Notes to Accounts of Chembond Chemicals Ltd.

Mar 31, 2026

(t) Provisions, Contingent Liabilities and Contingent
Assets

Provisions are recognized for liabilities that can be
measured only by using a substantial degree of estimation,
if

(a) the Company has a present obligation as a result of a
past event;

(b) a probable outflow of resources is expected to settle
the obligation; and

(c) the amount of the obligation can be reliably
estimated.

Reimbursement expected in respect of expenditure
required to settle a provision is recognised only when it is
virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of

(a) a present obligation arising from past events, when
it is not probable that an outflow of resources will be
required to settle the obligation;

(b) a present obligation when no reliable estimate is
possible; and

(c) a possible obligation arising from past events where
the probability of outflow of resources is not remote.

Contingent Assets are neither recognised, nor disclosed.

Provision, Contingent Liabilities and Contingent Assets
are reviewed at each balance Sheet date.

(u) Dividend

The Company recognises a liability to make cash
distributions to equity holders when the distribution
is authorised and the distribution is no longer at the
discretion of the Company. As per the Companies
Act,2013 in India, a distribution is authorised when it is
approved by the shareholders. A corresponding amount
is recognised directly in equity.

(v) Segment Reporting

Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker of
the Company is responsible for allocating resources and
assessing performance of the operating segments.

1.3 Key accounting estimates and judgements

The preparation of the Company’s financial statements
requires the management to make judgements,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure
of contingent liabilities. 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 judgements are:

a. Property Plant & Equipment - Property, plant and
equipment represent a significant proportion of the
asset base of the Company. The charge in respect
of periodic depreciation is derived after determining
an estimate of an asset’s expected useful life and

the expected residual value at the end of its life. The
useful lives and residual values of Company’s assets
are determined by management at the time the asset
is acquired and reviewed at the end of each reporting
period. The lives are based on historical experience
with similar assets as well as anticipation of future
events, which may impact their life, such as changes
in technology.

b. Provisions - Provision is recognised when the
Company has a present obligation as a result of past
event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of
which a reliable estimate can be made. These are
reviewed at each balance sheet date adjusted to
reflect the current best estimates.

c. Taxes - Significant judgements are involved in
determining the provision for income taxes, including
amount expected to be paid / recovered for uncertain
tax positions. In assessing the realizability of deferred
tax assets arising from unused tax credits, the
management considers convincing evidence about
availability of sufficient taxable income against
which such unused tax credits can be utilized. The
amount of the deferred income tax assets considered
realizable, however, could change if estimates of
future taxable income changes in the future

d. Defined Benefit Obligations - The cost of defined
benefit gratuity plans, and post-retirement medical
benefit is determined using actuarial valuations. The
actuarial valuation involves making assumptions
about discount rates, future salary increases,
mortality rates and future pension increases. Due to
the long-term nature of these plans, such estimates
are subject to significant uncertainty

1.4 Recent Accounting Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
the Companies (Indian Accounting Standards) Rules as
issued from time to time.

During the year, MCA notified amendments to Ind AS
21 - The Effects of Changes in Foreign Exchange Rates,
Ind AS 1 - Presentation of Financial Statements, Ind AS
7 - Statement of Cash Flows and Ind AS 107 - Financial
Instruments: Disclosures, applicable from April 1,2025.

The Company has evaluated the aforesaid amendments
and concluded that the same do not have any material
impact on its financial statements.

35 SEGMENT REPORTING

"Operating segments are defined as components of an enterprise for which discrete financial information is available that is
evaluated regularly by the chief operating decision-maker at respective entity level in assessing the performance and deciding
on allocation of resources. The Company, accordingly, has only one reportable business segment, i.e., ‘Speciality Chemicals’.

As per Ind AS 108- "Operating Segment”(para 4), segment information has been provided under the Notes to Consolidated
Financial Statements and therefore no separate disclosure on segment information is given in standalone financial
statements.”

