Terms and rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of '5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

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.

During the period of 5 years immediately preceeding the balance sheet date, the company has neither issued or allotted any class of equity shares for consideration in cash, or by way of bonus issue or for any consideration other than cash, nor the company has bought back its own equity shares from its shareholders.

Nature & Purpose:

a. General Reserve:

General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss.

b. Securities Premium :

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

c. Retained Earnings:

Retained Earnings are the profits of the Company earned till date net of appropriations.

d. Capital Reserve:

The capital reserve represents the excess of net assets acquired over the consideration paid during business combinations such as amalgamations, mergers, or acquisitions. This reserve arises primarily from the cancellation of shares of the amalgamated or merged entities and is maintained to facilitate future corporate restructuring activities, including mergers, demergers, or other forms of business combinations.

e. Share Option Outstanding Reserve:

The Company has a stock option scheme under which option to subscribe for the company's shares have been granted to certain executives and senior employees and key managerial personnel. The share option outstanding reserve is used to recognize the value of equity settled share based payments provided to employees, including certain key management personnel as a part of their remuneration.

b Corporate Social Responsibility

As per section 135 of the Companies Act 2013, a CSR committee has been formed by the Company. During the year funds were utilised for Promotion of Child Education & towards women empowerment and education which are specified in Schedule VII of the Companies Act, 2013.

- Gross amount required to be spent by the company during the year ' 21.55 lakhs. (Previous Year '18.60 lakhs)

- Amount spent during the year is '21.55 lakhs (Previous Year '18.60 lakhs)

35 Share based paymentsDescription of share based payment arrangement Chembond ESOP 2025 Scheme

The Company at its 50th Annual General Meeting held on 14th August 2025, has approved Chembond Material Technologies Limited Employee Stock Option Plan 2025 ("Chembond ESOP 2025") for granting 400,000 stock options to certain eligible employees.

The plan is administered by Nomination and Remuneration Committee of the Board ("the Committee") also known as Compensation Committee in compliance with the provision of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and other applicable provision of Companies Act 2013 for the time being in force. These options are granted to certain employees including certain key managerial personnel on vesting condition of time basis, company performance and individual performance as specified in the grant letter issued to each employee.

3 months average of daily opening and closing price of the equity shares of the company on the recognized stock exchange having highest trading volume on which the equity shares of the company are listed on the date immediately prior to the grant date subject to maximum discount of 30%.

36 Segment Reporting

As per Ind AS 108 - Operating Segment (‘Ind AS 108’), if a financial statement contains both consolidated financial statements of a Company that is within the scope of this Ind AS as well as the Company separate financial statements, segment information is required only in the consolidated financial statements. Accordingly, information required to be presented under Ind AS 108 - