(ii) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend, if any, proposed by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting, except in case of interim divdend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves

i. General reserve

General reserve forms part of the retained earnings and is permitted to be distributed to shareholders as part of dividend.

ii. Retained Earnings

Retained earnings comprises of accumulated balance of profits / (losses) of current and prior years including transfers made to / from other reserves from time to time. The reserve can be utilized or distributed by the Company in accordance with the provisions of the Companies Act, 2013.

iii. Re-measurement of Defined benefit plans

The re-measurement of defined benefit plan comprises of actuarial gains / losses, actual return on plan asset and change in effect of asset ceiling, if any.

Information about the Company's exposure to liquidity risk and interest rate risk is included in Note 26.

Secured borrowings and assets mortgaged/ hypothecated as security

(a) All secured borrowings are secured by mortgage of assets and hypothecation of vehicles

(b) The carrying amounts of financial and non-financial assets mortgaged/ hypothecated as security for current and non-current borrowings are disclosed in note 33.

(c) Working Capital Loan availed to meet the Liquidity mismatch arising out of Covid-19 out-break.

(d) Term Loans were used fully for the purpose for which the same were obtained.

(e) The Company is adequately submitting monthly statements of current assets to the banks which are as per the books

of accounts maintained by the company. ,

$ Provision for Powder Factor Deduction

a) The provision for powder factor deduction is due to non achievement of the required performance of the product. The provision is based on estimates made from technical evaluation and historical data associated with similar services.

b) The Company's main clients are PSUs where in Powder Factor deduction is determined after a substantial period of time, the consequential claims and counterclaims on performance bonus/deductions affect the trade receivables on account of which the substantial part of balances outstanding as trade receivables are not confirmed by them. However, the management is confident that such receivables are stated at their realizable value and adequate provisions are made in the accounts, wherever required.

Provision for warranties

Letter received from M/s. Manganese Ore India Limited (MOIL) towards risk purchase withholding of Rs.63.78 lakhs, against which Rs.44.33 lacs has been provided under Expected Credit Loss and Rs.19.45 lakhs provided under Claims & Warrianties, which is on account of non supply of Explosives to M/s.Manganese Ore India Limited (MOIL). This contract is for 1 year from 1st July 22 till 30th June 23. If the Company would have supplied the quantity as per Contract then the Company would have met with a loss of Rs.154 lakhs. Now the same is settled during the year.

(ii) Post-employment benefit plans Gratuity

The Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan') covering eligible employees of the company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company. The gratuity plan is a partly funded plan and the company makes contributions to Insurer managed funds in India. The company does not fully fund the liability.

(iii) Defined Contribution plans

TThe company also has certain defined contribution plans. Contributions are made to provident fund, Employers Contribution to Employees' State Insurance & super annuation schemes in India for employees. The Provident Fund and the State defined Contribution plans are operated by the Regional Provident Fund Commissioner and the Superannuation Fund is funded to LIC of India. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan is Rs. 209.06 Lakhs (PY Rs. 189.81 Lakhs).

(iv) Impact of introduction of new Labour Codes

On November 21, 2025, the Government of India notified the four Labour Codes - 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 - consolidating 29 existing labour laws.

The Company has assessed and recognised the incremental impact of these changes on the basis of opinion of Actuary obtained and the best information available, consistent with the guidance provided by the Institute of Chartered Accountants of India. The incremental impact is on account of gratuity of Rs 8.51 lakhs due to change in wage definition and charged to the Statement of Profit & Loss. The Company continues to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects of the Labour Code and would provide appropriate accounting effect on the basis of such developments as needed.

Employee benefit obligations Risk exposure

The defined benefit plans expose the company to actuarial risk, such as longevity risk, interest rate risk and market (investment) risk. Specific class of employees are covered by the Company for the purpose of Gratuity obligations by investing in group gratuity scheme of LIC of India and for rest of the employees, though not covered by funded obligation, liability has been created based on acturial valuation. In case of employees at one of the unit the liability was based on Management's estimate amounting to Rs.55.83 lacs during the Previous year and from the current year it is based on acturial valuation. (iv) Employer Contributions

Expected contributions to post-employment benefit plans for the year ending 31st March, 2026 are Rs.55.89 Lakhs.

The weighted average duration of the defined benefit obligation is 5.12 years (2025 - 6.64 years) for employees who are covered under group gratuity scheme of LIC of India and 5.82 years (2025 - 5.27 years) for employees who are not covered by group gratuity scheme of LIC of India.

The company's activities expose it to market risk, liquidity risk and credit risk.Market risk is the risk of loss of future earnings, fair value or future cashflows that may result from a change in the price of the financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivable and payables and loans and borrowings.

If the risk exposure is significant then senior management reviews the position and takes decision regarding hedging/other risk strategies to mitigate such risk exposures.

(i) Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market interest rate.The company is not exposed to significant interest rate risk as at the respective reporting dates.

(ii) Foreign currency riskThe Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. The Company transacts business in foreign currencies (primarily USD and Eur). Consequently, the Company has foreign currency trade payables, receivables and Exchange Earner Foreign Currency (EEFC)account and is therefore exposed to foreign exchange risk.These exposures are naturally hedged.

(iv) Trade Receivables & Other Receivables :

Customer credit is managed by each business unit subject to company's established policies, procedures and control relating to customer credit risk management. Trade Receivables are non interest bearing and are generally on 60 days credit term.

An impairment analysis is performed at each reporting date on an individual basis for major clients.

Based on management estimation and data available there is no significant increase in credit risk/credit impaired for individual trade receivables except those disclose in note 5C.

In computation of the expected credit loss, there is no specific provisioning / write off policy for outstanding for more than certain period.