36 Financial instruments - Fair values and risk management
A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not
include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair values

Ind 113, ‘Fair Value Measurement’ requires classification of the valuation method of financial instruments measured at
fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in
the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). Fair value
of derivative financial assets and liabilities are estimated by discounting expected future contractual cash flows using
prevailing market interest rate curves. The three levels of the fair-value-hierarchy under Ind AS 113 are described below:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted
equity instruments, government securities and mutual funds (includes FMP) that have quoted price.

Level 2: Inputs are 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) such as derivative financial instruments.

Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in
part using a valuation model based on assumptions that are neither supported by prices from observable current
market transactions in the same instrument nor are they based on available market data. This includes unquoted
equity shares which are valued at cost.

Transfers between Levels

There are no transfers betweeen the levels

C. Financial risk management

The Company’s activities expose it to Credit risk, liquidity risk and market risk.

i. Risk management framework

Risk Management is an integral part of the Company’s plans and operations. 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 is
responsible for developing and monitoring the Company risk management policies.

The Risk Management 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 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.

ii. 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 and investments in debt
securities, cash and cash equivalents, mutual funds, bonds etc.

Trade and other receivables

Credit risk is the risk of possible default by the counter party resulting in a financial loss.

The Company manages credit risk through various internal policies and procedures setforth for effective control over credit
exposure. These are managed by way of setting various credit approvals,evaluation of financial condition before supply
terms, setting credit limits, industry trends,ageing analysis and continuously monitoring the creditworthiness of customers
to which the Company grants credit terms in the normal course of business.

Based on prior experience and an assessment of the current economic environment, management believes that sufficient
provision is made based on expected credit loss model for credit risk wherever credit is extended to customers.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Company’s treasury department in accordance with the Company’s
policy. Investment of surplus funds are made in mainly in mutual funds with good returns and with high credit ratings
assigned by International and domestic credit ratings agencies.

Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.

iii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s
reputation.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company also
constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
Accordingly, liquidity risk is perceived to be low.

The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed
undiscounted cash flows as at the Balance Sheet date:

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes
in market rates and prices (such as interest rates, foreign currency exchange rates ). Market risk is attributable to all
market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long¬
term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk
and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and
borrowing activities and revenue generating and operating activities in foreign currencies

a) Currency risk

The Compnay is exposed to currency risk to the extent that there is a mismatch between the currencies in
which sales, purchase, and other expenses are denominated and the functional currency of the Company. The
functional currency of the Company is Indian Rupees (INR). The currencies in which these transactions are
primarily denominated are EURO and USD.

Exposure to currency risk

The summary quantitative data about the Company’s exposure to currency risk as reported to the management
of the Company is as follows:

The Compnay is exposed to currency risk to the extent that there is a mismatch between the currencies in
which sales, purchase, and other expenses are denominated and the functional currency of the Company.
The functional currency of the Company is Indian Rupees (^). The currencies in which these transactions are
primarily denominated are USD.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. Investment committee manages and constantly reviews the interest rate movements
in the market. This risk is mitigated by the Company by investing the funds in varioustenors depending on the liquidity
needs of the Company. The Company’s exposures to interest rate risk is not significant.

c) Price risk

Quoted Equity & Debt Securities Price Risk is related to the change in market reference price of the investments.
The fair value of some of the Company’s investments in quoted equity & debt securities exposes the Company
to price risks. In general, these securities are not held for trading purposes. These investments are subject to
changes in the market price of securities.

d) Price sensitivity analysis

If prices of quoted equity & debt instruments had been 1% higher/(lower), the unrealised gain/(loss) for the year ended
March 31,2026 and March 31,2025 would increase/(decrease) by ^ 12.18 Lakhs and ^ 11.96 Lakhs respectively.

