w) Provisions and contingent liabilities

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be
reliably estimated. These are reviewed at each year end and reflect the best current estimate. Provisions are not
recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The increase
in the provision due to the passage of time is recognised as interest expense.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not probable that
an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

x) Employee benefits

i) Defined benefit plan

• Gratuity

Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by
an actuary appointed for the purpose as per projected unit credit method at the end of each financial year.
The liability or asset recognised in the Standalone Balance Sheet in respect of defined benefit gratuity
plans is the present value of the defined benefit obligation at the end of the reporting period less the fair
value of plan assets. The liability so provided is paid to a trust administered by the trustees nominated by
the Company, which in turn invests in eligible securities to meet the liability as and when it becomes due
for payment in future. Any shortfall in the value of assets over the defined benefit obligation is recognised
as a liability with a corresponding charge to the Standalone Statement of Profit and Loss.

The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows with reference to market yields at the end of the reporting period on government bonds that have
terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate at the beginning of the period to the net
balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee
benefit expense in the Standalone Statement of Profit and Loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur directly in other comprehensive income. They
are included in retained earnings in the Statement of changes in equity and in the Standalone Balance Sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognised immediately in profit or loss as past service cost.

• Provident fund

Provident fund for certain eligible employees is managed by the Company through the Atul Products Ltd
- Ankleshwar Division Employees Provident Fund Trust in line with the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the provident
fund authorities. The contributions by the employer and employees together with the interest accumulated
thereon are payable to employees at the time of their retirement or separation from the Company, whichever
is earlier. The benefits vest immediately on rendering of the services by the employee. Any shortfall in the
fair value of assets over the defined benefit obligation is recognised as a liability, with a corresponding
charge to the Standalone Statement of Profit and Loss.

ii) Defined contribution plan

Contributions to defined contribution schemes such as contribution to provident fund, superannuation fund,
employees state insurance scheme, national pension scheme and labour welfare fund are charged as an expense
to the Standalone Statement of Profit and Loss based on the amount of contribution required to be made as
and when services are rendered by the employees. The above benefits are classified as defined contribution
schemes as the Company has no further defined obligations beyond the monthly contributions.

iii) Short-term employee benefits

All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia, medical
benefits, etc, are recognised in the year in which the employees render the related service and are presented as
current employee benefit obligations. Termination benefits are recognised as an expense as and when incurred.

Short-term employee benefits are provided at undiscounted amount during the accounting period based on
service rendered by employees.

iv) Other long-term employee benefits

The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. They are therefore measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
end of the reporting period using the projected unit credit method. The benefits are discounted using the market
yields at the end of the reporting period that have terms approximating to the terms of the related obligation.
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised
in profit or loss.

y) Research and Development expenditure

Expenditure on research is recognised as an expense when it is incurred. Expenditure on development which does
not meet the criteria for recognition as an intangible asset is recognised as an expense when it is incurred. Items of
property, plant and equipment and acquired intangible assets utilised for research and development are capitalised
and depreciated in accordance with the policies stated for property, plant and equipment and intangible assets.

z) Earnings per share

Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted EPS, the net profit for the period attributable to equity shareholders and the
weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive
potential equity shares.

aa) Ordinary shares

Ordinary shares are classified as equity share capital. Incremental costs directly attributable to the issuance of
Ordinary shares, share options and buy-back are recognised as a deduction from equity, net of any tax effects.

Critical estimates and judgements

Preparation of the Standalone Financial Statements requires use of accounting estimates, judgements and assumptions,
which by definition, will seldom equal the actual results. Appropriate changes in estimates are made as the Management
becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the
Standalone Financial Statements in the period in which changes are made and, if material, their effects are disclosed
in the notes to the Standalone Financial Statements. This Note provides an overview of the areas that involve a higher
degree of judgements or complexity and of items that are more likely to be materially adjusted due to estimates and
assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates
and judgements is included in relevant notes together with information about the basis of calculation for each affected
line item in the Standalone Financial Statements.

