Gratuity Act, 1972'' of India, the Company, provides for Gratuity, a defined
retirement benefit plan (the ''Gratuity Plan¹) covering eligible employees. Liabilities with regard to such Gratuity plan
are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss for the
year determined. The Gratuity fund is administered through a scheme of Life Insurance Corporation of India (LIC).
The present value of the defined benefit obligation and the related current service cost and past service cost, were measured

Expected contribution to the post employee benefits plan during the next financial year is expected to be H 287 lakhs (March 31,
2025: H 266 lakhs), based on the amount recongnized in the statement of profit and loss in respect of gratuity.

The weighted average duration of the defined benefit obligation is 6 years (March 31,2025: 7 years)

c) Labour code

On 21 November 2025, the Central Government issued four separate notifications in the Official Gazette announcing
implementation of four Labour Codes, viz., the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on
Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. These four codes replace and
consolidate 29 existing labour laws. Following the implementation of the four labour codes, the Central Government has pre¬
published the draft rules on 31 December 2025 under the respective Labour Codes, for public comment and the final rules are
expected to be notified in due course. To ensure smooth implementation, the Ministry of Labour and Employment has also
issued the Frequently Asked Questions (FAQs) on the four codes.

The four codes prescribe an inclusive definition of the term ''wages'', which among other matters is relevant for determination
of post-employment benefits including gratuity to all employees. In accordance with the definition, certain specified
items forming part of remuneration are not included in the wages and these excluded items cannot exceed 50% of total
remuneration. If there is an excess, then it is presumed that excess amount also forms part of wages. The four codes also

introduce changes related to leave entitlement and encashment for workers. Going forward, workers'' leave balance in excess
of 30 days will be encashed at the end of each calendar year and workers will have a right to demand encashment for entire
accumulated leave.

The Company has assessed financial implications of these changes and noted that its existing salary structure as well leave
policies are in compliance with the requirements of the labour codes. Accordingly, the Company has concluded that the
changes do not have any material impact on its financial statements. Considering that it is emerging topic and the finalisation
of Central/ State Rules is still pending, the Company will continue monitoring changes and provide appropriate accounting
effect as required based on future developments.

33. Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act 2006

The amount due to micro, small and medium enterprises as defined under "Micro, Small and Medium Enterprises Development
Act, 2006" (''Act'') has been determined to the extent such parties have been identified on the basis of information available with
the Company. The disclosure relating to micro, small and medium enterprises are as under:

No changes were made in the objectives, policies or processes for managing capital for the year ended March 31, 2026 and
March 31,2025.

In order to achieve this overall objective, 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.

Notes:

(i) Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents and other bank balances.

(ii) Equity includes issued equity capital, securities premium and all other reserves.

34. Financial instruments
34.1 Capital management

The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital through
flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit
rating. The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic
plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors
the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Notes:

(i) Borrowings include non-current and current borrowings (Refer Note 16)

(ii) In case of trade receivables, cash and cash equivalents, other bank balances, borrowings, trade payables, and other financial
assets and liabilities it is assessed that the fair values approximate their carrying amounts largely due to the short-term
maturities of these instruments.

(iii) Investments (unquoted) are measured at fair value through initial designation in accordance with Ind AS 109.

34.3 Fair Value by hierarchy
Valuation technique and key inputs
Level 1

Quoted prices (unadjusted) in an active market for similar 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 assets or liabilities that are not based on observable market data (unobservable inputs).

The fair values of the unquoted preference shares have been estimated using a Discounted Cash Flow model. The valuation
requires management to make certain assumptions about the model inputs, including forecast cash flows, earnings growth,
discount rate, and probabilities of the various estimates within the range used in management''s estimate of fair value for these
unquoted preference investments.

Valuation inputs and relationships to fair value:

The following table summarises the valuation technique used in measuring the fair value of the financial instruments, as well as
the significant unobservable inputs used. The total value of investments in unquoted preference shares are not material. Hence
quantitative disclosures are not disclosed.

b) Currency risk

The Company is exposed to foreign exchange risk through imports from overseas suppliers in various foreign currencies, exports
to customers abroad, bill discounting, buyer''s credit, packing credit. The exchange rate between the rupee and foreign currencies
has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s
operations are adversely affected as the rupee appreciates/ depreciates against these currencies. The Company monitors and
manages its financial risks by analysing its foreign exchange exposures. The Company, in accordance with its Board approved
risk management policies and procedures, enters into foreign exchange forward contracts to manage its exposure in foreign
exchange rates.

Transfer between level 1 and 2:

There have been no transfers from level 2 to level 1 or vice-versa in 2025-26 and 2024-25.

34.4 Financial risk management

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk
management framework. The board of directors has established the risk management committee, which is responsible for
developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors
on its activities.

The Company has adequate internal processes to assess, monitor and manage financial risks. These risks include market risk
(including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

Financial risk factors:

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus
is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
The Company has adequate internal processes to assess, monitor and manage financial risks. The Company''s exposure to credit risk
is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.
The liquidity risk is measured by the Company''s inability to meet its financial obligations as they become due.

a) Market risk

Market risk is the risk that the fair value of future cash flows of financial instrument will fluctuate because of changes in market
prices. Market risk comprises of foreign currency risk and interest rate risk. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the returns.

Sensitivity analysis:

For the year ended March 31, 2026 and March 31, 2025, every increase / decrease of H 1 in the respective foreign currencies
compared to functional currency of the Company would impact profit before tax by H 22 lakhs/ (H 22 lakhs) and H 82 lakhs/
(H 82 lakhs) respectively and Impact Equity, net of tax by H 16 lakhs/ (H 16 lakhs) and H 61 lakhs/ (H 61 lakhs) respectively.

c) Interest rate risk

The Company draws term loans, working capital demand loans, avails cash credit, foreign currency borrowings including buyer''s
credit, packing credit etc. for meeting its funding requirements. The Company manages the interest rate risk by maintaining
appropriate mix/portfolio of borrowings having floating rate of interest. The borrowings are serviced on a timely manner and
repayments of the principal and interest amounts are made on a regular basis. However, the Company does not have any floating
rate borrowings outstanding.

d) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company''s receivables from customers, deposits with banks, foreign exchange
transactions and other financial instrument. Credit risk is managed through credit approvals, monitoring the creditworthiness and
establishing credit limits of customers to which the Company grants credit terms in the normal course of business. The company
collects security deposits from its dealer customers which act as security against the outstanding trade receivables from such
dealer customers. In the event of default, these security deposits can be adjusted against the uncollectible trade receivables from
such dealer customers. The Company establishes an expected credit loss model and impairment that represents its estimate of
expected losses in respect of trade and other receivables and investments.

Trade receivables:

(i) The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is
managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers
to whom the Company grants credit terms in the normal course of business. The credit period on sale of goods varies with
seasons and markets and generally ranges between 30 to 120 days. Before accepting any new customer, the Company
assesses the potential customer''s credit quality and defines credit limits by customer. Limits attributed to customers are
reviewed annually.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The
provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted
for forward looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

(ii) The concentration of risk with respect to trade receivables is reasonably low, as Company''s customers are located in several
jurisdictions representing large number of minor receivables operating in independent markets. Trade receivable amounting
to H 5,797 lakhs (March 31,2025: H6,201 lakhs) is due from customers who represent more than 5% of total trade receivables.

Security deposits:

It consists of rent, electricity and other deposits. The Group does not expect any financial loss as the said deposits are given only

to credible vendors/ service providers.

Cash and cash equivalents and deposits with banks:

Cash and cash equivalents and deposits of the Group are held with banks which have high credit rating. The Group considers that

its cash and cash equivalents and deposits with banks have low credit risk based on the external credit ratings of the counterparties.

e) Other price risks

(i) The Company is exposed to valuation of equity investment risks as the Company''s equity investments are held for strategic
rather than trading purposes.

(ii) The Company''s operating activities require the ongoing import of key raw materials, it is exposed to commodity risk due to
its reliance on international suppliers for raw materials, making it vulnerable to fluctuations in global market prices, currency
exchange rates, and geopolitical events. The Company''s effective risk management strategies are in place to mitigate
potential adverse effects on production and profitability.

f) Liquidity risk

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by

continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The Company''s principal sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.

For the year ended March 31,2026, pursuant to a strategic review, the Company has decided to discontinue certain products under
development, which has been disclosed as exceptional items.

For the year ended March 31,2025, exceptional item pertains to favourable ruling related to insurance claim proceeding.

42. Acquisition of majority Stake by Coromandel International Limited and rights issue

Pursuant to (i) share purchase agreement dated March 12, 2025 among Coromandel International Limited ("CIL"), KLR Products
Limited, Mrs. Kanumuru Lakshmi Raju and Bright Town Investment Advisor Private Limited ("Promoter SPA"); (ii) share
purchase agreement dated March 12, 2025 among CIL and M/s. Agro Life Science Corporation; (iii) share purchase agreement
dated March 12, 2025 among CIL and M/s. Krishi Rasayan Exports Private Limited; and (iv) the mandatory open offer made
by CIL to the public shareholders of NACL in accordance with the provisions of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("Takeover Regulations"), CIL has acquired in aggregate
10,69,12,581 equity shares of NACL representing 53.08% of the voting share capital of NACL. Consequently, CIL has acquired
control of NACL and became the promoter of NACL and NACL has become a subsidiary of CIL with effect from August 8, 2025.

The Company has made a rights issue of 32,501,851 fully paid up Equity Shares of face value of H 1 each for a price of H76.7 per
rights equity share (including a premium of H 75.7 per rights equity share) aggregating up to H24,929 lakhs for repayment of
debt of H 10,400 lakhs of the Company, H 8,300 lakhs towards repayment of debt of a subsidiary and balance towards general
corporate purposes and issue expenses. These equity shares are allotted on December 31,2025. These funds has been utilised for
the purpose it was raised and unutilized amount of H 3,080 lakhs is deposited in earmarked bank account, pending utilization for
general corporate purpose. Subsequent to rights issue, CIL''s stake increased to 53.73%.

Earnings per share for all the comparative periods have been retrospectively adjusted for the effects of the rights issue.

43. Reclassification

During the year, in view of improved presentation, the Company has reassessed presentation of following:

1. Rebates to customers and provision for sales returns, have been adjusted against "trade receivables", which were earlier
included in "other financial liabilities" amounting to H5,040 lakhs as at March 31,2026 (H4,015 lakhs as at March 31,2025).

2. Accrued salaries and wages to employees have been reclassified under "Other financial liabilities" which were earlier included
in trade payables amounting to H352 lakhs as at March 31,2026 (H157 lakhs as at March 31,2025).

3. Right to return assets have been reclassified under "Inventories" which were earlier included in "Other current assets"
amounting to H541 lakhs as at March 31,2026 (H748 lakhs as at March 31,2025).

44. Additional regulatory information

(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company
for holding any benami property.

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

(iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(iv) Other than as disclosed in note 42 relating to transfer of proceeds of rights issue of H8,300 lakhs for repayment of loan to the
Company''s wholly owned subsidiary NACL Spec-Chem Limited, 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(v) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961.

(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the
Companies (Restriction on number of Layers) Rules, 2017.

(vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

(viii) The Company does not have any charges which are yet to be registered with ROC beyond the statutory period. The Company
does not have any satisfaction of charges which are yet to be registered with the ROC beyond the statutor

---

Mar 31, 2025

3.16 Contingent liabilities

Provisions are recognised only when there is a present
obligation as a result of past events, it is probable that
an outflow of resources embodying economic benefits
will be required to settle the obligation and when a
reasonable estimate of the amount of obligation can
be made. The amount recognised as a provision is the
best estimate of the consideration required to settle
the present obligation at the end of the reporting
period, taking into account the risks and uncertainties
surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the
present obligation, its carrying amount is the present
value of those cash flows (when the effect of the time
value of money is material). Contingent liabilities
are disclosed for (i) possible obligation which will be
confirmed only by future events not wholly within
the control of the Company or (ii) present obligations

arising from past events where it is not probable that
an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the
obligation cannot be made.

Contingent assets

Contingent asset is not recognised in standalone financial
statements since this may result in the recognition of income
that may never be realised. However, when the realisation
of income is virtually certain, then the related asset is not a
contingent asset and is recognized.

Provisions, contingent liabilities and contingent assets are
reviewed at each Balance Sheet date.

3.17 Financial Instruments

(i) Initial recognition and Measurement

Trade receivables and debt securities issued are
initially recognised when they are originated. All
other financial assets and financial liabilities are
initially recognised when the Company becomes
a party to the contractual provisions of the
instrument.

Financial assets and financial liabilities are
recognised when a Company becomes a party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue
of financial assets and financial liabilities (other
than financial assets and financial liabilities at
fair value through profit or loss) are added to
or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly
attributable to the acquisition of financial
assets or financial liabilities at fair value through
profit or loss are recognised immediately in the
standalone statement of profit and loss. However,
trade receivables that do not contain a significant
financing component are measured at transaction
price.

(ii) Subsequent Measurement
Non-derivative financial instruments:

a. Financial assets carried at amortised
cost

A financial asset is subsequently measured
at amortised cost using the effective interest
method if it is held with in a business model
whose objective is to hold the asset in order
to collect contractual cash flows and the

contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest
on the principal amount outstanding. The
amortised cost is reduced by impairment

losses. Interest income, foreign exchange
gains and losses and impairment are
recognised in profit or loss. Any gain or loss
on derecognition is recognised in profit or
loss.

b. Financial assets at fair value through
other comprehensive income

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business
model whose objective is achieved by both
collecting contractual cash flows and selling
financial assets and the contractual terms
of the financial asset give rise on specified
dates to cash flows that are solely payments
of principal and interest on the principal
amount outstanding. The Company has made
an irrevocable election for its investments
which are classified as equity instruments
to present the subsequent changes in fair
value in other comprehensive income based
on its business model. Impairment losses
(and reversal of impairment losses) on
equity investments measured at FVOCI are
not reported separately from other changes
in fair value. Dividends are recognised as
income in profit or loss unless the dividend
clearly represents a recovery of part of the
cost of the investment. Other net gains and
losses are recognised in OCI and are not
reclassified to profit or loss.

c. Financial assets at fair value through
profit or loss

Financial assets are measured at fair value
through profit or loss unless it is measured
at amortised cost or at fair value through
other comprehensive income.

d. Financial liabilities

Financial liabilities are subsequently carried
at amortized cost using the effective interest
method, except for contingent consideration
recognized in a business combination which
is subsequently measured at fair value
through standalone statement of profit and
loss. For trade and other payables maturing
within one year from the Balance Sheet
date, the carrying amounts approximate
fair value due to the short maturity of these
instruments.

