1.17 Provisions and contingencies

Provisions are recognised, when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of
the amount of the obligation.

The amount recognised as a provision is the best
estimate of the consideration required to settle the
present obligation and are reviewed 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 liability is disclosed for (i) a possible
obligation that arises from past events and whose
existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future
events not wholly within the control of the entity
or (ii) Present obligations arising from past events
where it is not probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation or a reliable estimate of the amount of
the obligation cannot be made. When some or all of
the economic benefits required to settle a provision
are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually
certain that reimbursement will be received and the
amount of the receivable can be measured reliably.

Contingent assets are disclosed in the Financial
Statements by way of notes to accounts only in case of
inflow of economic benefits is probable.

1.18 Taxes on income

Current tax is the expected tax payable on the taxable
profit for the year using tax rates and tax laws enacted
or substantively enacted by the end of the reporting
period and any adjustments to the tax payable in
respect of previous years.

The tax currently payable is based on taxable profit
for the year, if any. Taxable profit differs from 'profit
before tax' as reported in the Statement of Profit and
Loss because of items of income or expense that are
taxable or deductible in other years and items that are
never taxable or deductible.

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable
profits will be available against which those deductible
temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the
asset to be recovered.

Deferred tax liabilities and assets are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting
period.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.

Current and deferred tax are recognised in profit
and loss, except when they relate to items that are
recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or
directly in equity respectively.

Current tax assets and current tax liabilities are offset
when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle
the asset and the liability on a net basis. Deferred
tax assets and deferred tax liabilities are offset when
there is a legally enforceable right to set off assets
against liabilities representing current tax and where
the deferred tax assets and the deferred tax liabilities
relate to taxes on income levied by the same governing
taxation laws.

Current tax is the expected tax payable on the taxable
profit for the year using tax rates and tax laws enacted
or substantively enacted by the end of the reporting
period and any adjustments to the tax payable in
respect of previous years.

The tax currently payable is based on taxable profit
for the year, if any. Taxable profit differs from 'profit
before tax' as reported in the Statement of Profit and
Loss because of items of income or expense that are
taxable or deductible in other years and items that are
never taxable or deductible.

1.19 Financial Instruments

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instruments.

Initial Recognition

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 statement of profit
and loss.

Subsequent Measurement
Financial assets

All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets, except for investment forming part of
interest in subsidiary, which are measured at cost.

Classification of financial assets

The Company classifies its financial assets in the
following measurement categories:

a) t hose to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss), and

b) those measured at amortised cost

The classification depends on the Company's business
model for managing the financial assets and the
contractual terms of the cash flows.

(a) Amortised Cost

Assets that are held for collection of contractual
cash flows where those cash flows represent
solely, payments of principal and interest are
measured at amortised cost. A gain or loss on
these assets that is subsequently measured at
amortised cost is recognised in profit or loss when
the asset is derecognised or impaired. Interest
income from these financial assets is included in
finance income using the effective interest rate
method.

(b) Fair value through other comprehensive
income (FVTOCI)

Assets that are held for collection of contractual
cash flows and for selling the financial assets,
where the assets cash flows represent solely,
payments of principal and interest, are measured
at fair value through other comprehensive income
(FVTOCI). Movements in the carrying amount
are taken through OCI. When the financial asset
is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other
income/(expense).

(c) Fair value through profit or loss (FVTPL)

Assets that do not meet the criteria for amortised
cost or FVTOCI are measured at fair value through
profit or loss. A gain or loss on these assets that
is subsequently measured at fair value through
profit or loss is recognised in the statement of
profit and loss.

Impairment of financial assets

The Company applies the expected credit loss model
for recognizing impairment loss on financial assets
measured at amortised cost, trade receivable, other
contractual rights to receive cash or other financial
asset, and financial guarantees not designated as at
Fair value through profit or loss.

Expected credit losses are the weighted average
of credit losses with the respective risks of default
occurring as the weights. Credit loss is the difference
between all contractual cash flows that are due to the
Company in accordance with the contract and all the
cash flows that the Company expects to receive (i.e.,
all cash shortfalls), discounted at the original effective
interest rate (or credit-adjusted effective interest
rate for purchased or originated credit-impairment
financial assets). The Company estimates cash flows
by considering all contractual terms of the financial
instrument (for example, prepayments, extension, call
and similar options) through the expected life of that
financial instruments.

The Company measures the loss allowance for the
financial instruments at an amount equal to the lifetime
expected credit losses if the credit risk on those
financial instruments has increased significantly since
initial recognition.