The areas involving critical estimates or judgements are:

i) Estimation for income tax: Note 1 (e)

ii) Estimation of useful life of tangible assets: Note 1 (h)

iii) Estimation of provision for inventories: Note 1 (q)

iv) Allowance for credit losses on trade receivables: Note 1 (o)

v) Estimation of claims | liabilities: Note 1 (w)

vi) Estimation of defined benefit obligations: Note 1 (x)

vii) Fair value measurements: Note 29.7

viii) Impairment: Note 1 (I)

a) Rights, preferences and restrictions

The Company has one class of shares referred to as equity shares having a par value of H10 each.

i) Equity shares

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

Each holder of equity shares is entitled to one vote per share.

ii) Dividend

The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board is subject to the
approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

b) Shares reserved for allotment at a later date

56 equity shares are held in abeyance due to disputes at the time of earlier rights issues.

c) Equity shares movement during five years preceding March 31, 2026

The aggregate number of fully paid up equity shares bought back in immediately preceding five years ended on March 31,
2026 are 2,19,978 (March 31, 2025: 2,19,978 shares).

Refer Standalone Statement of Changes in Equity for detailed movement in other equity balance.

Nature and purpose of reserves

a) Retained earnings

Retained earnings are the profits that the Company has earned till date less any transfers to general reserve, any
transfers from or to other comprehensive income, dividends or other distributions paid to shareholders.

b) Capital redemption reserve

In accordance with Section 69 of the Companies Act, 2013, the Company has created capital redemption reserve
equal to the nominal value of the shares bought back as an appropriation from general reserve.

c) FVTOCI equity instruments

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 within the FVTOCI equity instruments reserve within
equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities
are derecognised.

Note 14 Other equity (continued)

d) Cash flow hedge reserve

The Company uses hedging instruments as part of its management of foreign currency risk associated with its
highly probable forecast sale and inventory purchases and interest rate risk associated with variable interest rate
borrowings. For hedging foreign currency risk, the Company uses foreign currency forward contracts, foreign currency
option contracts and interest rate swaps. They are designated as cash flow hedges. To the extent that these hedges
are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve.
Amounts recognised in the cash flow hedging reserve is reclassified to profit or loss when the hedged item affects
profit or loss (for example, sales and interest payments). When the forecast transaction results in the recognition of
a non-financial asset (for example, inventory), the amount recognised in the cash flow hedging reserve is adjusted
against the carrying amount of the non-financial asset.

i) Information about individual provisions and significant estimates:

a) Compensated absences

The compensated absences cover the liability for sick and earned leave. Out of the total amount disclosed
above, the amount of H 9.79 cr (March 31, 2025: H 8.10 cr) is presented as current since the Company does not
have an unconditional right to defer settlement for any of these obligations. However, based on past experience,
the Company does not expect all employees to take the full amount of accrued leave or require payment within
the next 12 months.

b) Others

Regulatory and other claims

The Company has provided for certain regulatory and other charges for which it has received claims. The
provision represents the unpaid amount that it expects to incur | pay for which the obligating event has already
arisen as on the reporting date.

Effluent disposal

The Company has provided for expenses it estimates to incur for safe disposal of effluent in line with the
regulatory framework it operates in. The provision represents the unpaid amount it expects to incur for which
the obligating event has already arisen as on the reporting date.

Notes:

a) Security details:

Working capital loan repayable on demand from banks (March 31, 2026: H 6.50 cr, March 31, 2025: H 8.06) is secured
by hypothecation of tangible current assets, namely, inventories and book debts of the Company to the extent of
individual bank limit as mentioned in joint consortium documents. This also extends to guarantees and letters of
credit given by the bankers aggregating to H 242.59 cr (March 31, 2025: H 214.93 cr).

b) The quarterly returns or statements comprising (stock statements, book debt statements and other stipulated
financial information) filed by the Company with such banks or financial institutions are in agreement with the
unaudited books of account of the Company of the respective quarters.