Offsetting

Financial assets and financial liabilities are
offset and the net amount presented in the
balance sheet when, and only when, the
Company currently has a legally enforceable
right to set off the amounts and it intends
either to settle them on a net basis or to

realise the asset and settle the liability
simultaneously.

Financial guarantee contracts

A financial guarantee contract is a contract
that requires the issuer to make specified
payments to reimburse the holder for a loss
it incurs because a specified debtor fails to
make payments when due in accordance
with the terms of a debt instrument.

Financial guarantee contracts issued by the
Company are initially measured at their fair
values and, if not designated as at FVTPL, are
subsequently measured at the higher of:

• the amount of loss allowance
determined in accordance with
impairment requirements of Ind AS
109; and

• the amount initially recognised less,
when appropriate, the cumulative
amount of income recognised in
accordance with the principles of Ind
AS 115.

Derivative financial instruments:

The Company enters into a variety of derivative
financial instruments to manage its exposure
to interest rate and foreign exchange rate risks,
including foreign exchange forward contracts.

Derivatives are initially recognised at fair value
at the date the derivative contracts are entered
into and are subsequently remeasured to their
fair value at the end of each reporting period. The
resulting gain or loss is recognised in statement of
profit and loss immediately unless the derivative is
designated and effective as a hedging instrument,
in which event the timing of the recognition in
statement of profit and loss depends on the
nature of the hedging relationship and the nature
of the hedged item.

Effective interest method:

The effective interest method is a method
of calculating the amortized cost of a debt
instrument and of allocating interest income
over the relevant period. The effective interest
rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points
paid or received that form an integral part of the
effective interest rate, transaction costs and other
premiums or discounts) through the expected life
of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount on
initial recognition.

Income is recognised on an effective interest basis
for debt instruments other than those financial
assets classified as at Fair Value Through Profit
or Loss (FVTPL). Interest income is recognised
in standalone statement of profit and loss and is
included in the "other income" line item.

Hedge accounting:

The Company designates derivative contracts
in a cash flow hedging relationship by applying
the hedge accounting principles designated in
a hedging relationship, used to hedge its risks
associated with change in interest rates on the
recognised liability.

At the inception of the hedge relationship, the
Company documents the relationship between
the hedging instrument and the hedged item,
along with its risk management objectives
and its strategy for undertaking various hedge
transactions. Furthermore, at the inception of
the hedge and on an ongoing basis, the Company
documents whether the hedging instrument is
highly effective in offsetting changes in fair values
or cash flows of the hedged item attributable to
the hedged risk. These derivative contracts are
stated at the fair value at each reporting date.

The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash
flow hedges is recognised in other comprehensive
income. The gain or loss relating to the ineffective
portion is recognised immediately in statement of
profit and loss.

Amounts previously recognised in other
comprehensive income and accumulated in
equity relating to (effective portion as described
above) are reclassified to statement of profit and
loss in the periods when the hedged item affects
profit or loss.

Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated,
or exercised, or when it no longer qualifies for
hedge accounting. Any gain or loss recognised in
other comprehensive income and accumulated
in equity at that time remains in equity and is
recognised when the forecast transaction is
ultimately recognised in statement of profit and
loss. When a forecast transaction is no longer
expected to occur, the gain or loss accumulated
in equity is recognised immediately in statement
of profit and loss.

Investment in subsidiaries and
associates:

On initial recognition, these investments
are recognized at fair value plus any directly
attributable transaction cost. Subsequently, they
are measured at cost.

Derecognition of financial assets and
financial liabilities

Financial asset:

The Company de-recognises a financial asset
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards of
ownership of the

asset to another party. If the Company retains
substantially all the rewards of ownership of
a transferred financial asset, the Company
continues to recognize the financial asset and
also recognizes a collateralised borrowing for the
proceeds received.

On de-recognition of a financial asset in its
entirety, the difference between the asset''s
carrying amount and the sum of the consideration
received and receivable and the cumulative
gain or loss that had been recognised in other
comprehensive income and accumulated in equity
is recognised in standalone statement of profit
and loss if such gain or loss would have otherwise
been recognised in standalone statement of profit
and loss on disposal of that financial asset.

Financial liabilities:

The Company derecognises financial liabilities
when, and only when, the Company''s obligations
are discharged, cancelled or have expired. The
Company also derecognises a financial liability
when its terms are modified and the cash flows
of the modified liability are substantially different,
in which case a new financial liability based on
the modified terms is recognised at fair value.
The difference between the carrying amount
of the financial liability derecognised and the
consideration paid and payable is recognised in
the standalone statement of profit and loss.

Impairment of Financial assets:

The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial
assets which are not fair valued through profit
and loss. Loss allowance for trade receivables
with no significant financing component is
measured at an amount equal to lifetime ECL.
For all other financial assets, expected credit
losses are measured at an amount equal to the
12-month ECL, unless there has been a significant
increase in credit risk from initial recognition in
which case those are measured at lifetime ECL.
The amount of expected credit losses (or reversal)
that is required to adjust the loss allowance at the
reporting date to the amount that is required to
be recognised as an impairment gain or loss in the
standalone statement of profit and loss.

For trade receivables only, the Company applies
the simplified approach permitted by Ind AS 109
Financial Instruments, which requires expected
lifetime losses to be recognised from initial
recognition of the receivables. As a practical
expedient, the Company uses a provision matrix
to determine impairment loss of its trade
receivables. The provision matrix is based on
its historically observed default rates over the
expected life of the trade receivable and is
adjusted for forward looking estimates.

In addition to the provision matrix, the Company
also performs individual assessment of credit risk
for specific customers where there is objective
evidence of increased credit risk. Where such
individual assessment indicates that a trade
receivable meets the criteria for being classified
as credit impaired under Ind AS 109, the Company
recognises a loss allowance based on lifetime
ECL and discloses such credit impaired trade
receivables separately in the standalone balance
sheet.

A financial asset is credit-impaired when one or
more events that have a detrimental impact on
the estimated future cash flows of the financial
asset have occurred. Evidence that a financial
asset is credit-impaired includes the following
observable data:

a. significant financial difficulty of the debtor;

b. a breach of contract, such as a default or 2
years past due;

c. it is probable that the debtor will enter
bankruptcy or other financial reorganization;

d. the disappearance of an active market for a
security because of financial difficulties.

The ECL loss allowance (or reversal) during
the year is recognised in the standalone
statement of profit and loss.

Write-off:

The gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectations of recovering a financial asset in
its entirely or a portion thereof. For individual
customers, the Company has policy of writing
off the gross carrying amount when the financial
asset is 2 years past due based on historical
experience of recoveries of similar assets.

3.18 Fair value measurement

In determining the fair value of its financial
instruments, the Company uses a variety of methods
and assumptions that are based on market conditions

and risks existing at each reporting date. The methods
used to determine fair value include discounted cash
flow analysis, available quoted market prices and dealer
quotes. All methods of assessing fair value result in
general approximation of value, and such value may
never actually be realised.

3.19 Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards

under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended March
31, 2025, MCA has notified Ind AS - 117 Insurance
Contracts and amendments to Ind AS 116 - Leases,
relating to sale and leaseback transactions, applicable
to the Group w.e.f. April 1, 2024. The Group has
reviewed the new pronouncements and based on its
evaluation has determined that it does not have any
significant impact in its financial statements.

Notes:

(i) Unclaimed dividend accounts

(a) If the dividend has not been claimed within 30 days from the date of declaration, the Company is required to transfer the total
amount of dividend which remains unpaid or unclaimed to a special account to be opened by the Company with a scheduled
bank to be called ""Unpaid Dividend Account"". The unclaimed dividend lying in such account is required to be transferred to
the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from
the date of declaration.

(b) During the year, there has been a delay in transfer of unpaid dividend in respect of final dividend of FY 2016-17 amounting to
? 4 lakhs to the IEPF for the year ended 31 March 2025, which was due in July 2024. The Company is in the process of transferring
the said amount to IEPF.

(ii) Margin money / deposit

Margin money represents amounts deposited with banks as security against bank guarantees issued to various authorities.

14.7.1 Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2020:

i) The Company set up the "NACL Industries Limited-Employee Stock Option Scheme-2020" (hereinafter referred to as "ESOS-2020")
and earmarked 25,00,000 number of equity shares of ? 1 each for issue to employees. The plan was approved in financial year
2020-21 and is administered by the Nomination and Remuneration Committee of the Board of Directors.

ii) Under the ESOS-2020 scheme, options are granted to eligible employees at an exercise price, which shall not be less than the
face value of the equity shares of the Parent Company. These options vest over a period of one to five years subject to continuous
employment and exercisable by the employees within two years of vesting. There is no performance condition attached to these
options.

Nature and purpose of reserves:

a) General Reserves: General reserve was created through an annual transfer of profits from retained earnings in accordance with
applicable regulations. General reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

b) Capital reserve: This represents capital subsidy received from government in earlier years for promotion of investment in backward
areas.

c) Security premium: Security premium represents the amount received in excess of the face value of the equity shares. The utilisation
of the security premium reserve is governed by the relevant provisions of the Companies Act, 2013 ("Act").

d) Reserve for equity instruments through other comprehensive income: This reserve represents the cumulative gains and losses
arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts
reclassified to retained earnings when those assets have been disposed off.

e) Share Options Outstanding Account: This reserve relates to share options granted by the Company to its employees under its
employee share option plans.

f) Effective portion of cash flow hedge reserve: When a derivative is designated as a cash flow hedging instrument, the effective
portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the cash flow
hedging reserve. The cumulative gain or loss previously recognised in the cash flow hedging reserve is transferred to the Statement
of Profit and Loss upon the occurrence of the related forecasted transaction.

g) Retained earnings: Retained earnings represents the Company''s undistributed earnings after taxes.

Notes:

1. In respect of the year ended March 31, 2023, shareholders approved at the Annual General Meeting held on September 22, 2023
a final dividend of ? 0.25 per equity share. The total amount paid with respect to final dividend is ? 497 lakhs.

Secured by: first ranking pari-passu charge on present and future property, plant and equipments of the Company, second ranking
pari-passu charge on present and future stock and book debts of the company.

Repayable in 12 quarterly instalments starting from June 2023 and the last installment is being payable in February 2026.

Rate of interest is Repo plus 3.10% p.a.

(b) Loans repayable on demand:

Loans repayable on demand from banks (includes Cash Credit Facilities, Working capital demand loan and packing credit foreign
currency facilities, buyers credit availed under non fund based limits) from various banks and financial institutions are secured by
way of hypothecation of current assets comprising stock in trade, book debts and stores and spares both present and future. The
aforesaid facilities are further secured by second charge on immovable and movable properties, both present and future, ranking
pari-passu with other working capital lenders.

Rate of interest on Rupee loans repayable on demand is in the range of 5.80% to 18.00% p.a. (March 31, 2024: 5.25% to 10.80% p.a.).

(c) Unsecured loans:

During the previous year, the Company participated in a supply chain financing arrangement (SCF) with banks, which is disclosed
under borrowings. The principal purpose of this arrangement was to provide funding to the Company, and accordingly the Company
derecognized original liabilities upon banks paying the Company''s suppliers. Payments to the suppliers by the banks were presented
as part of operating activities and payments to the banks by the Company were presented as part of financing activities.

* The Company has availed an unsecured loan of ? 1,000 lakhs from Mrs. K. Lakshmi Raju (Promoter) on 16^th November 2024 at an
interest rate of 10% p.a., approved by the Board on 12^th November 2024, with repayment of ? 1,010 lakhs due on or before 15^th
November 2025.

**An unsecured loan of ?2,500 lakhs has been obtained from Options Exim Pvt. Ltd. for one year at 10% p.a., backed by the personal
guarantee of Mrs. K. Lakshmi Raju, with a total repayment of ? 2,750 lakhs due on maturity.

The purpose of the loan is to meet the Company''s financial and operational business requirements.

(e) For the year ended 31 March 2025 and 31 March 2024, there has been a deviation with respect to certain ratios such as Debt
Service Coverage ratio and EBIDTA of the Company in comparison to the prescribed limits as per the respective loan agreements
disclosed under non current borrowings. The management has however obtained a confirmation prior to the approval of the
financial statements from such lenders on the satisfactory discharge of its debt servicing obligations and that the existing repayment
schedules as per the sanction terms would continue. Accordingly, borrowings continue to be classified in accordance with the terms
of the repayment schedule agreed with the lenders.

(a) The Company has disputed various demands raised by excise duty authorities for the Financial years 2004-05 to 2006-07 and 2008-
OS which are pending at various stages of appeals. While the Company does not expect these proceedings to have a materially
adverse effect on its financial position, any potential outflow related to interest costs, has been duly considered.

(b) The Company has disputed various demands raised by service tax authorities for the Financial years 2006-07 to 2010-11, which are
pending at various stages of appeals. While the Company does not expect these proceedings to have a materially adverse effect on
its financial position, any potential outflow related to interest costs, has been duly considered.

(c) The Group has disputed various demands raised by income tax authorities for the assessment years 2004-05 to 2007-08; 2009¬
10; 2016-17 to 2018-19; and 2022-23 which are pending at various stages of appeals. While the Company does not expect these
proceedings to have a materially adverse effect on its financial position, any potential outflow related to interest costs, has been duly
considered.

(d) The Company has disputed various demands raised by sales tax authorities for the financial years 2012-13 to 2016-17, which are
pending at various stages of appeals. While the Company does not expect these proceedings to have a materially adverse effect on
its financial position, any potential outflow related to interest costs, has been duly considered.

(e) The Company has disputed various demands raised by Goods and Service Tax authorities for the financial year 2017-2018 to 2019-20,
which are pending at various stages of appeals. While the Company does not expect these proceedings to have a materially adverse
effect on its financial position, any potential outflow related to interest costs, has been duly considered.

(f) The disputed amount of ? 1,032 lakhs pertaining to the demand raised by Director general of foreign trade (DGFT) office for the
excess exports benefits availed by the company for earlier years. During the previous year, vide final order dated Decmeber 31, 2023,
the Company has received a favourable order from Additional Director general of foreign trade. The Company also disputed the
penalty levied by the Office of the Commissioner of Customs (Adjudication) in respect of the same matter and the appeal is pending
before Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Company does not expect the outcome of these proceedings
to have a materially adverse effect on its financial position.