37 Employee Benefit obligations

(A) Defined Contribution Plan

Contributions are made to Employee Provident Fund (EPF), Employees State Insurance Scheme (ESIC) and other
Funds which covers all regular employees. Both the employees and the Company make predetermined contributions
to the Provident Fund and ESIC. The contributions are normally based on a certain percentage of the employee’s
salary. Amount recognised as expense in respect of these defined contribution plans, is as detailed below :

43 Additional regulatory information not disclosed elsewhere in the financial information

A The Company do not have any Benami property and no proceedings have been initiated or pending against the
Company and its Indian subsidiaries for holding any Benami property, under the Benami Transactions (Prohibitions)
Act, 1988 (45 of 1988) and the rules made thereunder.

B The Company has no transactions with struck off companies under section 248 of the Companies Act, 2013 or section
560 of the Companies Act, 1956.

C The Company have 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: directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Group (Ultimate Beneficiaries) or

provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

D The Company have 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 Group shall: directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party(Ultimate
Beneficiaries) or

provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

E The Company have not undertaken 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).

F The Company have not traded or invested in Crypto currency or Virtual Currency during the current or previous year.

G The Company have not been declared as a ‘Wilful Defaulter’ by any bank or financial institution (as defined under the

Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the
Reserve Bank of India.

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

44 Capital Management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital
is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.

As at 31st March, 2026, the Company has only one class of equity shares and has no other long term borrowings. Consequent
to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal
capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its
long term financial plans.

47 Working Capital Facilities

The Company has sanctioned credit facilities from Bank of India '' 150 lakhs (i.e cash credit facility '' 100.00 lakhs and Bank
Guarantee - '' 50.00 lakhs) The Company has not utilised cash credit facilities at the year end.

Terms of loan

a) The credit facility carries interest rate of Bank Of India, currently 9.81% p.a. (interest payable on monthly rests).

b) The credit facility is secured by : Hypothecation of stocks and bookdebts.

Utilisation of borrowings :

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

(b) The quarterly returns/statements of current assets filed by the Company with banks or financial institutions in
relation to secured borrowings wherever applicable, are in agreement with the books of accounts.

48 Audit Trail

The Ministry of Corporate Affairs (MCA) has issued a notification - Companies (Accounts) Amendment Rules, 2021 which
is effective from 1st April, 2023. The amendment requires that every company which uses an accounting software for
maintaining its books of account shall use an accounting software where there is feature of recording audit trail of each and
every transaction and further creating an edit log of each change made to the books of account along with the date when
such changes were made and ensuring that the audit trail cannot be disabled.

The Company uses an accounting software for maintaining books of account which has a feature of recording audit trail
and edit log facility and that has been operative throughout the financial year for the transactions recorded in the software
impacting books of account at the application level. The software being managed on public cloud, users of the company do
not have access to enable, disable, deactivate or tamper with the audit trail setting.

49 Events occurring After Balance sheet date

The Board of Directors have recommended a dividend of ^ 1.25 per share of face value ^ 5/- each for the year ended 31st
March, 2026

aggregating ^ 336.21 Lakhs, subject to the approval of shareholders at the Annual General Meeting.

50 Composite scheme of arrangement: (in '' lakhs except otherwise stated)

The figures for the comparatives figures for the year to date pertaining to the FY 2024-25 are after considering the effect of
demerger and amalgamation pursuant to NCLT order dated 7th April, 2025, as per the method of accounting prescribed in
the composite scheme of arrangement and in accordance with principles of Indian Accounting Standards, including IND
AS 103 (Business Combinations). The impact of the aforesaid demerger and amalgamation on the corresponding previous
year figures (FY 2024-25) is disclosed below. The approved Scheme provides for an appointed date of April 1,2024.

Against the net assets of ^ 8,915.58 Lakhs, the Company had issued equity shares of ^1,344.83 Lakhs (2,68,96,576 shares
of ^ 5 each) after cancellation of existing 10,000 equity shares of ^ 5 each and the balance of ^ 7,571.25 Lakhs has been
recognised in Other equity.