Note 29.6 Employee benefit obligations (continued)

is calculated based on wages with applicable cap as per prevailing Act or the Company scheme, whichever is more
beneficial to employees. Gratuity is payable at the time of separation or retirement from the Company, whichever is
earlier. The benefit vests after five years of continuous service.

The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally
separate from the Company. The trustees nominated by the Company are responsible for the administration of
the plan. The funding of these plans are based on gratuity fund’s actuarial measurement framework set out in the
funding policies of the plan. Employees do not contribute to any of these plans.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are
detailed below:

i) Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields, if plan assets underperform
this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades
and in government securities. These are subject to interest rate risk. The Company has a risk management strategy
where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. All deviations from the
range are corrected by rebalancing the portfolio. It intends to maintain the above investment mix in the coming years.

ii) Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value
of other bond holdings.

The Company actively monitors how the duration and the expected yield of the investments match the expected
cash outflows arising from the employee benefit obligations. It has not changed the processes used to manage its
risks from previous periods. Investments are well diversified, such that the failure of any single investment will not
have a material impact on the overall level of assets. A large portion of assets consists of insurance funds; it also
invests in corporate bonds and special deposit schemes. The plan asset mix is in compliance with the requirements
of the respective local regulations.

Expected contributions to post-employment benefit plans for the year ending March 31, 2027, are H 7.52 cr.

The weighted average duration of the defined benefit obligation is five years (2024-25: six years). The expected
maturity analysis of gratuity is as follows:

Provident fund

The Company has established an employee provident fund trust for employees based at Ankleshwar. It is administered
by the Company to which both the employee and the employer make monthly contributions equal to 12% of basic salary
of employee. The contribution of the Company to the provident fund for all employees is charged to the Standalone
Statement of Profit and Loss. In case of any liability arising due to a shortfall between the return from its investments
and the administered interest rate, the same is required to be provided for by the Company. The actuary has provided an
actuarial valuation and indicated that the interest shortfall liability is H nil. The Company has contributed the following
amounts towards provident fund during the respective period ended:

Level 1: This includes financial instruments measured using quoted prices. The fair value of all equity instruments that are
traded on the stock exchanges is valued using the closing price as at the reporting period.

Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter
derivatives) is determined using valuation techniques, which maximise the use of observable market data and rely as
little as possible on entity-specific estimates. The mutual fund units are valued using the closing net assets value. 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 is not based on observable market data, the instrument is included in level 3.

b) Valuation techniques used to determine fair value

Specific valuation techniques used to value financial instruments include:

i) the use of quoted market prices or dealer quotes for similar instruments,

ii) the fair value of forward foreign exchange contracts is determined using forward exchange rates at the
Standalone Balance Sheet date,

iii) the fair value of foreign currency option contracts is determined using the Black Scholes valuation model,

iv) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in levels 1, 2 and 3.

Note 29.7 Fair value measurements (continued)
c) Valuation processes

The Finance department of the Company includes a team that performs the valuations of financial assets and
liabilities with assistance from independent external experts when required, for financial reporting purposes,
including level 3 fair values.

The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, dividend receivables,
other receivables, trade payables, capital creditors, security deposits, employee benefits payable, other liabilities are
considered to be the same as their fair values due to the current and short-term nature of such balances.

Note 29.8 Financial risk management

Risk management is an integral part of the business practices of the Company. The framework of risk management
concentrates on formalising a system to deal with the most relevant risks by building on existing management practices,
knowledge and structures. With the help of a reputed international consultancy firm, the Company has developed and
implemented a comprehensive risk management system to ensure that risks to the continued existence of the Company
as a going concern and to its growth are identified and remedied on a timely basis. While defining and developing
the formalised risk management system, leading standards and practices have been considered. The risk management
system is relevant to business reality, pragmatic and simple and involves the following:

i) Risk identification and definition: Focused on identifying relevant risks, creating | updating clear definitions to
ensure undisputed understanding along with details of the underlying root causes | contributing factors.

ii) Risk classification: Focused on understanding the various impacts of risks and the level of influence on its root
causes. This involves identifying various processes generating the root causes and clear understanding of risk
interrelationships.