(g) Other contingent liability majorly pertains to demand for payment of alleged deficit of stamp duty, registration fees and penalty in
respect of a sales deed. The Company does not expect the outcome of these proceedings to have a material adverse effect on its
financial position.

B. Guarantee

The Company has given guarantee for the term loan and working capital facilities availed by the NACL Spec-chem Limited (wholly owned

subsidiary) to HDFC Bank Limited and Axis Bank Limited of ? 10,864 lakhs (March 31, 2024: ? 18,500 lakhs).

a. The Company entered into contract to purchase certain items of property, plant and equipment.

32. Defined benefit plans

a) Contribution to provident fund and other funds

- Provident fund:

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the
Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the
fund administered and managed by the Government of India. The Company''s monthly contributions are charged to the Statement of Profit
and Loss in the period they are incurred. Total expense recognised during the year aggregated ? 816 lakhs (March 31, 2024: ? 738 lakhs).

- Gratuity (funded):

Amount recognised in statement of profit and loss in respect of gratuity ? 265 lakhs (March 31, 2024: ? 209 lakhs).

b) Gratuity

In accordance with the ''Payment of Gratuity Act, 1972'' of India, the Company, provides for Gratuity, a defined retirement benefit plan
(the ''Gratuity Plan'') covering eligible employees. Liabilities with regard to such Gratuity plan are determined by an independent actuarial
valuation and are charged to the Statement of Profit and Loss for the year determined. The Gratuity fund is administered through a scheme
of Life Insurance Corporation of India (LIC).

The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the
projected unit credit method. These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk,
interest rate risk and market (investment) risk. The gratuity plan is funded. The funding requirements are based on the gratuity fund''s
actuarial measurement framework set out in the funding policies of the plan and the Company contributes to LIC.

34.4 Financial risk management

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management
framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring
the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk
limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures,
aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company audit committee oversees how management monitors compliance with the Company''s risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company audit
committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management
controls and procedures, the results of which are reported to the audit committee.

Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus is to
foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company
has adequate internal processes to assess, monitor and manage financial risks. The Company''s exposure to credit risk is influenced mainly
by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured
by the Company''s inability to meet its financial obligations as they become due.

Market risk

Market is the risk that the fair value of future cash flows of financial instrument will fluctuate because of changes in market prices. Market
risk comprises of foreign currency risk and interest rate risk. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the returns.

Foreign currency exposure

The Company is exposed to foreign exchange risk through imports from overseas suppliers in various foreign currencies, exports to
customers abroad, bill discounting, buyer''s credit, packing credit. The exchange rate between the rupee and foreign currencies has
changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s operations
are adversely affected as the rupee appreciates/ depreciates against these currencies. The Company monitors and manages its financial
risks by analysing its foreign exchange exposures. The Company, in accordance with its Board approved risk management policies and
procedures, enters into foreign exchange forward contracts to manage its exposure in foreign exchange rates.

Sensitivity analysis:

For the year ended March 31, 2025 and March 31, 2024, every increase / decrease of ? 1 in the respective foreign currencies compared to
functional currency of the Company would impact profit before tax by ? 82 lakhs/ (? 82 lakhs) and ? 57 lakhs/ (? 57 lakhs) respectively and
Impact Equity, net of tax by ? 61 lakhs/ (? 61 lakhs) and ? 43 lakhs/ (? 43 lakhs) respectively.

Interest rate risk:

The Company draws term loans, working capital demand loans, avails cash credit, foreign currency borrowings including buyer''s credit,
packing credit etc. for meeting its funding requirements. The Company manages the interest rate risk by maintaining appropriate mix/
portfolio of borrowings having floating rate of interest. The borrowings are serviced on a timely manner and repayments of the principal
and interest amounts are made on a regular basis.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company''s receivables from customers, deposits with banks, foreign exchange transactions and
other financial instrument. Credit risk is managed through credit approvals, monitoring the creditworthiness and establishing credit limits
of customers to which the Company grants credit terms in the normal course of business. The company collects security deposits from
its dealer customers which act as security against the outstanding trade receivables from such dealer customers. In the event of default,
these security deposits can be adjusted against the uncollectible trade receivables from such dealer customers. The Company establishes
an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables
and investments.

Trade receivables:

(i) The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed
through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom the
Company grants credit terms in the normal course of business. The credit period on sale of goods varies with seasons and markets
and generally ranges between 30 to 120 days. Before accepting any new customer, the Company assesses the potential customer''s
credit quality and defines credit limits by customer. Limits attributed to customers are reviewed annually.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision
matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward
looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

Security deposits:

It consists of rent, electricity and other deposits. The Group does not expect any financial loss as the said deposits are given only to credible
vendors/ service providers.

Cash and cash equivalents and deposits with banks:

Cash and cash equivalents and deposits of the Group are held with banks which have high credit rating. The Group considers that its cash
and cash equivalents and deposits with banks have low credit risk based on the external credit ratings of the counterparties.

Other price risks

The Company is exposed to valuation of equity investment risks as the Company''s equity investments are held for strategic rather than
trading purposes.

Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously
monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company''s principal
sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.

The Company has unutilised credit limits from the banks of ? 1,910 lakhs and ? 9,262 lakhs as of March 31, 2025 and March 31, 2024
respectively.

40. Operating Segments

The Company publishes the standalone financial statements of the Company along with the consolidated financial statements. In
accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial
statements.

41. Insurance claim

An Appeal has been filed by the Insurance Company (The Oriental Insurance Company Limited) against the Arbitration Award that was
disposed in favour of the Company, before the Hon''ble High Court of Delhi. Pending final disposal of the above appeal, the Company has
filed the Execution Petitions before Hon''ble High Court of Delhi for deposit of awarded amount in Material Damage (MD) Claim of ? 1,649
lakhs (includes interest) and Business Interruption Policy claim of ? 1,277 lakhs (includes interest) with the Court. With respect to the
execution petition filed by the Company in both the cases, the Hon''ble High Court of Delhi has passed an order vide its order dated March
19, 2021 & April 9, 2021 directed the Insurance Company to deposit the awarded amount towards Material Damage claim & Business
Interruption Policy respectively together with the interest upto the date of deposit with Court. During the financial year 2021-22, the
amount deposited by the Insurance Company has been released by the Court in favour of the Company after submission of equivalent
bank guarantee.

During the year, the Hon''ble High Court of Delhi, vide its order dated February 13, 2025, has ruled in favour of the Company by dismissing
the appeal filed by Insurance Company against the Arbitration Award related to the Company''s insurance claim. Pursuant to this favourable
ruling, the Company has recognized the award amount of ?2,926 lakhs (the amount was received in earlier years) as an Exceptional income
for the year ended 31 March 2025.

42. Proposed Acquisition of majority Stake by Coromandel International Limited

On March 12, 2025, the Promoter Group and certain other shareholders of the Company entered into Share Purchase Agreements
(''Agreements'') with Coromandel International Limited (the ''Acquirer''), pursuant to which the Acquirer will acquire 52.98% of the
shareholding in the Company, subject to the terms and conditions outlined in the Agreements. The parties are currently in the process of
obtaining the necessary regulatory approvals to consummate the transaction.

As of the date of approval of these audited standalone financial statements by the Board of Directors, the Promoter Group continues to be
the existing shareholder of the Company

43. The Company carried trade receivables aggregating to ? 7,796 lakhs as at 31 March 2024 (netted off with subsequent collections up
to the date of the auditor''s report for the year ended 31 March 2024), for which the auditors of the Company had received unreliable
responses to their independent balance confirmation requests, for audit of the standalone financial statements for the year ended
31 March 2024, from some of these customers.

Subsequently, the management has instituted an independent investigation into the matter and has also undertaken steps including
but not limited to conducting internal investigation, terminating the company''s employee allegedly involved in the matter and
carrying out balance confirmation and reconciliation procedures with the customers. The management has assessed the resultant
impact on the standalone financial statements of the Company and has provided for a cumulative amount of ? 1,978 lakhs (including
the ? 1,880 lakhs charged during the previous year), to fully cover the net exposure.

44. Additional regulatory information

(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for
holding any benami property.

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

(iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(iv) 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(v) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant
provisions of the Income Tax Act, 1961.

(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies
(Restriction on number of Layers) Rules, 2017.

(vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

(viii) The Company does not have any charges which are yet to be registered with ROC beyond the statutory period. The Company does
not have any satisfaction of charges which are yet to be registered with the ROC beyond the statutory period except for:

The satisfaction of above charges is pending for registration due to procedural delays at the ROC Hyderabad and the Company is
currently following up with the ROC to complete the registration of such satisfaction.

(ix) The Company has borrowings from banks and financial institutions on the basis of security of current assets. Quarterly returns or
statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

(x) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

(xi) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease
agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and
equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.

(xii) The Company has not revalued any of its property, plant and equipment (including right-of-use-assets) and intangible assets during
the year.

(xiii) The Company does not have any transactions with companies which are struck off.

(xiv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

As per our Report of even date attached

For B S R and Co. For and on behalf of the Board of Directors

Chartered Accountants NACL Industries Limited

Firm''s Registration No.: 128510W CIN: L24219TG1986PLC016607

Baby Paul K. Lakshmi Raju G. Veera Bhadram Santanu Mukherjee

Partner Chairperson Whole Time Director Director

Membership No.: 218255 (DIN: 00545776) (DIN: 00114611) (DIN: 07716452)

Anish T. Mathew Satish Kumar Subudhi

Chief Financial Officer Company Secretary

Place: Hyderabad Place: Hyderabad

Date: May 28, 2025 Date: May 28, 2025

---

Mar 31, 2024

3.16 Contingent liabilities

Provisions are recognised only when there is a present obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reasonable estimate of the amount of obligation can be made. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Contingent liabilities are disclosed for (i) possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets

Contingent asset is not recognised in standalone financial statements since this may result in the recognition of income

that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

3.17 Financial Instruments

(i) Initial recognition and Measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the standalone statement of profit and loss. However, trade receivables that do not contain a significant financing component are measured at transaction price.

(ii) Subsequent Measurement

Non-derivative financial instruments:

a. Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost using the effective interest method if it is held with in a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

b. Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Impairment losses (and reversal of impairment

losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.

c. Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income.

d. Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through standalone statement of profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

• the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and

• the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.

Derivative financial instruments:

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in statement of profit and loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in statement of profit and loss depends on

the nature of the hedging relationship and the nature of the hedged item.

Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at Fair Value Through Profit or Loss (FVTPL). Interest income is recognised in standalone statement of profit and loss and is included in the "other income" line item.

Hedge accounting:

The Company designates derivative contracts in a cash flow hedging relationship by applying the hedge accounting principles designated in a hedging relationship, used to hedge its risks associated with change in interest rates on the recognised liability.

At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk. These derivative contracts are stated at the fair value at each reporting date.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in statement of profit and loss.

Amounts previously recognised in other comprehensive income and accumulated in equity relating to (effective portion as described above) are reclassified to statement of profit and loss in the periods when the hedged item affects profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in statement of profit and loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in statement of profit and loss.

Investment in subsidiaries and associates

On initial recognition, these investments are recognized at fair value plus any directly attributable transaction cost. Subsequently, they are measured at cost.

Derecognition of financial assets and financial liabilities

Financial asset:

The Company de-recognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company retains substantially all the rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralised borrowing for the proceeds received.

On de-recognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in standalone statement of profit and loss if such gain or loss would have otherwise been recognised in standalone statement of profit and loss on disposal of that financial asset.

Financial liabilities

The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The Company also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the standalone statement of profit and loss.

Impairment of Financial assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised as an impairment gain or loss in the standalone statement of profit and loss.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. As a practical expedient, the Company uses a provision matrix to determine impairment loss

of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL loss allowance (or reversal) during the year is recognised in the standalone statement of profit and loss.

3.18 Fair value measurement

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may never actually be realised.

3.19 Changes in material accounting policies Material accounting policy information

The Company adopted Disclosure of Accounting Policies (Amendments to Ind AS 1) from 01 April 2023. Although the amendments did not result in any changes in the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.

The amendments require the disclosure of ''material'' rather than ''significant'' accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements.

3.20 Recent Pronouncements

The Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(b) Loans repayable on demand:

Loans repayable on demand from banks (includes Cash Credit Facilities, Working capital demand loan and packing credit foreign currency facilities, buyers credit availed under non fund based limits) from HDFC Bank Limited, SVC Co-operative Bank Limited, RBL Bank Limited, Shinhan Bank Limited, Axis Bank Limited, Bank of Bahrain and Kuwait B.S.C., SBM Bank (India) Limited, Yes Bank Limited, Kotak Mahindra Bank Limited, Doha Bank and Qatar National Bank are secured by way of hypothecation of current assets comprising stock in trade, book debts and stores and spares both present and future. The aforesaid facilities are further secured by second charge on immovable and movable properties, both present and future, ranking pari-passu with other working capital lenders.

Rate of interest on Rupee loans repayable on demand is in the range of 5.25% to 10.8% p.a. (March 31, 2023: 5.75% to 9.75% p.a.)

(c) Unsecured loans :

The Company participates in a supply chain financing arrangement (SCF) with banks, which is disclosed under borrowings. The principal purpose of this arrangement is to provide funding to the Company, and accordingly the Company derecognizes original liabilities upon banks paying the Company''s suppliers. Payments to the suppliers by the banks are presented as part of operating activities and payments to the banks by the Company are presented as part of financing activities.

(d) During the year ended 31 March 2024, there has been a deviation with respect to certain ratios such as Debt Service Coverage ratio and EBIDTA of the Company in comparison to the prescribed limits as per the respective loan agreements. The management has however obtained a confirmation prior to the approval of the financial statements from such lenders on the satisfactory discharge of its debt servicing obligations and that the existing repayment schedules as per the sanction terms would continue. Accordingly, borrowings continue to be classified in accordance with the terms of the repayment schedule agreed with the lenders.