51 The Government of India has consolidated 29 existing labour legislations into a united framework comprising four Labour
Code viz Code on wages 2019, Code on Social Security 2020, Industrial Relation Code 2020, and Occupational Safety,
Health and Working Condition Code 2020 (collectively referred to as the New Labour Codes). These Codes have been made
effective from 21st November, 2025. The corresponding all supporting rules under these codes are yet to be notified. The
incremental impact of these changes on the employee benefit expenses, estimated by the Company, on the basis of the
information available, consistent with the guidance provided by the Institute of Chartered Accountants of India, is ^ 38.94
Lakhs and has been recognised in the standalone financial statements of the Company for the year ended 31st March,
2026.

52 The figures for corresponding previous periods have been restated/regrouped, rearranged and reclassified wherever
necessary to make them comparable.

53 Approval of Standalone Financial Statements

The above Standalone Financial Statements for the year ended 31st March 2026, have been reviewed by the Audit Committee
and approved by the Board of Directors at their meeting held on 16th May 2026. The Statutory Auditors of the Company have
audited the annual financial statements.

---

Mar 31, 2025

u) Provisions, Contingent Liabilities and Contingent
Assets

Provisions are recognized for liabilities that can
be measured only by using a substantial degree of
estimation, if

(a) the Company has a present obligation as a result
of a past event;

(b) a probable outflow of resources is expected to
settle the obligation; and

(c) the amount of the obligation can be reliably
estimated.

Reimbursement expected in respect of expenditure
required to settle a provision is recognised only when
it is virtually certain that the reimbursement will be
received.

Contingent liability is disclosed in case of

(a) a present obligation arising from past events,
when it is not probable that an outflow of
resources will be required to settle the obligation;

(b) a present obligation when no reliable estimate is
possible; and

(c) a possible obligation arising from past events
where the probability of outflow of resources is
not remote.

Contingent Assets are neither recognised, nor
disclosed.

Provision, Contingent Liabilities and Contingent
Assets are reviewed at each balance Sheet date.

v) Dividend

The Company recognises a liability to make cash
distributions to equity holders when the distribution
is authorised and the distribution is no longer at the
discretion of the Company. As per the Companies
Act,2013 in India, a distribution is authorised when
it is approved by the shareholders. A corresponding
amount is recognised directly in equity.

w) Segment Reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker.

1.3 Key accounting estimates and judgements

The preparation of the Company’s financial
statements requires the management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
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 judgements
are:

a. Property Plant & Equipment - Property, plant and
equipment represent a significant proportion of
the asset base of the Company. The charge in
respect of periodic depreciation is derived after
determining an estimate of an asset’s expected
useful life and the expected residual value at
the end of its life. The useful lives and residual
values of Company’s assets are determined by
management at the time the asset is acquired
and reviewed at the end of each reporting period.
The lives are based on historical experience with
similar assets as well as anticipation of future
events, which may impact their life, such as
changes in technology.

b. Provisions - Provision is recognised when the
Company has a present obligation as a result of
past event and it is probable that an outflow of
resources will be required to settle the obligation,
in respect of which a reliable estimate can be
made. These are reviewed at each balance
sheet date adjusted to reflect the current best
estimates.

c. Taxes - Significant judgements are involved in
determining the provision for income taxes,
including amount expected to be paid / recovered
for uncertain tax positions. In assessing the
realizability of deferred tax assets arising from
unused tax credits, the management considers
convincing evidence about availability of
sufficient taxable income against which such
unused tax credits can be utilized. The amount
of the deferred income tax assets considered
realizable, however, could change if estimates of
future taxable income changes in the future

d. Defined Benefit Obligations - The cost of defined
benefit gratuity plans, and post-retirement
medical benefit is determined using actuarial
valuations. The actuarial valuation involves
making assumptions about discount rates,
future salary increases, mortality rates and
future pension increases. Due to the long-

term nature of these plans, such estimates are
subject to significant uncertainty

1.4 Recent Accounting Pronouncements

i. The Company has applied the following
amendments for the first time for their annual
reporting period commencing April 1,2024 :

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.
During 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 lease back transactions, applicable
from April 1, 2024. The Company has assessed
that there is no significant impact on its financial
statements”

ii. New Standards/Amendments notified but not
yet effective:

Ind AS 21- Effects of Changes in Foreign Exchange

These amendments aim to provide clearer
guidance on assessing currency exchangeability
and estimating exchange rates when currencies
are not readily exchangeable. The amendments
are effective for annual periods beginning on or
after April 1, 2025.