iii) Risk assessment and prioritisation: Focused on determining risk priority and risk ownership for critical
risks. This involves assessment of the various impacts taking into consideration risk appetite and existing
mitigation controls.

iv) Risk mitigation: Focused on addressing critical risks to restrict their impact(s) to an acceptable level (within the
defined risk appetite). This involves a clear definition of actions, responsibilities and milestones.

v) Risk reporting and monitoring: Focused on providing to the Board and the Audit Committee periodic information
on risk profile evolution and mitigation plans.

a) Management of liquidity risk

The principal sources of liquidity of the Company are cash and cash equivalents, investment in mutual funds,
borrowings and the cash flow that is generated from operations. It believes that the current cash and cash equivalents,
tied up borrowing lines and cash flow that are generated from operations are sufficient to meet the requirements.
Accordingly, liquidity risk is perceived to below.

Note 29.9 Capital management

The primary objective of capital management is to maximise shareholder value, safeguard business continuity and
support the growth of the Company. It determines the capital requirement based on annual operating plans and long¬
term and other strategic investment plans. The funding requirements are met through equity and operating cash
flows generated. The Company is not subject to any externally imposed capital requirements (refer Note 29.19 (b) for
debt- equity ratio).

Note 29.10 Segment information

In accordance with Ind AS 108, 'Operating Segments', segment information has been given in the Consolidated Financial
Statements of Atul Ltd and therefore, no separate disclosure on segment information is given in the Standalone
Financial Statements.

Note 29.12 Leasesa) As a lessee

The Company has taken various residential and office premises under operating lease or leave and licence
agreements. These are cancellable by the Company, having a term between 11 months and three years and have
no specific obligation for renewal. Payments are recognised in the Standalone Statement of Profit and Loss under
'Rent' in Note 28.

b) As a lessor

i) Operating lease

The Company has entered into operating leases on its office buildings and land. These are cancellable by
the Company, having a term between 11 months and three years and have no specific obligation for real.
Rents received are recognised in the Standalone Statement of Profit and Loss as lease income in Note 22
‘Other income’.

ii) Finance lease

The Company has given a building on finance lease for a term of 30 years and a machine for a term of 10 years.
Future minimum lease payments receivable under finance leases, together with the present value of the net
minimum lease payments (MLP), are as under:

Note 29.16 Offsetting financial assets and liabilities

The Company has not offset any financial asset and financial liability. It offsets a financial asset and a financial liability
when it currently has a legal enforceable right to set-off the recognised amounts and it intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.

a) Master netting arrangements - not currently enforceable

Agreements with derivative counterparties are based on an International Swaps and Derivatives Association, Inc.
Master Agreement. Under the terms of these arrangements, only where certain credit events occur (such as default),
the net position owing | receivable to a single counterparty in the same currency will be taken as owing and all the
relevant arrangements are considered as terminated. As the Company does not presently have a legally enforceable
right of set-off, these amounts have not been offset in the Standalone Balance Sheet.

b) Collateral against borrowings

The Company has hypothecated | mortgaged assets as collateral against a number of its sanctioned line of credit
(Refer Note 17(c) for further information on assets hypothecated | mortgaged as security). In case of default as per
borrowing arrangement, such collateral can be adjusted against the amounts due.

Note 29.21 Other statutory information (required by schedule III to the Companies Act, 2013)

a) The Company has not entered into any such 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.

b) 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.

c) The Company is not declared wilful defaulter by any bank or financial institution or other lender.

d) The Company has not traded or invested in cryptocurrency or virtual currency during the financial year.

e) No proceedings have been initiated or are pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made there under.

f) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of
Companies beyond the statutory period.

Note 29.22 Rounding off

Figure less than H 50,000 have been shown as '0.00' in the relevant notes in these Standalone Financial Statements.

Note 29.23 Authorisation for issue of the Standalone Financial Statements

The Standalone Financial Statements were authorised for issue by the Board of Directors on April 24, 2026.