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.

3.26 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.

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 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.

(xv) There have been no material subsequent events after the reporting period that require adjustment or disclosure in these

financial statements.

45. The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except
that audit trail feature is not enabled at the database level insofar as it relates to primary accounting software. Further no
instance of audit trail feature being tampered with was noted in respect of other software. Additionally, the audit trail has
been preserved as per the statutory requirements for record retention, to extent it was enabled and recorded in the prior year.