32 c Corporate Social Responsibility

In accordance with the provisions of Section 135 of the Companies Act, 2013, the applicability of Corporate Social Responsibility (CSR)
is determined based on the financial thresholds prescribed therein. For the financial years 2023-24 and 2024-25, the Company does
not meet the criteria specified under Section 135 and, accordingly, the constitution of a CSR Committee and related disclosures are not
applicable. Further, pursuant to the Composite Scheme of Arrangement involving the merger of Chembond Clean Water Technologies
Limited and the demerger of the CC & WT Business Undertaking of Chembond Chemicals Limited into the Company, the financials of
the current and preceding financial years include the effect of the said Scheme, accounted for using the pooling of interest method
which has inclusion of CSR expenditure incurred by CCWTL.

35 SEGMENT REPORTING

The Company is engaged in the manufacture, trading and providing services of Specialty Chemical products, which, in the
context of Ind AS 108 - Operating Segments, specified under Section 133 of the Companies Act, 2013, is considered as a
single business segment of the Company.

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker.

The Board of Directors of the Company has been identified as the Chief Operating Decision Maker, which reviews and
assesses the financial performance and makes strategic decisions.

Revenue from a single external customer is not in excess of 10% of the total revenue for the year.

B. Measurement of fair values

Ind AS 107, ‘Financial Instrument - Disclosure’ requires classification of the valuation method of financial instruments
measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs
used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for
identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements).
Fair value of derivative financial assets and liabilities are estimated by discounting expected future contractual cash flows
using prevailing market interest rate curves. The three levels of the fair-value-hierarchy under Ind AS 113 are described
below:

Level 1: Heirarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If
all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is included in level
3. e.g. unlisted equity securities.

Transfers between Levels

There are no transfers betweeen the levels

C. Financial risk management

The Company’s activities expose it to Credit risk, liquidity risk and market risk.

i. Risk management framework

Risk Management is an integral part of the Company’s plans and operations. The Company’s board of directors has
overall responsibility for the establishment and oversight of the Company risk management framework. The board of
directors is responsible for developing and monitoring the Company risk management policies.

The Risk Management 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 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.

ii. 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 and
investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.

The carrying amount of financial assets represents the maximum credit exposure.

Trade and other receivables

Credit risk is the risk of possible default by the counter party resulting in a financial loss.

The Company manages credit risk through various internal policies and procedures setforth for effective control over
credit exposure. These are managed by way of setting various credit approvals,evaluation of financial condition before
supply terms, setting credit limits, industry trends,ageing analysis and continuously monitoring the creditworthiness
of customers to which the Company grants credit terms in the normal course of business.

Based on prior experience and an assessment of the current economic environment, management believes that
sufficient provision is made based on expected credit loss model for credit risk wherever credit is extended to
customers.

Cash and cash equivalents

Credit risk from balances with banks is managed by the Company’s treasury department in accordance with the
Company’s policy. Investment of surplus funds are made in mainly in mutual funds with good returns and with high
credit ratings assigned by International and domestic credit ratings agencies.

Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.

iii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The
Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to
the Company’s reputation.

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes
in market rates and prices (such as interest rates, foreign currency exchange rates). Market risk is attributable to all
market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long¬
term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk
and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and
borrowing activities and revenue generating and operating activities in foreign currencies.

a) Currency risk

The Compnay is exposed to currency risk to the extent that there is a mismatch between the currencies in
which sales, purchase, and other expenses are denominated and the functional currency of the Company. The
functional currency of the Company is Indian Rupees (INR). The currencies in which these transactions are
primarily denominated USD.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. Investment committee manages and constantly reviews the interest rate
movements in the market. This risk is mitigated by the Company by investing the funds in varioustenors depending
on the liquidity needs of the Company. The Company’s exposures to interest rate risk is not significant.