If the credit risk on financial instruments has not
increased significantly since initial recognition, the
Company measures the loss allowance for that
financial instruments at an amount equal to 12 months
expected credit losses. The twelve months expected
credit losses are portion of the lifetime expected credit
losses and represents lifetime cash shortfalls that
will result if default occurs within 12 months after the
reporting date and thus, are not cash shortfalls that are
predicted over the 12 months.

I f the Company has already measured loss allowance
for the financial instruments at life time expected credit
loss model in the previous period and determines at
the end of a reporting period that the credit risk has not
increased significantly since initial recognition due to
improvement in credit quality, then the Company again

measures the loss allowance based on 12 month
expected credit losses.

When making the assessment of whether there has
been a significant increase in credit risk since initial
recognition, the Company uses the change in the
risk of a default occurring over the expected life of
the financial instruments instead of the change in
the amount of expected credit losses. To make that
assessment, the Company compares the risk of a
default occurring on the financial instrument as at
the reporting date with the risk of a default occurring
on the financial instrument as at the date of initial
recognition and considers reasonable and supportable
information, that is available without undue cost or
effort, that is indicative of significant increase in credit
risk since initial recognition.

For trade receivables or any contractual rights to
receive cash or other financial assets that results from
transactions that are within the scope of Ind AS 115,
the Company always measures the loss allowance at
an amount equal to life time expected credit losses.

Further, for the purposes of measuring lifetime expected
credit loss allowance for trade receivables, the
Company has used a practical expedient as permitted
under Ind AS 109. This expected credit loss allowance
is computed based on a provision matrix which takes
into account historical credit loss experience and
adjusted for forward - looking information.

Derecognition of financial assets

A financial asset is derecognised only when the
Company has transferred the rights to receive cash
flows from the financial asset. Where the Company
has transferred an asset, it evaluates whether it has
transferred substantially all risks and rewards of
ownership of the financial asset. Where the Company
has neither transferred a financial asset nor retains
substantially all risks and rewards of ownership of the
financial asset, the financial asset is derecognised if
the Company has not retained control of the financial
asset.

Financial liabilities and equity instruments:-
Classification as equity or financial liability

Equity and Debt instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.

All financial liabilities are subsequently measured at
amortised cost using the effective interest method or at
FVTPL.

Equity instruments

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued
by the Company are recognised at the proceeds
received, net of direct issue costs.

Financial liabilities at amortised cost

Financial liabilities that are not held-for-trading and are not
designated as FVTPL, are measured at amortised cost at
the end of the reporting period. The carrying amounts of
financial liabilities that are measured at amortised cost
are determined based on the effective interest method.
Interest expense that is not capitalised as part of costs of
an asset is included in the 'Finance costs'.

Financial liabilities at FVTPL

Liabilities that do not meet the criteria for amortised
cost are measured at 'fair value through profit or
loss' (FVTPL). A gain or loss on these assets that is
subsequently measured at 'fair value through profit or
loss' (FVTPL) is recognised in the statement of profit
and loss.

Derecognition of financial liabilities

The Company derecognises financial liabilities
when, and only when, the Company's obligations are
discharged, cancelled or have expired. The difference
between the carrying amount of the financial liability
derecognised and the consideration paid and payable
is recognised in profit or loss.

Derivative financial instruments
Initial recognition

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

Subsequent measurement

Derivative financial instruments are subsequently re¬
measured at fair value with any gains or losses arising
from changes in the fair value taken directly to the
statement of profit or loss.

1.20 Earnings Per Share

Basic earnings per share is computed by dividing the
net profit/(loss) after tax (including the post tax effect of
exceptional items, if any) for the period attributable to
equity shareholders by the weighted average number
of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the
profit/(loss) after tax (including the post tax effect of
exceptional items, if any) for the period attributable to
equity shareholders as adjusted for dividend, interest
and other charges to expense or income (net of any
attributable taxes) relating to the dilutive potential
equity shares, by the weighted average number
of equity shares considered for deriving basic plus
dilutive shares during the year/period.

1.21 Use of estimates and judgements

In preparing these standalone financial statements,
management has made judgements, estimates and
assumptions that affect the application of accounting
policies and the reported amounts of assets,
liabilities, the disclosures of contingent assets &
contingent liabilities at the date of standalone financial
statements, income and expenses during the year.
The estimates and associated assumptions are based
on the historical experiences and other factors that are
considered to be relevant. Actual results may differ
from these estimates.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates
are recognized prospectively.