Notes:

(a) The Company has disputed various demands raised by excise duty authorities for the Financial years 2004-05 to 2006-07 and 2008-09 which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(b) The Company has disputed various demands raised by service tax authorities for the Financial years 2006-07 to 2010-11, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(c) The Company has disputed various demands raised by income tax authorities for the assessment years 2004-05 to 2007-08; 2009-10; 2016-17 to 2018-19; 2020-21 and 2022-23 which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(d) The Company has disputed various demands raised by sales tax authorities for the financial years 2012-13 to 2016-17, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(e) The Company has disputed various demands raised by Goods and Service Tax authorities for the financial year 2017-2018 to 2019-20, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(f) The disputed amount of ? 1,032 lakhs as on March 31, 2023 pertaining to the demand raised by Director general of foreign trade (DGFT) office for the excess exports benefits availed by the company for earlier years. During the year ended 31 March 2024, vide final order dated Decmeber 31, 2023, the Company has received a favourable order from Additional Director general of foreign trade. The Company also disputed the penalty levied by the Office of the Commissioner of Customs (Adjudication) in respect of the same matter and the appeal is pending before Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.

(g) Other contingent liability majorly pertains to demand for payment of alleged deficit of stamp duty, registration fees and penalty in respect of a sales deed. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

32. Defined benefit plans

a) Contribution to provident fund and other funds

- Provident fund:

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the fund administered and managed by the Government of India. The Company''s monthly contributions are charged to the Statement of Profit and Loss in the period they are incurred. Total expense recognised during the year aggregated ? 738 lakhs (March 31, 2023: ? 649 lakhs).

- Gratuity (funded):

Amount recognised in statement of profit and loss in respect of gratuity ? 209 lakhs (March 31, 2023: ? 170 lakhs).

b) Gratuity

In accordance with the ''Payment of Gratuity Act, 1972'' of India, the Company, provides for Gratuity, a defined retirement benefit plan (the ''Gratuity Plan'') covering eligible employees. Liabilities with regard to such Gratuity plan are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss for the year determined. The Gratuity fund is administered through a scheme of Life Insurance Corporation of India (LIC).

The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit credit method. These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. The gratuity plan is funded. The funding requirements are based on the gratuity fund''s actuarial measurement framework set out in the funding policies of the plan and the Company contributes to LIC.

34.4 Financial risk management

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has adequate internal processes to assess, monitor and manage financial risks. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured by the Company''s inability to meet its financial obligations as they become due.

Market risk

Market is the risk that the fair value of future cash flows of financial instrument will fluctuate because of changes in market prices. Market risk comprises of foreign currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the returns.

Sensitivity analysis:

For the year ended March 31, 2024 and March 31, 2023, every increase / decrease of 1% in the respective interest rate compared to existing rate of interest of the Company would impact profit before tax by ? 583 lakhs/ (? 583 lakhs) and ? 650 lakhs/ (? 650 lakhs) respectively and Impact Equity, net of tax by ? 436 lakhs/ (? 436 lakhs) and ? 486 lakhs/ (? 486 lakhs) respectively.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, deposits with banks, foreign exchange transactions and other financial instrument. Credit risk is managed through credit approvals, monitoring the creditworthiness and establishing credit limits of customers to which the Company grants credit terms in the normal course of business. The company collects security deposits from its dealer customers which act as security against the outstanding trade receivables from such dealer customers. In the event of default, these security deposits can be adjusted against the uncollectible trade receivables from such dealer customers. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

Expected credit loss (ECL):

(i) The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom the Company grants credit terms in the normal course of business. The credit period on sale of goods varies with seasons and markets and generally ranges between 30 to 180 days. Before accepting any new customer, the Company assesses the potential customer''s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed annually.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

Other price risks

The Company is exposed to valuation of equity investment risks as the Company''s equity investments are held for strategic rather than trading purposes.

Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company''s principal sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.

The Company has unutilised credit limits from the banks of ? 9,262 lakhs and ? 12,172 lakhs as of March 31, 2024 and March 31,2023 respectively.

40. Operating Segments:

The Company publishes the standalone financial statements of the Company along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

41. Insurance claim

An Appeal has been filed by the Insurance Company (The Oriental Insurance Company Limited) against the Arbitration Award that was disposed in favour of the Company, before the Hon''ble High Court of Delhi. Pending final disposal of the above appeal, the Company has filed the Execution Petitions before Hon''ble High Court of Delhi for deposit of awarded amount in Material Damage (MD) Claim of ? 1,649 lakhs (includes interest) and Business Interruption Policy claim of ? 1,277 lakhs (includes interest) with the Court. With respect to the execution petition filed by the Company in both the cases, the Hon''ble High Court of Delhi has passed an order vide its order dated March 19, 2021 & April 9, 2021 directed the Insurance Company to deposit the awarded amount towards Material Damage claim & Business Interruption Policy respectively together with the interest upto the date of deposit with Court. During the financial year 2021-22, the amount deposited by the Insurance Company has been released by the Court in favour of the Company after submission of equivalent bank guarantee. As the matter is subjudice and as advised by its legal council, the Company has not recognized the deposit amount received as income and the interest cost, if any in the books of account.

42. Subsequent events

FY 22-23: The Board of Directors in its meeting held on May 22, 2023 have recommended a final dividend of ? 0.25 per equity share of ? 1 each. The recommended equity dividend is subject to the approval by the shareholders at the Annual General Meeting and has not been included as a liability in the standalone financial statements as of 31 March 2023.

43. Additional regulatory information

(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

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

(iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(iv) 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(v) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

(viii) The Company does not have any charges which are yet to be registered with ROC beyond the statutory period. The Company does not have any satisfaction of charges which are yet to be registered with the ROC beyond the statutory period except for:

(x) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

(xi) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.

(xii) The Company has not revalued any of its property, plant and equipment (including right-of-use-assets) and intangible assets during the year.

(xiii) The Company does not have any transactions with companies which are struck off.

(xiv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

44. The Company has trade receivables from certain customers aggregating to ?7,796 lakhs as at 31 March 2024 (netted off with subsequent collections up to the date of these financial statements), for which the auditors of the Company received unreliable responses to their independent balance confirmation requests from some of these customers. Management is initiating an independent investigation into this matter, pending which, the Company has made a provision of ? 1,880 lakhs in the books of account.

As per our Report of even date attached for and on behalf of the Board of Directors

For B S R and Co NACL Industries Limited

Chartered Accountants CIN: L24219TG1986PLC016607

(Firm Registration No. 128510W)

M Pavan Kumar Raghavender Mateti

Managing Director & CEO Director

(DIN:01514557) (DIN:06826653)

Baby Paul

Partner

Membership No. 218255 R.K.S.Prasad Satish Kumar Subudhi

Chief Financial Officer Company Secretary

Place : Kochi Place : Hyderabad

Date : June 6, 2024 Date : June 6, 2024

---

Mar 31, 2023

i) Includes guarantee provided by the Company during the year to its wholly owned subsidiary NACL Spec-chem Limited, without charging any commission. The fair value of the gurantee commission is accounted as a deemed capital contribution to the subsidiary. Accordingly ?251 Lakh (March 31, 2022: ?239 Lakh) is accounted as deemed investments and added to the cost of investments held in the subsidiary.

ii) The Company subscribed Compulsory Convertible Debentures ?2,800 Lakh (March 31, 2022: ?3,500 Lakh) [comprising 2,800 (March 31, 2022: 3,500 number)] number of CCD of ^1,00,000 each) during the year.

iii) The Company subscribed Compulsory Convertible Debentures ?Nil (March 31,2022: ?50 Lakh) [comprising Nil (March 31,2022: 50 number)] number of CCD of ^1,00,000 each) during the year.

(i) Unclaimed dividend accounts

If the dividend has not been claimed within 30 days from the date of declaration, the Company is required to transfer the total amount of dividend which remains unpaid or unclaimed to a special account to be opened by the Company with a scheduled bank to be called Unpaid Dividend Account. The unclaimed dividend lying in such account is required to be transferred to the Investor Education and Protection Fund (IEPF), administered by the Central Government after a period of seven years from the date of declaration.

(ii) Margin money / deposit

Amounts in margin money represents deposit with bank against the bank guarantees issued by them.

14.2 Rights, preferences and restrictions attached to equity shares:

The Company has only one class of issued, subscribed and fully paid up equity shares having a face value of each per share. Each holder of equity shares is entitled to one vote per share. The dividend (other than interim dividend) proposed, if any, by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to number of equity shares held by the shareholders.

14.7 Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2015

i) The Company set up the "Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2015" (hereinafter referred to as "ESOS-2015") and earmarked 11,50,000 number of equity shares of ?1 each for issue to employees. The plan was approved in financial year 2015-16 and is administered by the Compensation Committee of the Board of Directors.

ii) Under the ESOS-2015 scheme, options are granted to eligible employees at an exercise price, which shall not be less than face value of the equity shares of the Company. These options vest over a period of one to five years and exercisable by the employees within two years of vesting.

iv) Fair value of shares granted during the year:

Options were priced using Black-Scholes Merton Options pricing model. Where relevant, the expected life used in the model has been adjusted based on management''s best estimate for the effects of non-transferability, exercise restrictions, and behavioural considerations. Expected volatility is based on the historical share price volatility over the past years.

14.7.1 "Nagarjuna Agrichem Limited-Employee Stock Option Scheme-2020"

i) The Company set up the "NACL Industries Limited-Employee Stock Option Scheme-2020" (hereinafter referred to as "ESOS-2020") and earmarked 25,00,000 number of equity shares of each for issue to employees. The plan was approved in financial year 2020-21 and is administered by the Compensation Committee of the Board of Directors.

ii) Under the ESOS-2020 scheme, options are granted to eligible employees at an exercise price, which shall not be less than the face value of the equity shares of the Parent Company. These options vest over a period of one to four years and exercisable by the employees within one year of vesting.

14.8 Allotment of equity shares upon conversion of share warrants:

The Board of Directors and the Shareholders, in their meetings held on August 12, 2020 and September 07, 2020 respectively, approved inter-alia issuance of 5,000,000 share warrants (of face value of ?1 each) on preferential basis to Mrs. K Lakshmi Raju, Promoter (hereinafter referred to as "Investor") in accordance with Section 42 and 62(1)(c) of the Companies Act, 2013 read with Chapter V of SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018. Consequently, the Company allotted 5,000,000 Warrants during the financial year 2020-21 to the aforesaid Investor against receipt of 25% of Issued price of ?39 per Warrant. i.e ?9.75 per Warrant aggregating ?488 Lakh.

During the previous year, warrant holder exercised their options of converting 1,580,000 warrants by submitting the necessary Warrant Exercise Application Form along with paying the balance consideration amount of ^29.25 per warrant (i.e. 75% of the issue price) aggregating ?462 Lakh). Accordingly, the Company has allotted 1,580,000 equity shares in the ratio of one Equity Share for each Warrant exercised, on April 8, 2021.

The total amount aggregating ?463 Lakh has been utilised by the Company before the previous year end.

14.9 No shares have been allotted without payment being received in cash or by way of bonus shares during the period of five years immediately preceding the balance sheet date. No shares have been bought back during the period of five years immediately preceeding the balance sheet date.

Nature of reserves:

(a) General Reserves: General reserve was created through an annual transfer of profits from retained earnings in accordance with applicable regulations. General reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

(b) Capital reserve: This represents capital subsidy received from government in earlier years for promotion of investment in backward areas.

(c) Security premium: Security premium represents the amount received in excess of the face value of the equity shares. The utilisation of the security premium reserve is governed by the relevant provisions of the Companies Act, 2013 ("Act").

(d) Reserve for equity instruments through other comprehensive income: This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off.

(e) Share warrants: This represents the moneys received against the share warrants.

(f) Share Options Outstanding Account: This reserve relates to share options granted by the Company to its employees under its employee share option plans.

(g) Effective portion of cash flow hedge reserve: When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the cash flow hedging reserve. The cumulative gain or loss previously recognised in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the related forecasted transaction.

(h) Retained earnings: Retained earnings represents the Company''s undistributed earnings after taxes.

1. In respect of the year ended March 31, 2023, the Board of directors recommended a final dividend of ?0.25 per share be paid on fully paid equity shares. The recommended equity dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total estimated amount to be paid with respect to dividend is ?497 Lakh.

In respect of the year ended Mar 31,2022, the Board of directors recommended a final dividend of ?0.15 per share be paid on fully paid equity shares, which was approved by the shareholders at the Annual General Meeting held on September 29, 2022. The total amount paid with respect to the final dividend of FY 21-22 in FY 22-23 was ?298 Lakh.

2. FY 2022-23: The Board of Directors in its meeting held on October 21,2022 and on January 31,2023 approved interim dividend of ?0.30 and ?0.15 per Equity Share of ?1 each respectively. These amounts are paid within the financial year 2022-23.

FY 2021-22: The Board of Directors in its meeting held on August 5, 2021, October 29, 2021 and on January 28, 2022 approved interim dividend of ?0.10, ?0.15 and ?0.15 per Equity Share of ?1 each respectively. These amounts are paid within the financial year 2021-22.

Secured by: first ranking pari-passu charge on present and future property, plant and equipments of the Company, second ranking pari-passu charge on present and future stock and book debts of the company and is guaranteed by Smt. K. Lakshmi Raju, Director of the Company.

Loan is denominated in foreign currency - USD 1,109,375 (March 31, 2022: USD 1,996,875) Repayable in 16 quarterly instalments starting from August 2020 and the last installment being payable in May 2024.

Interest rate is determined based on 6 months LIBOR plus 400 basis points and is payable monthly. The same is hedged against variable to fixed rate interest swap contract for a fixed rate of 7.50% p.a. (March 31, 2022: 7.50% p.a.) with RBL Bank Limited.

(b) Loans repayable on demand:

Loans repayable on demand from banks (includes Cash Credit Facilities, Working capital demand loan and packing credit foreign currency facilities, buyers credit availed under non fund based limits) from HDFC Bank Limited, SVC Co-operative Bank Limited, RBL Bank Limited, Karnataka Bank Limited, Shinhan Bank Limited, Axis Bank Limited, Bandhan Bank Limited, Bank of Bahrain and Kuwait B.S.C., SBM Bank (India) Limited, Yes Bank Limited and Kotak Mahindra Bank Limited are secured by way of hypothecation of current assets comprising stock in trade, book debts and stores and spares both present and future. The aforesaid facilities are further secured by second charge on immovable and movable properties, both present and future, ranking pari-passu with other working capital lenders. The facilities availed from the Karnataka Bank Limited are guaranteed by Smt. K. Lakshmi Raju, Director of the Company.

Rate of interest on Rupee loans repayable on demand is in the range of 5.75% to 9.75% p.a. (March 31, 2022: 5.75% to 8.75% p.a.)