37 Employee Benefit obligations

(A) Defined Contribution Plan

Contributions are made to Employee Provident Fund (EPF), Employees State Insurance Scheme (ESIC) and other
Funds which covers all regular employees. Both the employees and the Company make predetermined contributions
to the Provident Fund and ESIC. The contributions are normally based on a certain percentage of the employee’s
salary. Amount recognised as expense in respect of these defined contribution plans, is as detailed below :

43 Additional regulatory information not disclosed elsewhere in the financial information

A The Company do not have any Benami property and no proceedings have been initiated or pending against the
Company and its Indian

subsidiaries for holding any Benami property, under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and
the rules made thereunder.

B The Company has no transactions with struck off companies under section 248 of the Companies Act, 2013 or section
560 of the Companies Act, 1956.

C The Company have 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:

directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Group (Ultimate Beneficiaries) or

provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

D The Company have 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 Group shall:

directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party(Ultimate Beneficiaries) or

provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

E The Company have not undertaken 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).

F The Company have not traded or invested in Crypto currency or Virtual Currency during the current or previous year.

G The Company have not been declared as a ‘Wilful Defaulter’ by any bank or financial institution (as defined under the

Companies Act, 2013) or consortium thereof, in

accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

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

44 Capital Management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital
is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.

As at 31st March, 2025, the Company has only one class of equity shares and has no other long term borrowings. Consequent
to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal
capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its
long term financial plans.

47 Working Capital Facilities

Details of credit facilities from banks:

The Company has sanctioned credit facilities from Bank of India 150 lakhs (i.e cash credit facility - 100.00 lakhs and Bank
Guarantee - 50.00 lakhs) The Company has not utilised cash credit facilities at the year end.

Terms of loan

a) The credit facility carries interest rate of Bank Of India, currently 9.81% p.a. (interest payable on monthly rests).

b) The credit facility is secured by : Hypothecation of stocks and bookdebts.

Utilisation of borrowings :

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

(b) The quarterly returns/statements of current assets filed by the Company with banks or financial institutions in relation
to secured borrowings wherever applicable, are in agreement with the books of accounts.

48 Audit Trail

The Ministry of Corporate Affairs (MCA) has issued a notification - Companies (Accounts) Amendment Rules, 2021 which
is effective from 1st April, 2023. The amendment requires that every company which uses an accounting software for
maintaining its books of account shall use an accounting software where there is feature of recording audit trail of each and
every transaction and further creating an edit log of each change made to the books of account along with the date when
such changes were made and ensuring that the audit trail cannot be disabled.

The Company uses an accounting software for maintaining books of account which has a feature of recording audit trail
and edit log facility and that has been operative throughout the financial year for the transactions recorded in the software
impacting books of account at the application level. The software being managed on public cloud, users do not have access
to enable, disable, deactivate or tamper with the audit trail setting.

The Company also uses software for payroll application and employee reimbursement. In both the software there is a
feature of audit log for recording audit trail and the same cannot be disabled or modified.

The audit trail feature is not enabled at the database level in respect of these software.

49 Events occurring After Balance sheet date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of
the financial statements to determine the necessity for recognition and / or reporting of any of these events and transactions
in the financial statements. Pursuant to the Composite Scheme of Arrangement approved by the Hon’ble NCLT on April 7,
2025 Further the Company has filed the certified copy of the said order with the Registrar of Companies on 3rd May 2025.
These events, occurring after the reporting date but before the approval of the financial statements, have been Adjustred
and Disclosed in accordance with Ind AS 110.