Judgements are made in applying accounting policies
that have the most significant effects on the amounts
recognized in the standalone financial statements.

Assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment are
reviewed on an ongoing basis.

Uncertainty about these assumptions and estimates
could result in outcomes that require a material

adjustment to the carrying amount of assets or liabilities
affected in future periods.

The areas involving critical estimates or
judgments are:

a. Estimation of useful life of Property, plant and
equipment and intangible asset & impairment
testing

b. Estimation of fair value of unlisted securities

c. Impairment of trade receivables: Expected
credit loss

d. Recognition and measurement of provisions
and contingencies; key assumptions about
the likelihood and magnitude of an outflow of
resources

e. Measurement of defined benefit obligation: key
actuarial assumptions

f. Lease: Whether an contract contains a lease

g. Write down of Inventory

h. Estimation for litigations

i. Impairment of investment and other financial/non

financial assets

j. Estimation of Washing loss and transit loss of
inventory

k. Fair value measurement of derivative and other
financial instruments

l. Income taxes

1.22 Operating Cycle

Based on the nature of products/activities of the
Company and the normal time between acquisition of
assets and their realisation in cash or cash equivalents,
the Company has determined its operating cycle as 12
months for the purpose of classification of its assets
and liabilities as current and non-current. For salt at
crystalizers, the operating cycle is 24 months and is
consistently applied.

(a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provisions of the Companies Act 2013.

(b) Retained earnings

Retained earnings represents company's cumulative earnings since its formation less the dividends/Capitalisation, if any.

(c) Share Options Outstanding Account

Pursuant to the resolution passed by the Board and resolution passed at the Nomination Remuneration Committee on
October 07, 2022 the Company has granted the issuance of 4,91,400 Employee Stock Options (ESOP's) to the eligible
employees of the Company in accordance with Archean Chemical -Employee Stock Option Plan 2022. The amount of
options(difference between fair value and exercise price) granted under the ESOP scheme has been recognised in the
share options outstanding account.

The Company is engaged in the activities related to manufacture of marine chemicals. The Chief Operating Decision Maker
(Managing Director /Management) review the operating results as a whole. For purposes of making decisions about resources
to be allocated and assess its performance, the entire operations are to be classified as a single business segment, namely
Marine Chemicals. The geographical segments considered for disclosure are - I ndia and Rest of the World. All the manufacturing
facilities are located in India. Accordingly, there is no other reportable segment as per Ind AS 108 Operating Segments.

31.1 Geographical information

The Company's revenue from external customers by location of operations and information about its non current assets**
by location of operations are detailed below. The geographical segments considered for disclosure are - India and Rest
of the World. All the manufacturing facilities are located in India

A. Defined contribution plans

The Company makes Provident fund contributions which are defined contribution plans, for qualifying employees. Under
the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The
Company recognised Rs. 182.56 Lakhs (Previous year ended March 31, 2025 - Rs. 190.87 Lakhs) for Provident Fund
contributions in the Statement of Profit and Loss. The contributions payable to the plans by the Company are at rates
specified in the rules of the schemes.

B. Defined benefit plans
Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan
provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of
employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon
completion of five years of service. The Company makes annual contributions to Life Insurance Corporation of India(LIC).
The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in
an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability
(as shown in financial statements).

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular
investment.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary
increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from
the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The
Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Longevity risk: The present value of the defined benefit obligation is calculated by reference to the best estimate of
the mortality of plan participants during their employment. An increase in the life expectancy of the plan participants will
increase the plan's liability.

34.3 Financial risk management objectives

The Company's Corporate Treasury function provides services to the business, co-ordinates access to domestic and
international financial markets, monitors and manages the financial risks relating to the operations of the Company
through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk
(including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company has implemented a hedging policy during year, to minimise the effects of foreign exchange fluctuations.
The Corporate Treasury function reports quarterly to the Chief Financial Officer and overseen by the board.

34.4 Market Risk

The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates.

Market risk exposures are measured using sensitivity analysis.

There has been no change to the Company's exposure to market risks or the manner in which these risks are being
managed and measured.

34.5 Foreign Currency risk management

The Company is exposed to foreign exchange risk arising from foreign currency transactions on account of sale/purchase
of goods. Foreign exchange risk arises from recognised assets denominated in a currency that is not the Company's
functional currency (Rs). The risk is measured through a forecast of foreign currency cash flows that would arise due to
the underlying assets and liabilities held.