(ii) Corporate social responsibility (CSR):

As per Section 135 of the Companies Act, 2013 (''Act), a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The focus areas of Company''s CSR activities are Education, Health & Wellness and Community Engagement. The CSR activities of the Company are in line with the Schedule VII of the Companies Act, 2013. A CSR committee has been formed by the company as per the Act. The funds were utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

a. Gross amount required to be spent by the company during the year is ?133 Lakh (March 31, 2022: ?59 Lakh)

(All amounts in ? Lakh, unless otherwise stated) 31. Contingent liabilities, Guarantee and Capital Commitments A. Contingent Liabilities
S.No. Particulars	As at March 31,2023	As at March 31,2022
(i) Claims against the Company not acknowledged as debts in respect of the matters under dispute:
Excise duty (refer note (a) below)	29	29
Service tax (refer note (b) below)	15	15
Income tax (refer note (c) below)	608	606
Sales tax (refer note (d) below)	94	101
Goods and Service tax (refer note (e) below)	31	31
Export benefits (MEIS) (refer note (f) below)	1,231	1,032
(ii) Others (refer note (g) below)	141	141
Total	2,149	1,955

Transfer pricing:

In accordance with the applicable provisions of the Income Tax Act, 1961, the Company is required to use certain specified methods in assessing that the transactions with the related parties, are carried at an arm''s length price and is also required to maintain prescribed information and documents to support such assessment. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors as prescribed. Based on certain internal analysis carried out, management believes that transactions entered into with the related parties were carried out at arms length prices. The Company is in the process of carrying out the transfer pricing study for the financial year ended March 31, 2023. In opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

Notes:

(a) The Company has disputed various demands raised by excise duty authorities for the Financial years 2004-05 to 2006-07 and

2008- 09 which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(b) The Company has disputed various demands raised by service tax authorities for the Financial years 2006-07 to 2010-11, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(c) The Company has disputed various demands raised by income tax authorities for the assessment years 2004-05 to 2007-08;

2009- 10 and 2016-17 to 2018-19 which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(d) The Company has disputed various demands raised by sales tax authorities for the financial years 2012-13 to 2017-18, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(e) The Company has disputed various demands raised by Goods and Service Tax authorities for the financial year 2017-2018 and 2019-20, which are pending at various stages of appeals. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

(f) The Company has disputed the demands raised by Director general of foreign trade (DGFT) office for the excess exports benefits availed by the company for earlier years and these are pending at appeal stage. The company has also disputed the penalty levied by the Office of the Commissioner of Customs (Adjudication) in respect of the same matter and the appeal is pending before Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.

(g) Other contingent liability majorly pertains to demand for payment of alleged deficit of stamp duty, registration fees and penalty in respect of a sales deed. The Company does not expect the outcome of these proceedings to have a material adverse effect on its financial position.

B. Guarantee

The Company has given guarantee for the term loan availed by the NACL Spec-chem Limited (wholly owned subsidiary) to HDFC

Bank Limited and Axis Bank Limited of ^16,500 Lakh (March 31, 2022: ?8,466 Lakh).

C. Commitments
S.No. Particulars	As at March 31,2023	As at March 31,2022
Estimated amount of contracts, remaining to be executed on capital account and not provided for (net of advance)	283	367
Total	283	367

32. Defined benefit plans

a) Contribution to provident fund and other funds

- Provident fund:

The Company makes provident fund contributions which are defined contribution plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. These contributions are made to the fund administered and managed by the Government of India. The Company''s monthly contributions are charged to the Statement of Profit and Loss in the period they are incurred. Total expense recognised during the year aggregated ?649 Lakh (March 31, 2022: ?564 Lakh).

- Gratuity (funded):

Amount recognised in statement of profit and loss in respect of gratuity ?170 Lakh (March 31,2022: ?122 Lakh).

b) Gratuity

In accordance with the ''Payment of Gratuity Act, 1972'' of India, the Company, provides for Gratuity, a defined retirement benefit plan (the ''Gratuity Plan'') covering eligible employees. Liabilities with regard to such Gratuity plan are determined by an independent actuarial valuation and are charged to the Statement of Profit and Loss for the period determined. The Gratuity fund is administered through a scheme of Life Insurance Corporation of India.

The present value of the defined benefit obligation and the related current service cost and past service cost, were measured using the projected unit credit method. These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. The gratuity plan is funded. The funding requirements are based on the gratuity fund''s actuarial measurement framework set out in the funding policies of the plan and the Company contributes to LIC.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

34. Financial instruments 34.1 Capital management

The Company''s capital management objective is to maximise the total shareholder return by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating. The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Expected contribution to the post employee benefits plan during the next financial year is expected to be ?160 Lakh (March 31, 2022: ?120 Lakh)

The weighted average duration of the defined benefit obligation is 6.62 years (March 31, 2022: 7.97 years)

(c) Compensated absences:

The Company provides compensated absences benefits to the employees of the Company which can be carried forward to future years. Since the compensated absences do not fall due wholly within twelve months after the end of the year in which the employees render the related service and are also not expected to be utilised wholly within twelve months after the end of the year, the benefit is classified as a long-term employee benefit. During the year ended March 31, 2023, the Company has incurred an expense on compensated absences amounting to ?402 Lakh (March 31, 2022: ?213 Lakh). The Company determines the expense for compensated absences basis the actuarial valuation of the present value of the obligation, using the Projected Unit Credit Method.

(i) Borrowings include non-current and current borrowings (Refer Note 16)

(ii) The management assessed that fair value of cash and cash equivalents, trade receivables, other current financial assets, trade payables, current borrowings and other current financial liabilities approximate their carrying amounts largely due to the shortterm maturities of these instruments, and hence these are carried at amortised cost. For non-current borrowings, the valuation model considers the present value of expected payments discounted using the borrowing rate provided by the banks/ financial institutions. The own non-performance risk was assessed to be insignificant.

(iii) Investments (unquoted) are measured at fair value through initial designation in accordance with Ind AS 109.

Transfer between Level 1 and 2:

There have been no transfers from Level 2 to Level 1 or vice-versa in 2022-23 and no transfers in either direction in 2021 -22.

34.4 Financial risk management

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company enters into derivative financial instruments with various counterparties principally, banks with investment grade credit ratings. Foreign exchange forward contracts and interest rate swaps are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, etc. As at March 31, 2023 the mark-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had insignificant impact on the hedge effectiveness assessment for derivatives designated in hedge relationships.

Financial risk factors

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has adequate internal processes to assess, monitor and manage financial risks. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured by the Company''s inability to meet its financial obligations as they become due.

Market risk

The Company is exposed to foreign exchange risk through imports from overseas suppliers in various foreign currencies, exports to customers abroad, bill discounting, buyer''s credit, packing credit. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company''s operations are adversely affected as the rupee appreciates/ depreciates against these currencies.

Foreign currency exposure

The Company monitors and manages its financial risks by analysing its foreign exchange exposures. The Company, in accordance with its Board approved risk management policies and procedures, enters into foreign exchange forward contracts to manage its exposure in foreign exchange rates.

Sensitivity analysis:

For the year ended March 31,2023 and March 31, 2022, every increase / decrease of ?1 in the respective foreign currencies compared to functional currency of the Company would impact profit before tax by ?81 Lakh/ (?81 Lakh) and ?87 Lakh/ (?87 Lakh) respectively and Impact Equity, net of tax by ?61 Lakh/ (?61 Lakh) and ?64 Lakh/ (?64 Lakh) respectively.

Interest rate risk:

The Company draws term loans, working capital demand loans, avails cash credit, foreign currency borrowings including buyer''s credit, packing credit etc. for meeting its funding requirements. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of borrowings having fixed and floating rate of interest. The borrowings are serviced on a timely manner and repayments of the principal and interest amounts are made on a regular basis.

Expected credit loss (ECL):

(i) The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to whom the Company grants credit terms in the normal course of business. The credit period on sale of goods varies with seasons and markets and generally ranges between 30 to 180 days. Before accepting any new customer, the Company assesses the potential customer''s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed annually.

As a practical expedient, the Company uses a provision matrix to determine impairment loss of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. The ECL allowance (or reversal) during the year is recognised in the statement of profit and loss.

Interest rate swap contract:

Under Interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amount. Such contract enables Company to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the issued variable rate debt. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract, and is disclosed below. The average interest is based on the outstanding balances at the end of the reporting period.

Sensitivity analysis:

For the year ended March 31, 2023 and March 31, 2022, every increase / decrease of 1% in the respective interest rate compared to existing rate of interest of the Company would impact profit before tax by ?650 Lakh/ (?650 Lakh) and ?425 Lakh/ (?425 Lakh) respectively and Impact Equity, net of tax by ?486 Lakh/ (?486 Lakh) and ?318 Lakh/ (?318 Lakh) respectively.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, deposits with banks, foreign exchange transactions and other financial instrument. Credit risk is managed through credit approvals, monitoring the creditworthiness and establishing credit limits of customers to which the Company grants credit terms in the normal course of business. The company collects security deposits from its dealer customers which act as security against the outstanding trade receivables from such dealer customers. In the event of default, these security deposits can be adjusted against the uncollectible trade receivables from such dealer customers. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

Other price risks

The Company is exposed to valuation of equity investment risks as the Company''s equity investments are held for strategic rather than trading purposes.

Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company''s principal sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.

39. Leases:

The Company leases office buildings and vehicles. The leases pertains to office buildings and vehicle leases typically run for a period of 3 to 5 years, with an option to renew the lease after that date. Lease payments are renegotiated at renewal date reflect market rentals except for vehicle leases.

The Company has certain leases with lease terms of less than 12 months or with low value. The Company applies short term lease and lease of low value assets recognition exemption for these leases. The incremental borrowing rate for lease liabilities is ranging from 7.62% to 9.67%.

40. Operating Segments:

The Company publishes the standalone financial statements of the Company along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

41. Insurance claim

An Appeal has been filed by the Insurance Company (The Oriental Insurance Company Limited) against the Arbitration Award in favour of the Company, before the Hon''ble High Court of Delhi. Pending final disposal of the above appeal, the Company has filed the Execution Petitions before Hon''ble High Court of Delhi for deposit of awarded amount in Material Damage (MD) Claim of ?1,048 Lakh (includes interest) and Business Interruption Policy claim of ^1,352 Lakh (includes interest) with the Court. With respect to the execution petition filed by the Company in both the cases, the Hon''ble High Court of Delhi has passed an order vide its order dated March 19, 2021 & April 9, 2021 directed the Insurance Company to deposit the awarded amount towards Material Damage claim & Business Interruption Policy respectively together with the interest upto the date of deposit with Court. During the previous year, the amount deposited by the Insurance Company has been released by the Court to the Company after submission of equivalent bank guarantee. As the matter is subjudice and as advised by its legal council, the Company has not recognized the deposit amount received as income and the interest cost, if any in the books of account.

(vii) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

(viii) The Company does not have any charges which are yet to be registered with ROC beyond the statutory period. The Company does not have any satisfaction of charges which are yet to be registered with the ROC beyond the statutory period except for:

Charge Holder name and ID	Amount	Location of Registrar
Bank of Baroda - 90261984	2,040	Hyderabad
Canara Bank - 90247742	604	Hyderabad
ICICI Bank limited - 90262175	150	Hyderabad

43. Additional regulatory information

(i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

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

(iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries."

(iv) 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:

(a) 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

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(v) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

The satisfaction of above charges is pending for registration due to procedural delays at the ROC Hyderabad and the Company is currently following up with the ROC to complete the registration of such satisfaction.

(ix) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

(x) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was obtained.

(xi) The title deeds of all the immovable properties, (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.

(xii) The Company has not revalued any of its property, plant and equipment (including right-of-use-assets) and intangible assets during the year.

(xiii) The Company does not have any transactions with companies which are struck off.

(xiv) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

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Mar 31, 2018

Note:

Exceptional items pertain to the net effect of insurance claim received against a fire accident that took place in prior year. The Company has contested the claim amount paid by the Insurer and initiated arbitration proceedings seeking additional claim for damages incurred.

1. Transition to Indian Accounting Standards (Ind AS)

These standalone financial statements of NACL Industries Limited (formerly Nagarjuna Agrichem Limited) year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the year ended March 31, 2018, be applied consistently and retrospectively for all fiscal years presented. All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous GAAP as at the transition date have been recognized directly in equity at the transition date:

The effect of the Company’s transition to Ind AS is summarized as follows:

(i) Transition election

(ii) Reconciliation of equity as previously reported under Indian GAAP to Ind AS

(iii) Reconciliation of profit or loss as previously reported under Indian GAAP to Ind AS

(iv) Adjustments to the statement of cash flows

(i) Transition elections

The Company has prepared the opening Balance Sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and optional exemptions availed by the Company as detailed below:

a. Share based payments:

In accordance with Ind AS transitional provisions, Ind AS 102 Share-based payment has not been applied to employee stock options that have vested before the transition date.

b. investments in subsidiaries and associate:

In accordance with Ind AS transitional provisions, the Company opted to consider previous GAAP carrying value of investments as deemed cost on transition date for investments in subsidiaries and associate in separate financial statement.

c. Designation of equity / preference investments at FVTOCI

The Company has designated investment in equity / preference share capital of the following entities at FVTOCI basis of facts and circumstances that existed at the transition date:

- New India Co-operative bank limited

- SVC co-operative bank limited

- Nagaarjuna Shubho Green Technologies Private Limited”

d. Derecognition of financial assets and financial liabilities:

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.

e. Business combinations

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to business combinations that occurred before the date of the transition.