50 Accouting Treatment as per IND AS 103 - Business Combination

Pursuant to the Composite Scheme of Arrangement the following transactions related to CCSL were effected:

Demerger of (WT) and (CC (Undertaking of CCL and transfered to CCSL

The Water Technologies (WT) and Construction Chemicals (CC) business undertaking of Chembond Material Technologies
Limited (“the Demerged Company” formarly known as Chembond Chemicals Limited) was demerged and transferred to
Chembond Chemical Specialties Limited (“CCSL” or “the Resulting Company”) with effect from the Appointed Date, i.e.,
1st April 2024.

Amalgatmation of CCWTL with CCSL

Subsequently, Chembond Clean Water Technologies Limited (CCWTL) was amalgamated with CCSL as part of the same
Scheme.

The above transactions has been accounted for as a common control business combination in accordance with Appendix
C of Ind AS 103 - Business Combinations, using the pooling of interest method. Accordingly:

(a) The assets, liabilities, and reserves of the CC&WT Business of CCL and of CCWTL have been transferred to and vested
in CCSL at their respective carrying values.

(b) The standalone financial statements for the year ended 31st March 2025 includes the merged financial figures of the
CC&WT Business and CCWTL for the relevant period as per the method of accounting prescribed in the Scheme and
in accordance with principles of Indian Accounting Standards, including IND AS 103 (Business Combinations).

(c) The comparative figures for the year ended 31st March 2024, have been restated to include the corresponding
financial results of the CC&WT Business and CCWTL for those periods, to ensure comparability.

51 Composite scheme of arrangement:

Chembond Chemicals Limited (Demerged Company / CCL), Chembond Chemical Specialties Limited (“Resulting
Company”/ CCSL / Company), Chembond Clean Water Technologies Limited (CCWTL), Chembond Material Technologies
Private Limited (CMTPL), Phiroze Sethna Private Limited (PSPL) and Gramos Chemicals India Private Limited (GCIPL) and
their respective shareholders have entered into a Composite Scheme of Arrangement under Section 230 to 232 of the
Companies Act, 2013 (“Scheme”) which contemplates Amalgamation of CMTPL, PSPL and GCIPL with CCL, demerger of
“Construction Chemicals and Water Technologies chemicals” business from CCL to CCSL and amalgamation of CCWTL
into CCSL, as on the Appointed Date of 1st April, 2024. The said Scheme was approved by the National Company Law
Tribunal, Mumbai Bench (“NCLT”) on 7th April, 2025 and the Company has received the certified order copy on 22nd April
2025. The Company has filed the certified copy of the said order with the Registrar of Companies for CCL, CCSL, CMTPL,
PSPL, GCIPL and CCWTL on 29/04/2025, 30/04/2025, 01/05/2025, 01/05/2025, 02/05/2025 and 03/05/2025 respectively,
as such the Scheme has become effective from the respective dates for all the companies involved in the Scheme.

Upon demerger, the Resulting Company is required to issue its equity shares to each shareholder of the Demerged Company
as on record date in 1:2 swap ratio (i.e., for every 1 equity share held in Demerged Company, two shares of '' 5/- each
will be issued by the Resulting Company). The said allotment of 2,68,96,576 shares has been approved by the Allotment
Committee of CCSL on 13/05/2025 and the equity shares were allotted to the shareholders in the said ratio.

52 The company has evaluated the option permitted under section 115BAA of the Income Tax Act, 1961 (the “Act”) as
introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Company has presently decided to opt
for tax structure prescribed under Section 115BAA of the Income Tax Act, 1961 in current year.

53 The previous year figures have been regrouped, reallocated or reclassified wherever necessary to conform to current year
classification and presentation.

As per our attached report of even date

F_0r S H B A & CO LLP On behalf of the Board of Directors

(Formerly known as Bathiya & Associates LLP)

C^har^tered A^ccou^ntants Nirmal V. Shah Sameer V. Shah

FRN - 101046W/W100063 Director Director

DIN:00083853 DIN:00105721

Jatin A. Thakkar Prachi Mahadik Kiran Mukadam

Partner Chief Financial Officer Company Secretary

Membership No. : 134767