There are no specific forward looking information estimated by the management.

The ageing analysis of the receivables (gross of provision) has been considered from the date the invoice falls due.

An operating segment is a component of the entity that engages in business activities from which it may earn revenue and incur expenses, including revenue & expenses that relate to transactions with any of the company's other components, and for which discrete financial information is available. All operating segments are evaluated based on profit or loss and measured consistently with the profit or loss in the financial statements & are reviewed regularly by the entity's Managing Director to make decisions about resorces to be allocated to the segments and access their performance.

For management purposes, the Company is organised into business units based on its products and services and has 2 reportable segment as follows:-

1) Explosives segment which manufactures cartridge explosives, bulk emulsion explosives.

2) Perlite segment which manufactures cryogenic insulation, industrial filter-aid, horticulture products etc.,

i) Disputed demand in respect of Central sales tax in Maharashtra for the year 2008-09. Amount aggregating Rs.3 Lakhs (PY Rs. 3 Lakhs) is paid under protest against such demand.

ii) During the expansion of the PETN and other plants, the Company had applied for conversion of land in FY 2019-20. A demand of Rs. 56.72 lakhs was raised by the relevant authority in FY 2020-21. Subsequently, based on reassessment of the land, building, and open area, a revised demand was derived aggregating to Rs. 191.72 lakhs (inclusive of the earlier demand of Rs. 56.72 lakhs) in FY 2023-24.

The Company has recognized a provision of Rs. 191.72 lakhs in FY 2023-24 towards the aforesaid demand. However, the payment remains outstanding as at March 31, 2026, due to technical issues being faced on the regulatory payment portal.

The demand order does not specify the rate of interest applicable on delayed payment. Accordingly, the amount of interest, if any, is presently not ascertainable and has not been provided for in the financial statements. The same has been disclosed as a contingent liability.

iii) Disputed demand in respect of Karnataka GST for the period from 2017-2021 towards disallowance of Rs.151.50 lacs. The Company has gone in Appeal for the same. The Company has received the favorable order.

iv) Disputed demand of income tax for the assessment year 2015-16, 2016-17, 2017-18, 2018-19, 2019-2020, 2020-21 & 2022-23. Amount aggregating Rs.31.59 Lakhs (PY Rs.31.59 Lakhs) was paid under protest against such demand and the effect of refund in the financials based on the favourable order received by the company.

v) Letter of credits and bank guarantees issued to suppliers/customers

Note: a) The company has process in place to identify the impacts of the ongoing litigations on the Financial Statements.

b) The company does not have any long term contract (including Derivatives) on which there would be forseeable losses.

Note: The company does not have any long term contract (including Derivatives) on which there would be forseeable losses.

Note 32: Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year and are adjusted for the effect of all dilutive potential equity shares.

*Note: In the absence of purchase price of share held by above Companies, Face value is considered for reporting purpose

Note 37: The disclosure on the following matters required under Schedule III as amended not being relevant or applicable

in case of the Company, same are not covered such as

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

b) There are no transaction which have not been recorded in the books that has been surrendered or disclosed as income during the year in the tax assessments under Income Tax Act, 1961 (such as search or survey or any other relevant provisions of the Income Tax Act, 1961).

c) No proceedings have been intiated 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.

d) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

e) The Company has not entered into any scheme of arrangement.

f) No Registration or satisfaction of charges are pending to be filed with Register of Companies (ROC).

g) The provision relating to compliance with number of layers of Companies prescribed under clause (87) of section 2 of the Companies Act is not applicable to the Company.

Note 38: (a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend to 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.

Note 40: Exceptional Item

Refund of Anti Dumping Duty

During FY 2020-21, pursuant to an inquiry conducted and demand raised by the Directorate of Revenue Intelligence (“DRI”) in relation to import of Ammonium Nitrate during FY 2017-18 to FY 2018-19, through one of the suppliers, the Company had paid Anti-Dumping Duty (“ADD”) along with applicable interest aggregating to Rs 359.67 Lakhs. Payment towards ADD of Rs. 233.41 lakhs and towards interest of Rs. 84.35 lakhs was disclosed as an exceptional item in the Statement of Profit and Loss for FY 2020-21. Out of the above, an amount of Rs. 41.91 lakhs paid was claimed towards input tax credit of Integrated Goods and Service Tax (IGST) in FY 2020-21.

During FY 2022-23, the Company received a Show Cause Notice from DRI demanding Rs.56.81 Lakhs, against which the Company filed an appropriate reply. Thereafter, during FY 2024-25, the Commissioner of Customs passed an order levying duty, penalty and other charges aggregating to Rs.1,375.43 Lakhs, against which the Company paid Rs.84.18 Lakhs under protest and filed an appeal before the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The said demands were disclosed as Contingent Liabilities in FY 2022-23 and onwards.

In April 2026, the Hon'ble CESTAT passed a favourable order setting aside the order of the lower authority with consequential relief, if any, as per law. Pursuant thereto, and based on legal advice, the Company is in the process of filing refund application for duty and interest amounting to Rs.233.42 Lakhs and Rs.84.35 Lakhs respectively paid during FY 2020-21, along with Rs.84.18 Lakhs paid during FY 2024-25.

Accordingly, the duty and interest amounting to Rs.317.76 Lakhs charged in Fy 2020-21 to the Statement of Profit and Loss has been recognized in the Statement of Profit and Loss for the year as Exceptional Income and disclosed as “Duty Receivable” under Other Financial Assets alongwith Rs.84.18 Lakhs paid under protest during FY 2024-25.

The company is reasonably confident that the said amount will be refunded by the appropriate authority in due course.”

Note 42:

The financial statements were authorised for issue by Board of Directors at their meeting held on 27th May, 2026.