Notes:

a. Ind AS 101 allows an entity to measure property, plant and equipment on the transition date at its fair value or previous GAAP carrying value (book value) as deemed cost. The Company has elected to measure land at fair value and use these fair values as deemed cost on the date of transition. As a result of revaluation of land, the increase in value of property, plant and equipment, has been adjusted to opening reserves ('' 2,066 lakhs).

b. Under the previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, the Company has designated such investments at FVTOCI. Ind AS requires such investments to be measured at fair value and the gains/(losses) are recognized through Other Comprehensive Income (FVTOCI) as a separate component of equity. Accordingly, investment in Nagaarjuna Shubho Green Technologies Private Ltd has been fair valued and the impact of the same taken to opening reserves as a separate component of equity.

c. Under Previous GAAP, loss provision for trade receivables was created on incurred loss based on credit risk assessment of each customer. Under Ind AS, these provisions are based on Expected Loss model which factor the credit risk as well as payment delay risk. As a practical expedient, the Company has evaluated a matrix based approach based on past trends to arrive at the provision matrix for receivables outstanding as at each period end. Accordingly, the provision resulting from such evaluation has been adjusted to opening reserves (for receivables outstanding as at April 01, 2016) and the statement of profit and loss (receivables as at March 31, 2017).

d. Under previous GAAP, transaction costs incurred in connection with borrowings are charged upfront to statement of profit and loss. Under Ind AS, transaction costs are included in initial recognition amount of financial liability and charged to statement of profit and loss based on effective interest method.

e. Under previous GAAP, a liability is recognized in the period to which the dividend was recommended by the Board of Directors, even though the dividend may be approved by the shareholders subsequent to the reporting date. Under Ind AS, liability for dividend is recognized in the period in which the obligation to pay is established i.e. when declared by the members in a general meeting. The effect of this change has been adjusted to opening reserves, there is no impact on statement of profit and loss.

f. Under the previous GAAP, deferred sales tax liability is recorded at transaction value. Under Ind AS, the deferred sales tax liability is an incentive received by the Company from the government under a sales tax deferral scheme. Since the loan is interest-free in nature, its face value or the transaction price is not considered to represent fair value. The Company considered that the use of a present value technique based on the cash flows payable under the scheme is an appropriate method of determining fair value. The difference between the fair value of the loan and the amount payable represents the ‘other component’ which is considered to be in the nature of a government grant since it represents an incentive received by the Company from the government. This is accounted for in accordance with Ind AS 20.

g The Company recognizes costs related to the post-employment defined benefit plan on an actuarial basis both under Indian GAAP and Ind AS. Under Indian GAAP, the entire cost including actuarial gains and losses are charged to statement of profit and loss. Under Ind AS, remeasurements are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI.

h Consequential deferred tax on all the above adjustments.

(iv) Effect of adoption of Ind AS on the statement of cash flows for the year ended March 31, 2017:

Following is the impact on cash flows on transition from Previous GAAP to Ind-AS.

Notes:

(a) The Company has disputed various demands raised by excise duty authorities for the assessment years 2005-06 to 2009-10, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.

(b) The Company has disputed various demands raised by service tax authorities for the assessment years 2012-13 to 2017-18, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.

(c) The Company has disputed various demands raised by income tax authorities for the assessment years 2004-05 to 2009-10, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.

(d) The Company has disputed various demands raised by sales tax authorities for the assessment years 2009-10 to 2016-17, which are pending at various stages of appeals. The Company is confident that these appeals will be decided in its favour.

(e) Guarantees given to bank for guarantees given by bank to third party in ordinary course of business.

(f) Other contingent liability majorly pertains to demand for payment of alleged deficit of stamp duty, registration fees and penalty in respect of a sales deed. The Company is confident that the case will be decided in its favour.

2. Financial Instruments

36.1 Capital management

The Company’s capital management objective is to maximize the total shareholder return by optimizing cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/ enhance credit rating. The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

3 Fair Value by hierarchy

Valuation technique and key inputs Level 1

Quoted prices (unadjusted) in an 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 assets or liabilities that are not based on observable market data (unobservable inputs).

Quantitative disclosures of fair value measurement hierarchy-Level 3 for financial instruments:

The fair values of the unquoted equity shares have been estimated using a Discounted Cash Flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, earnings growth, discount rate, and probabilities of the various estimates within the range used in management’s estimate of fair value for these unquoted equity investments.

Valuation inputs and relationships to fair value:

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements.

4.Financial risk management Financial risk factors

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company has adequate internal processes to assess, monitor and manage financial risks. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The liquidity risk is measured by the Company’s inability to meet its financial obligations as they become due.

Market risk

The Company is exposed to foreign exchange risk through imports from overseas suppliers in various foreign currencies, exports to customers abroad, bill discounting, buyer’s credit, packing credit. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company’s operations are adversely affected as the rupee appreciates/ depreciates against these currencies.

Sensitivity analysis:

For the year ended March 31, 2018 and March 31, 2017, every increase / decrease of '' 1 in the respective foreign currencies compared to functional currency of the Company would impact profit before tax by ('' 74 lakhs)/ '' 74 lakhs and ('' 16 lakhs)/ '' 16 lakhs respectively.

Interest rate risk:

The Company draws term loans, working capital demand loans, avails cash credit, foreign currency borrowings including buyer’s credit, packing credit etc. for meeting its funding requirements. The Company manages the interest rate risk by maintaining appropriate mix/portfolio of borrowings having fixed and floating rate of interest. The borrowings are serviced on a timely manner and repayments of the principal and interest amounts are made on a regular basis.

Credit risk :

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, deposits with banks, foreign exchange transactions and other financial instrument. Credit risk is managed through credit approvals, insurance of trade receivables within the aging of 90 days to 180 days, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade and other receivables and investments.

Other price risks :

The Company is exposed to valuation of equity investment risks as the Company’s equity investments are held for strategic rather than trading purposes.

Liquidity risk management :

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company’s principal sources of liquidity are cash & bank balances, credit facilities and cash generated from operations.

The Company has unutilized credit limits from the banks of Rs, 5,929 lakhs, Rs, 3,739 lakhs and Rs, 1,470 lakhs as of March 31, 2018, March 31, 2017 and April 1, 2016 respectively.

The working capital position of the Company:

5. Leases:

The Company has entered into certain operating lease agreements and an amount of Rs, 315 lakhs (2017: Rs, 302 lakhs) paid under such agreements is charged to the statement of profit and loss. These leases are generally cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by such agreements.

6. Segment Reporting:

As the Company’s business activities fall within a single primary segment viz-a-viz “manufacture of products -pesticides, insecticides etc.), therefore the disclosure requirements of Indian Accounting Standard 108 - Operating Segments are not applicable. The Company sells its products mainly within India where the conditions prevailing are uniform. Since the sales outside India are below the threshold limit, no separate geographical segment disclosure is considered necessary.

7. Change in the name of Company :

During the year, the Company changed its name from Nagarjuna Agrichem Limited to NACL Industries Limited with effect from September 4, 2017.

8. Approval of financial statements :

The financial statements are approved for issue by the Board of Directors on May 19, 2018.

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Mar 31, 2017

b) Rights, Preferences and Restrictions attached to Equity shares

The Company has only one class of Equity shares having a par value of Rs. 1/- per share. Each holder of Equity shares is entitled to one vote per share

In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares held by the shareholders.

c) The Board of Directors in the meeting held on 27^th May,2017 has recommended a final dividend of Re.0.125 per Equity Share of Re.1 each, subject to the approval of members in the ensuing Annual General Meeting.

d) Shares in the Company held by the Holding Company and Other Share holders holding more than 5%

Notes :

a) Term Loan availed from State Bank of India is secured by way of first charge on fixed assets of the company and second charge on current assets of the company along with other working capital lenders

b) Working Capital Term Loans availed from New India Co-operative Bank Ltd are secured by way of first charge on fixed assets of the company and other movable assets on pari passu basis with other term loan lendors.

c) Term Loan availed from SVC Co-Op Bank Ltd is secured by way of first charge on fixed assets of the company and Second charge on current assets to be shared with other term lenders .

d) Corporate Loan from SVC Co-Operative Bank Ltd. outstanding at Rs.2667 lakhs included in Term Loans from Banks above, is guaranteed by Smt. K.Lakshmi Raju a Director of the company.

e) All Credit facilities extended by State Bank of India are further secured by pledge of Promoter Shareholding equal to 30% of the Company’s equity.

g) Deferred payment liabilities.

Vide Revised order No.10/1/9/0023/0387/ID dated 31.01.2001 the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Acephate and Profenofos for a period of fourteen years commencing from 28.09.1997 for Acephate and from 23.02.2000 for Profenofos subject to a maximum of Rs.1028.55 Lacs. The Sales Tax deferred in a year is payable at the end of 14th year without interest. Since financial year 2006-07 the company has decided not to avail the Sales Tax deferment. First repayment commenced from 25.09.2013 as prescribed in the order. Based on the Sales Tax Returns the sales tax so deferred aggregates to Rs.90.36 Lacs as at the balane sheet date. (Previous Year Rs. 165.41 Lacs).

* Loans Repayable on Demand from Banks (along with Non Fund Based Limits of Letters of Credit and Bank Guarantees) from the Consortirum i.e. State Bank of India, IDBI Bank Ltd, HDFC Bank Ltd & SVC Co-Operative Bank Ltd. are secured by way of hypothecation of current assets comprising stock in trade, book debts and stores and spares, both present and future. The aforesaid facilities are further secured by second charge on the company’s immovable and hypothecation of movable properties, both present and future, ranking pari passu with other Working Capital Lenders. The facilities sanctioned by State Bank of India, IDBI Bank Ltd, HDFC Bank Ltd are guaranteed by Sri K.S.Raju. The facilities sanctioned by SVC Co-Operative Bank Ltd. are guaranteed by Smt.K.Lakshmi Raju a Director of the company.

Note:

a) The Company has not received confirmations for the current year about the status under The Micro, Small and Medium Enterprises Development Act, 2006, from various creditors, consequent to which, the classification of dues to such Enterprises can not be compiled as at the Balance Sheet date

Note:

a) As at the date of this Balance Sheet, there are no amounts of Unclaimed dividends due for remittance to the Investor Education & Protection Fund.

1. Insurance Claim:

The company has recognized as income in the accounts the entire amount of claims received of Rs 45.65 Cr being the aggregate of insurance proceeds of Rs 32.44 Cr received during the year, Rs 10.00 Cr being the on-account insurance proceeds received and credited to Claims Receivable account and Rs 3.21 Cr being the sale proceeds of scrap credited to claims receivable account, in earlier years.

Consequently, the company has also recognized as expenses in the accounts Rs 20.08 Cr comprising fully damaged assets written off Rs 14.16 Cr, Work-in-progress written off Rs.1.31 crs and other expenses of Rs.0.66 crs arising out of the said accident and accounted under claims receivable so far. Further damages arising from the said accident assessed during the year at Rs.3.95 crs have also been expensed in these accounts. The net effect of Rs.25.57 crs has been disclosed as Exceptional Item.

The Company has contested the claim amount paid by the Insurance Company and initiated the Arbitration proceedings.

2. Borrowing Cost

Borrowing cost capitalized during the year is nil (Previous year nil)

37. Related Party Transactions (Disclosure as required by AS-18 “Related Party Disclosures) :

A. Names of related parties and description of relationship.

3. The remuneration has been paid to the Managing Director in accordance with the Sections 196, 197and 198 and other applicable provisions of The Companies Act, 2013

4. Employee Benefit Obligations

A. Defined Contribution Plan:

The company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Contribution to defined contribution plan is recognized and charged off for the year as follows:

The obligation of Leave Encashment is recognized based on actuarial valuation made by an independent actuary at the end of the financial year.

C) “Nagarjuna Agrichem Ltd.-Employee Stock Option Scheme-2015”

i) The “Nagarjuna Agrichem Ltd.-Employee Stock Option Scheme-2015” (hereinafter referred to as “ESOS-2015”) was approved by the Shareholders in the 28th Annual General Meeting of the Company held on 28th September, 2015 and is being administered by the Compensation Committee of the Board of Directors, set up for the purpose

ii) Under the ESOS-2015, 11,50,000 options have been reserved to be issued to the eligible employees, with each option conferring a right upon such employee to apply for one equity share of Re.1/- each of the Company. The options granted under the Scheme would vest after a minimum period of one year from the date of grant and may spread over a maximum period of five years after the aforesaid one year. The options granted to the employees would be capable of being exercised within a period, of two years from the date of vesting;

iii) Pursuant to ESOS-2015, the Company, during the year 2015-16, has granted 9,30,000 (Nine Lakhs Thirty Thousand Only) options with a vesting period spread over maximum period of five years commencing after the aforesaid one year from the date of grant. The exercise price of Rs. 8/- (Rupees Eight Only) per share being less than the closing market price prevailing on the date prior to the date of grant, there arises deferred compensation cost which is to be suitably amortized over the period during which the vested options are to be exercised, in accordance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, and the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India. Accordingly an amount of Rs.21.08 lakhs has been accounted in the books of account as deferred compensation cost.

iv) Summary of Stock Option

5. Disclosure on Specified Bank Notes (SBNs

Specified Bank Notes (SBN) and other denomination notes on hand as defined in the MCA notification G.S.R. 308(E) dated 31 March, 2017 on the details of SBN held and transacted during the period from 8 November, 2016to 30 December, 2016

6. Balances in the accounts of various debtors, loans and advances and creditors are subject to reconciliation and confirmation

7. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year’s presentation/ classification

8. Figures are rounded off to the nearest thousands.

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Mar 31, 2016

b) Rights, Preferences and Restrictions attached to Equity shares

The Company has only one class of Equity shares having a par value of Rs. 1/- per share. Each holder of Equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares held by the shareholders.

Notes :

a) Term Loan availed from State Bank of India is secured by way of first charge on fixed assets of the Company and second charge on current assets of the Company along with other working capital lenders.

b) Working Capital Term Loans availed from New India Co-operative Bank Ltd are secured by way of first charge on fixed assets of the Company and other movable assets on pari passu basis with other term loan lendors.

c) Term Loan availed from SVC Co-Op Bank Ltd. is secured by way of first charge on fixed assets of the Company and Second charge on current assets to be shared with other term lenders .

d) Corporate Loan from State Bank of India outstanding at Rs. 250 lakhs included in Term Loans from Banks above, is guaranteed by Sri K.S. Raju a Director of the Company.

e) Corporate Loan from SVC Co-Operative Bank Ltd. outstanding at Rs. 3000 lakhs included in Term Loans from Banks above, is guaranteed by Smt. K. Lakshmi Raju a Director of the Company.

f) All Credit facilities extended by State Bank of India are further secured by pledge of Promoter Shareholding equal to 30% of the Company''s equity.

h) Deferred Payment Liabilities

Vide Revised order No.10/1/9/0023/0387/ID dated 31.01.2001 the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Acephate and Profenofos for a period of fourteen years commencing from 28.09.1997 for Acephate and from 23.02.2000 for Profenofos subject to a maximum of Rs. 1028.55 Lacs. The Sales Tax deferred in a year is payable at the end of 14th year without interest. Since financial year 2006 07 the Company has decided not to avail the Sales Tax deferment. First repayment commenced from 25.09.2013 as prescribed in the order. Based on the Sales Tax Returns the sales tax so deferred aggregates to Rs. 165.41 Lacs as at the balane sheet date. (Previous Year Rs. 230.79 Lacs).