The Company has entered into forward contracts to manage a portion of foreign currency risk arising out of realisation
of foreign currency receivables. The strategy followed by the Company is tracking the foreign currency exchange rates
and settlement of the payables at the time when the exchange rates are favourable.

34.5.1 Foreign currency sensitivity analysis

The Company is mainly exposed to the currency of USD, GBP and EURO.

The following table details the Company's sensitivity to a 5% increase and decrease against the relevant foreign
currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel
and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity
analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the
period end for a 5% change in foreign currency rates. A positive number below indicates an increase in profit where the
rupee strengthens 5% against the relevant currency. For a 5% weakening of the rupee against the relevant currency,
there would be a comparable impact on the profit.

34.6 Interest rate risk management

The long term borrowings appearing in the standalone balance sheet carries a fixed rate of interest and hence the
Company is not exposed to interest rate variability.

34.7 Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates at the end of the reporting
period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of
the reporting period was outstanding for the whole period. A 50 basis point increase or decrease is used when reporting
interest rate risk internally to key management personnel and represents management's assessment of the reasonably
possible change in interest rates.

If interest rate had been 50 basis points higher/lower and all other variables were held constant, the Company's 'Profit
for the year ended March 31,2026 would not have any significant impact as there are no liabilities with floating rate as at
March 31, 2026. This is mainly attributable to the Company's exposure to interest rates on its variable rate borrowings.

34.8 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company uses other
publicly available financial information and its own trading records to rate its major customers. The Company's exposure
and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded
is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and
approved on a regular basis. Also majority of sales are carried out through letter of credit and secured.

The Company does not have significant credit exposure to any single customer. Concentration of Credit Risk to single
customer did not exceed 10% of receivables in FY 2025-26 except for three customers whose outstanding balance was
Rs. 7,411.79 Lakhs. (FY 2024-25 - Rs. 8,114.16 Lakhs).

34.9 Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate
liquidity risk management framework for the management of the Company's short-term, medium-term and long-term
funding and liquidity management requirements. 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.

34.9.1 Liquidity and interest risk tables

The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities
based on the earliest date on which the Company can be required to pay. The tables include both interest and principal
cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves
at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be
required to pay.

The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company

shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company

(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

B. The borrowings from banks and financial institutions have been used for the purposes for which it was taken at the
standalone balance sheet date.

C. The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company and benami property.

D. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond statutory period.

E. The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

F. The Company does not have any transaction which is not recorded in the books of account that has been surrendered,

disclosed as income during the year in the tax assessments under the income tax act, 1961 (such as, search or survey
or any of the relevant provisions of the Income tax Act, 1961.)

G. Relationship with Struck-off Companies: The Company has searched for transactions with Struck-off companies by
comparing company's counter parties with publicly available database of struck-off companies through a manual name
search. Based on such a manual search, there are no transactions with the struck off comapnies for the FY 2025-26.

H. Dividend of Rs. 2.5 per equity share amounting to Rs. 3,086.46 Lakhs for the Financial Year 2025-26 has been
recommended by Board of Directors which is subject to approval of shareholders at the ensuing Annual General Meeting
is not recognized as liability at the standalone balance Sheet date.

I. Income Tax Search and Seizure:

The Income Tax Department conducted a search and seizure operation from September 4, 2025 to September 9, 2025
at various locations of the Company's and its subsidiary companies' offices, plants, and the residence of directors,
senior executives and employees under Section 132 of the Income Tax Act, 1961. The Company, its directors, senior
executives, employees extended full cooperation to the Authorities. On April 10, 2026 the Company received notice
under Section 158BC of the Income Tax Act, 1961 to file returns for the block period April 1, 2019 to November 6, 2025.
The Company is in the process of responding to the same to the Income Tax Department. Management is confident that
these events will not have any material adverse impact on the standalone financial statements of the Company.

NOTE 41: APPROVAL OF FINANCIAL STATEMENTS

The standalone financial statements were approved for issue by the Board of Directors on May 11, 2026
NOTE 42:

Effective November 21, 2025, the Government of India consolidated 29 existing labour regulations into four Labour codes,
namely, 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, collectively referred to as the 'New Labour Codes'. The New
Labour Codes has resulted in a one-time increase in provision for employee benefits on account of recognition of past service
costs. Based on the requirements of New Labour Codes and the ICAI clarification, the Company has assessed and accounted
the estimated incremental impact of Rs. 44.09 Lakhs in the employee benefit expenses for the year ended March 31,2026.

NOTE 43: The previous year figures have been regrouped/rearranged to conform to current period classification.