1. Employee Benefit Obligations:

A. Defined Contribution Plan:

The Company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Contribution to defined contribution plan is recognized and charged off for the year as follows:

C. Nagarjuna Agrichem Ltd.-Employee Stock Option Scheme-2015”

i) The “Nagarjuna Agrichem Ltd.-Employee Stock Option Scheme” (hereinafter referred to as “ESOS-2015”) was approved by the Shareholders in the 28th Annual General Meeting of the Company held on 28th September, 2015. The scheme is to be administered by the Compensation Committee of the Board of Directors, set up for the purpose.

ii) Under the Scheme, 11,50,000 options have been reserve0d to be issued to the eligible employees, with each option conferring a right upon such employee to apply for one equity share of Re.1/- each of the Company. The options granted under the Scheme would vest after a minimum period of one year from the date of grant and may spread over a maximum period of five years after the aforesaid one year. The options granted to the employees would be capable of being exercised within a period, commencing from the date of vesting and shall expire on completion of two years from the date of vesting;

iii) Pursuant to ESOS-2015, the Company has, during the year, granted 9,30,000 (Nine Lakhs Thirty Thousand Only) options with a vesting period spread over maximum period of five years commencing after the aforesaid one year from the date of grant. The exercise price of Rs. 8/- (Rupees Eight Only) per share being less than the closing market price prevailing on the date prior to the date of grant, there arises deferred compensation cost which is to be suitably amortized over the period during which the vested options are to be exercised, in accordance withSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, and the Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India.

2. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year''s presentation/classification.

3. Figures are rounded off to the nearest thousands.

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Mar 31, 2015

1. During the year under review NACL entered into a marketing agreement for Solar Products in India with a foreign Company. Pending approvals from Government the said foreign Company unilaterally violated the contracted terms and dispatched three unauthorized consignments of unapproved solar products of a stated value of USD 2,803,625. NACL has refused to accept the said consignments and has been legally advised that there would not be any liability towards the same.

2. Based on the provisional insurance claim made by the Company in connection with the damages to the assets in the fire accident on 30.06.2012 at Srikakulam plant, the insurance Company has made an interim on-account payment of Rs. 10 crores. The Company has credited the same to the claims receivable account which, at the beginning of the year stood at Rs. 19.28 crores comprising Rs. 14.16 crores being the written down value of the damaged fixed assets, Rs. 5.12 crores being the estimated value of damaged inventories and others. The claim by the Company under the reinstatement value basis with the insurance Company continues to be under process as on 31.03.2015.

Pending final assessment of the damage to the partially damaged assets, the value if any to be de-capitalised therefrom, continues to be included in the gross block as on 31.03.2015.

Necessary adjustments in the accounts and the financial impact if any in respect of the aforesaid will be made on completion of final assessment.

3. Borrowing Cost

Borrowing cost capitalized during the year is nil (Previous year Rs. 254.51 Lacs

4. Minimum remuneration, in accordance with the provisions of Schedule V to the Companies Act, 2013, has been paid to the Managing Director, in the absence of Profits for the year.

5. Exceptional Item during the year is NIL (previous year amount Rs. 330.56 lakhs - Loss on Sale of Wind Mill Undertaking)

6. Provision has been made during the year for Minimum Alternate Tax (MAT) in accordance with the provisions of The Income Tax Act, 1961. As a prudent measure MAT Credit in respect of the said provision for the current year has not been recognized and will be reviewed and recognized at the appropriate time in subsequent years.

7. Employee Benefit Obligations

A. Defined Contribution Plan:

The Company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

B. Defined Benefit Plan:

Liability for retiring gratuity as on March 31, 2015 is Rs. 411.65 Lacs (as on March 31, 2014 – Rs. 416.21 Lacs) of which Rs. 300.73 Lacs (as on March 31, 2014- Rs. 292.01 Lacs) is funded with Life Insurance Corporation of India the balance is included in provision for Gratuity. Liability for Gratuity has been actuarially determined and provided in the books. The details of the Company's post-retirement benefit plans for its employees are given below which is certified by the actuary.

8. Balance of debtors, loans and advances and creditors are subject to reconciliation and confirmation.

9. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year's presentation/classifi cation.

10. Figures are rounded off to the nearest thousands.

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Mar 31, 2014

1. Corporate Information

NAGARJUNA AGRICHEM LTD, is a Public Limited Company listed with Bombay Stock Exchange. It is part of the Nagarjuna group based at Hyderabad. The Company is in the business of Crop Protection and manufactures both Technicals (Active Ingredient -AI) and Formulations. It manufactures all kinds of Pesticides, Insecticides, Acaricides, Herbicides, Fungicides and other Plant Growth Chemicals. The Company''s Formulation Business is mainly in the Indian Market and sells through its large retail dealer network of nearly 11,000 dealers, spread across India. The Company has an impressive range of Branded Formulations. It also exports Technicals and Formulations and does toll Manufacture for various Multinational Companies.

2. Commitments/ Contingent Liabilities:

Sl. As at 31.03.2014 As at 31.03.2013 Particulars No. Rs.in Lakhs Rs.in Lakhs

a. Commitments/ Contingent Liabilities

(i) Letters of Credit 6,797.91 4,119.62

(ii) Counter Guarantees 414.01 451.09

b. Claims against the Company not acknowledged as debts in respect of

(i) Disputed Excise Duty, Service Tax Demands 23.41 27.96 (Net of payments made under protest Rs.9.11 Lakhs)

(ii) Disputed Income Tax Demands - - (Net of payments made under protest Rs.430.40 Lakhs)

(iii) Disputed SalesTax Demands - - (Net of payments made under protest Rs.8.51 Lakhs)

c. Others 239.73 244.71

d. Estimated amount of contracts, remaining to be executed on Capital 1,453.09 899.59 account and not provided for (Net of advance)

3. Borrowing Cost

Borrowing cost incurred during the year for acquisition of assets aggregated to Rs.254.51 Lakhs (Previous year Rs.13.05Lakhs)

4. In compliance with clause 40A of the Listing Agreement read with relevant Securities & Exchange Board of India''s (SEBI) circulars with regard to Minimum Public Shareholding in a listed entity, pursuant to the approval by the Shareholders in the Extra-ordinary General Meeting held on 22nd May, 2013, the Company has allotted 69,29,938 Equity Shares of Rs.1/- each on 03rd June, 2013 as Bonus shares by way of capitalisation of Securities Premium Account, to Public Shareholders only (to the exclusion of Promoter Shareholders).

5. There was a fire incident on 30.06.2012 in Block-5 of the Company''s Srikakakulam plant. The Company had made a provisional assessment of the loss in the said incident and as per the terms of the insurance policy and duly lodged provisional claims with the Insurance Company covering the totally damaged assets, partially damaged assets, damaged inventories and other covered risks.

Accordingly in the books of account, the gross block value of the totally damaged assets aggregating to Rs.29.05 crores, was de-capitalised and its written down value of Rs.14.16 crores was included under "claim receivable" from the Insurance Company in the financial statement for the year ended 31.03.2013 and continues as such as on 31.03.2014.

Pending completion of the final assessment of damage to the partially damaged assets, the value if any to be decapitalised therefrom, continues to be included in the gross block as on 31.03.2014. On completion of the final assessment, appropriate treatment in the books of account will be made to the value of these assets.

The estimated value of the damaged inventories and other claims aggregating to Rs.4.56 crores was also included under "claim receivable" from the Insurance Company in the financial statements for the year ended 31.03.2013 and continues as such as on 31.03.2014.

The provisional claims made with the Insurance Company continue to be under process as at 31.03.2014. The Regional Claims Committee of the Insurance Company, has recommended for approval of its head office, for an on account interim payment towards the Company''s claims.

Necessary adjustments in the accounts and the financial impact if any in respect of the aforesaid will be made on completion of final assessment.

6. Related Party Transactions:

A. Names of related parties and description of relationship:

Sl. Relationship Party No.

1. Subsidiary Company Nagarjuna Agrichem (Australia) Pty Limited, Australia, LR Research Laboratories Pvt.Ltd.

2. Holding Company KLR Products Limited (Formerly GSR Products Limited)

3. Associate Nasense Labs Pvt.Ltd. (Formerly USP Organics Pvt Ltd.)

4. Key Management Personnel (KMP) Mr.V.Vijay Shankar, Managing Director

5. Enterprises over which Key Managerial Personnel are able to exercise significant influence

Indo International Fertilizers Ltd. Shubho-Tech Pvt. Ltd.

6. a) Individuals who, indirectly have control on the voting power in the company.

b) Relatives of (a) above

Mrs.K Lakshmi Raju, Director Mr.K.S.Raju (Father)

7. Enterprises under the significant influence of persons having significant influence over this company

Nagarjuna Fertilizers & Chemicals Ltd. Bhagiradha Chemicals & Industries Ltd.

7. Employee Benefit Obligations A. Defined Contribution Plan:

The Company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

B. Defined Benefit Plan:

Liability for retiring gratuity as on March 31, 2014 is Rs.416.21 Lakhs (as on March 31, 2013 - Rs.319.33 Lakhs) of which Rs.292.00 Lakhs (as on March 31, 2013- Rs.279.21 Lakhs) is funded with Life Insurance Corporation of India the balance is included in provision for Gratuity. Liability for Gratuity has been actuarially determined and provided in the books. The details of the Company''s post-retirement benefit plans for its employees are given below which is certified by the actuary.

8. Balance of debtors, loans and advances and creditors are subject to reconciliation and confirmation.

9. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year''s presentation/classification.

10. Figures are rounded off to the nearest thousands.

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Mar 31, 2013

1. Corporate Information

NAGARJUNA AGRICHEM LTD, is a Public Limited Company listed with Bombay Stock Exchange. It is part of the the Nagarjuna Group based at Hyderabad. The Company is in the business of Crop Protection and manufactures both Technicals (Active Ingredient -AI) and Formulations. It manufactures all kinds of pesticides, insecticides, acaricides, herbicides, fungicides and other plant growth chemicals. The Company''s Formulation Business is mainly in the Indian Market and sells through it''s large retail dealer network of nearly 13000 dealers, spread across India. The Company has an impressive range of branded Formulations. It also exports Technicals and Formulations and does Toll manufacture for various Multinational Companies.

2. Commitments/ Contingent Liabilities

As at 31.03.2013 As at 31.03.2012 Sl. No. Particulars Rs. In Lakhs Rs.In Lakhs

a. Commitments/ Contingent Liabilities

(i) Letters of Credit 4119.62 6458.55

(ii) Counter Guarantees * 451.09 222.20

b. Claims against the Company not acknowledged as debts in respect of

(i) Excise Duty, Service Tax Demands - Company has 27.96 24.83 appealed against orders raised the demands

(ii) Income Tax Demands - Company has appealed against - 73.21 orders raised the demands. (Net of payments made under protest)

c. Estimated amount of contracts, remaining to be 899.59 982.09 executed on Capital account and not provided for (net of advance)

d. Others 244.71 250.78

3. Borrowing Cost

Borrowing Cost incurred during the year for acquisition of assets aggregated to Rs.13.05 Lakhs (Previous year Rs.10.54 Lakhs)

4. In compliance with the requirement of clause 40A of the Listing Agreement to raise public shareholding of the Company to not less than 25%, the Board of Directors of the Company at a meeting held on 27th April, 2013, recommended issue of bonus shares only to public shareholders (otherthan Promoters) of the Company in the ratio of 3 equity shares for every 14 equity shares held by them, which is subject to the approval of the Shareholders in the ensuring EGM to be held on 22nd May, 2013.

5. The Management has made a provisional assessment of the loss in fire incident in Block 5 at Srikakulam. The Company has lodged provisional claim with the Insurance Company covering the totally damaged assets and partially damaged assets. In addition, claim is made for damaged inventories and other risks covered as per the terms of the insurance policies.

The gross block value of the totally damaged assets, as per the books of account, aggregating to Rs.29.05 Crores, has been de-capitalised and included in the provisional claim receivable from the Insurance Company.

In the case of partially damaged assets, the Company has made a claim with Insurance Company. Pending completion of the repairs and final assessment, the value of the partially damaged assets continues to be included in the gross block.

The estimated value of the damaged inventories of Rs.4.46 Crores is exhibited under provisional claims receivable from the Insurance Company.

The provisional claims made with the Insurance Company are under process and on completion of final assessment and its acceptance, necessary adjustments in the accounts and the financial impact if any will be accounted.

The obligation of Leave Encashment is recognized based on actuarial valuation made by an independent actuary at the end of the financial year.

6. Balance of Debtors, Loans and Advances and Creditors are subject to reconciliation and confirmation.

7. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year''s presentation/classification.

8. Figures are rounded off to the nearest thousands.

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Mar 31, 2012

Notes :

a) The Term Loans (except Term Loan for Wind Energy project) availed from State Bank of India, IDBI Bank Ltd & HDFC Bank Ltd are secured by way of equitable Mortgage by deposit of Title Deeds of the Company's immovable properties both present and future and by way of first charge of all Fixed Assets of the Company as a primary security and hypothecation of movable properties of the Company ranking pari passu and borrowings from State Bank of India and IDBI Bank Ltd are further secured by a second charge on the current assets of the Company consisting of stock in trade, book debts, stores and spares.

b) Term Loan availed from State Bank of India for Wind Power project is secured by way of mortgage by deposit of Title Deeds of the project's immovable properties and

by way of first charge of all project fixed assets as a primary security.

c) Working Capital Term Loan availed from New India Co-operative Bank Ltd is secured by way of first charge on Company's fixed assets including other movable assets on pari passu basis.

d) Term Loans from Banks (except Term Loan from HDFC Bank Ltd & Corporate Loan from State Bank of India and Working Capital Term Loan from New India Co-operative Bank Ltd availed during the FY 2009-10) and Working Capital Loans from Banks are personally guaranteed by Sri K.S. Raju, a Director of the Company.

e) Terms of Repayments are given below:

i) Loan taken from HDFC Bank is repayable in 12 Quarterly Installments of Rs. 200 Lakhs each. commencing from August 2010; Interest Rate @12.56%

ii) Loan taken from IDBI Bank is repayable in 54 monthly Installments of Rs. 55.55 Lakhs each commencing from January, 2011; Interest Rate 14.25%

iii) Loan taken from SBI Corporate Term Loan is repayable in 8 Quarterly Installments of Rs. 250 Lakhs each. commencing from June, 2010; Interest Rate 15.00% and Outstanding Balance as on 31st March 2012 Rs. Nil.

iv) Loan taken from New India Working Capital Term Loan is repayable in 5 yearly installments of Rs. 480 Lakhs each. commencing from March, 2011; Interest Rate 11%

v) Loan taken from SBI Term Loan-Wind Power Project is repayable in 24 quarterly Instalments of Rs. 90 Lakhs each commencing from September, 2011; Interest Rate 13.75%

f) Deferred Payment Liabilities.

i) Sales Tax Deferment: Vide order No.10/1/5/0564/0696 dated 26th April, 1995 the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Monocrotophos for a period of Ten Years commencing from 1.7.1994; subject to a maximum of Rs.1330.27 Lakhs. Based on the Sales Tax Returns, the sales tax so deferred aggregates net of repayments to Rs.147.99 Lakhs. (Previous Year Rs. 262.85 Lakhs). The repayment of deferred Sales Tax has commenced from July, 2004 as prescribed in the said order.

ii) Further vide Revised order No.10/1/9/0023/0387/ ID, dated 31.01.2001, the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Acephate and Profenofos for a period of fourteen years commencing from 28.09.1997 for Acephate and from 23.02.2000 for Profenofos, subject to a maximum of Rs.1028.55 Lakhs. The Sales Tax deferred in a year is payable at the end of 14th Year without interest. First payment will commence from 25.09.2013 as prescribed in the order. Since financial year 2006-07, the Company has decided not to avail the Sales Tax deferment and opted to pay the Sales Tax henceforth. Based on the Sales Tax Returns, the Sales Tax so deferred aggregates to Rs. 293.73 Lakhs. (Previous Year Rs. 301.62 Lakhs).

* Cash Credits, Working Capital Demand Loan including Non Fund Based Limits of Letters of Credit and Bank Guarantees from State Bank of India, IDBI Bank Ltd & HDFC Bank Ltd and Corporate Loan availed from State Bank of India are secured by way of hypothecation of current assets comprising of stock in trade, book debts and stores and spares, both present and future. The aforesaid facilities are further secured by second charge of the Company's immovable and hypothecation of movable properties, both present and future, ranking pari passu with the Term Loans.

Note: a) Out of the said amount Rs. 249.82 Lakhs (Previous year Rs. 114.32 Lakhs) pertains to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Developmenent Act, 2006 based on the information available with the Company. There is no interest payable to such parties as at 31st March 2012. (March 31, 2011: Rs. Nil)

b) Dues to Micro and Small Industrial Undertakings, exceeding 45 days - Rs. 52.69 Lakhs (Previous year - Rs. 24.88 Lakhs)

Note: a) The Company has been regularly transferring Unclaimed Dividend to the Investor Education and Protection Fund after the expiry of the prescribed period. For current year the Company is yet to receive full information from some Banks. Pending receipt of such information the Company is in process of reconciling the Unclaimed Dividend Account.

Note No. 1 :

Borrowing Cost incurred during the year for acquisition of assets aggregated to Rs. 10.54 Lakhs (Previous year Rs. 172.93 Lakhs)

Note No. 2 :

During the year, the Company has incorporated a Wholly Owned Subsidiary, limited by shares viz. LR Research Laboratories Pvt. Ltd. under the Companies Act, 1956. The Company has also a Wholly Owned Subsidiary in Australia viz. Nagarjuna Agrichem (Australia) Pty. Limited. As operations are yet to commence in these Companies, no consolidation of Financial Statements is required.

Note No. 3 : Current Tax

It is decided by the Management that, even though the Wind Energy Business is entitled for deduction u/s-80 IA for the FY 2010-11, (AY 2011-12) would not be treated as the initial assessment year.

For the year, the Company is obliged to pay current tax of Rs. 285.10 Lakhs under the MAT provisions of Section - 115JB of Income Tax Act, 1956. At this stage, Management is of opinion that there is no virtual certainty to recognize MAT Credit entitlement as an asset for the current year as per the Guidance Note issued by ICAI.

Note No. 4 : Employee Benefit Obligations: A. Defined Contribution Plan:

The Company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

Contribution to Defined Contribution Plan is recognized and charged off for the year as follows:

B. Defined Benefit Plan:

Liability for retiring gratuity as on March 31, 2012 is Rs. 269.22 Lakhs (as on March 31, 2011 - Rs. 248.18 Lakhs) of which Rs. 249.19 Lakhs (as on March 31, 2011-Rs. 226.16 Lakhs) is funded with Life Insurance Corporation of India/ ING Vysya Life Insurance Company Private Limited and the balance is included in provision for Gratuity. Liability for Gratuity has been actuarially determined and provided in the books. The details of the Company's post-retirement benefit plans for its Employees are given below which is Certified by the Actuary.

Note No. 5 :

Balance of Debtors, Loans and Advances and Creditors are subject to Reconciliation and Confirmation.

Note No. 6 :

Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year's presentation/classification.

Note No. 7 :

Figures are rounded off to the nearest Thousands.

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Mar 31, 2011

1. a. Estimated amount of contracts, remaining to be executed on Capital account and not provided for (net of advances) Rs. 897.18 Lacs (Previous year Rs. 2183.23 Lacs).

b. Contingent Liabilities

As at As at Particulars 31.03.2011 31.03.2010 Rs.ln Lacs Rs.in Lacs

Letters of Credit 2670.00 2378.39

Counter Guarantees * 774.19 631.35

Excise Duty, Service Tax Demands - Company has appealed against 28.23 54.11 orders raised the demands

Income Tax Demands - Company has appealed against orders raised 90.50 120.79 the demands

* Includes renewal of guarantee provided on behalf of Nagarjuna Hydro Energy Pvt Ltd for an amount of Rs. 475.37 Lacs (Previous year Rs. 463.88 Lacs).

2. Secured Loans:

The Term Loans (except Wind energy project term loan) availed from State Bank of India, IDBI Bank Ltd & HDFC Bank Ltd and the External Commercial Borrowing (ECB) from ICICI Bank Limited are secured by way of equitable mortgage by deposit of title deeds of the Company's immovable properties both present and future and by way of first charge of all fixed assets of the Company as a primary security and hypothecation of movable properties of the company ranking pari passu and borrowings from State Bank of India, IDBI Bank Ltd and ICICI Bank Ltd are further secured by a second charge on the current assets of the company consisting of stock in trade, book debts and stores and spares.

Term Loan availed from State Bank of India for Wind power project is secured by way of mortgage by deposit of title deeds of the project's immovable properties and by way of first charge of all project fixed assets as a primary security.

Working Capital Term Loan availed from New India Co-operative Bank Ltd is secured by way of first charge, ranking pari passu, of all movable fixed assets of the company as a primary security. Cash Credits, Working Capital Demand Loan including Non Fund Based Limits of Letters of Credit and Bank Guarantees from State Bank of India, IDBI Bank Ltd & HDFC Bank Ltd and Corporate Loan availed from State Bank of India are secured by way of hypothecation of current assets comprising of stock in trade, book debts and stores and spares, both present and future. The aforesaid facilities are further secured by second charge of the company's immovable and hypothecation of movable properties, both present and future, ranking pari passu with the term loan lenders.

Term loans from banks (except Term Loan from HDFC Bank Ltd & Corporate Loan from State Bank of India and Working Capital Term Loan from New India Co-operative Bank Ltd availed during the financial year 2009-10) and working capital loans from banks are personally guaranteed by Sri K.S. Raju, a Director of the company.

3. Unsecured Loans:

Sales Tax Deferral:

Sales Tax Deferment: Vide order No.10/1/5/0564/0696 dated 26th April, 1995 the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Monocrotophos for a period of ten years commencing from 1.7.1994; subject to a maximum of Rs.1330.27 Lacs. Based on the Sales Tax Returns, the sales tax so deferred aggregates net of repayments to Rs.262.85 Lacs. (Previous Year Rs. 331.24 Lacs). The repayment of deferred Sales Tax has commenced from July, 2004 as prescribed in the said order.

Further vide Revised order No. 10/1/9/0023/0387/1D, dated 31.01.2001, the Government of Andhra Pradesh had sanctioned Sales Tax Deferment to the Company in respect of Acephate and Profenofos for a period of fourteen years commencing from 28.09.1997 for Acephate and from 23.02.2000 for Profenofos, subject to a maximum of Rs.1028.55 Lacs. The Sales Tax deferred in a year is payable at the end of 14th year without interest. First payment commence from 25.09.2013 as prescribed in the order. Since financial year 2006-07, the company has decided not to avail the Sales Tax deferment and opted to pay the sales tax henceforth. Based on the Sales Tax Returns, the sales tax so deferred aggregates to Rs.301.62 Lacs. (Previous Year Rs. 301.62 Lacs).

4. Borrowing cost incurred during the year for acquisition of assets aggregated to Rs.172.93 Lacs (Previous year Rs. 110.18 Lacs) plus expenditure pending allocation opening balance of Rs.53.15 lacs against which an amount Rs. 226.08 Lacs (Previous year Rs. 57.03 Lacs) has been capitalized against qualifying assets and the balance Rs. Nil (Previous year Rs. 53.15 Lacs) is included under Expenditure pending allocation.

5. During the year, the company has commissioned Wind energy project with a capacity of 6.3 MW in the month of Sep'10.

6. During the year, the company has incorporated a wholly owned subsidiary as a proprietary company limited by shares viz., Nagarjuna Agrichem (Australia) Pty Limited in Australia under Corporations Act 2001 as on 30.03.2011. As operations are yet to commence in this company, no consolidation of financial statements is required.

7. During the year, the company has written off the expenditure incurred on certain project related activities for Rs.303.03 lacs under the head "CWIP written off" and grouped under "Administrative, Selling/ Distribution and Other Expenses".

8. Segment Reporting

a. Primary Segment Information:

The Company's main business segment is Agro Chemicals, Wind energy business does not fall under reportable business segment as per Accounting Standard-17. Hence there is no separate reportable business segment as per "Segment Reporting - Accounting Standard-17".

b. Secondary Segment Information:

Secondary Segment reporting is based on the geographical location of customers. The management views India and Outside India markets as distinct geographical segments.

9. Related Party Transactions:

A. Names of related parties and description of relationship.

Relationship Party

Subsidiary Company Nagarjuna Agrichem (Australia) Pty Limited, Australia

Holding Company KLR Products Limited (Formerly GSR Products Limited)

Associates iKisan Limited Indo International Fertilizers Ltd. Nagarjuna Fertilizers & Chemicals Ltd Bhagiradha Chemicals & Industries Ltd Nagarjuna Hydro Energy Pvt Ltd

Key Management Personnel (KMP) Mr.Ashok Muni, Director & COO (part of the year) Mr.Vijaya Raghavan, Whole time Director Mrs.K Lakshmi Raju, Director (having significant influence)

Relatives of Dir ectors Mr KS Raju (Father of Mrs.K Lakshmi Raju, Director) Mrs.K Lakshmi Raju (Sister of Mr.KS Raju, Director)

10. Current Tax

It is decided by the management that, even though the wind energy business is entitled for deduction u/s-80 IA for the FY 2010-11, the current AY 2011-12 would not be treated as the initial assessment year. For the year, the company is obliged to pay current tax of Rs. 128.56 Lacs under the MAT provisions of Section - 115JB of Income-tax Act, 1956. At this stage, Management is of opinion that there is no virtual certainty to recognize MAT Credit entitlement as an asset for the current year as per the Guidance note issued by ICAI.

11. Deferred Tax

Deferred Tax is accounted in respect of the timing differences on a liability method. Deferred Tax Asset has been recognised to the extent where the management is reasonably certain that the realisation is more likely than not.

12. Employee Benefit Obligations

A. Defined Contribution Plan:

The company makes Provident Fund contribution to defined contribution retirement benefit plan for qualifying employees. Under the scheme the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

B. Defined Benefit Plan:

Liability for retiring gratuity as on March 31, 2011 is Rs.248.18 Lacs (as on March 31, 2010 - Rs. 238.51 Lacs) of which Rs.226.16 Lacs (as on March 31, 2010-Rs. 210.50 Lacs) is funded with Life Insurance Corporation of India/ ING Vysya Life Insurance Company Private Limited and the balance is included in provision for Gratuity. Liability for Gratuity has been actuarially determined and provided in the books. The details of the Company's post-retirement benefit plans for its employees are given below which is certified by the actuary.

13. The company has been regularly transferring unclaimed dividend to the Investor Education and Protection Fund after the expiry of the prescribed period. In respect of previous years the company has obtained details of the account and noticed certain discrepancies which are under reconciliation. For current year the company is yet to receive full information from some banks. Pending receipt of such information the company is in process of reconciling the unclaimed dividend account.

14. Balance of debtors, loans and advances and creditors are subject to reconciliation and confirmation.

15. Figures of the previous year have been re-grouped/recast wherever necessary to conform to the current year's presentation/classification.

16. Figures are rounded off to the nearest rupee.

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Mar 31, 2010

Form for disclosure of Particulars with respect to technology absorption.

A.RESEARCH AND DEVELOPMENT (R&D)

1 Specific areas in which R&D carried out by the Company

a.R&D Work on the existing processes to make them environmentally friendly and cost effective.

b.Indigenous process developments for new products.

2.Benefits derived as a result of the above R&D

Increased export business and improved product quality.

3.Future plans of action

Introduction of new products through indigenously developed technology.

4.Expenditure on R&D

a.Capital Rs.0.99 lakhs

b.Recurring Rs.109.36 lakhs

c.Total Expenditure as a percentage of 0.17% total turnover



B.TECHNOLOGY ABSORPTION,ADAPTATION AND INNOVATION

1 Efforts in brief,made towards technology absorption,adaptation and innovation.

Increased size of R&D process development, purchase of new equipments and generation of process technical for new products.

2.Benefits derived as a result of the above effort eg.Product improvement,cost reduction product development,import substitution etc.,

a.The plants operate effectively with new addition of products,

b.Exports started growing.

3.In case of imported technology (imported during the last 5 years reckoned from the beginning of the technical year)following information may be furnished

a.Technology imported None

b.Year of import Not Applicable

c.Has technology been fully absorbed Not Applicable

d.If not fully absorbed,areas where this has not taken place,reasons therefore and future plans of action Not Applicable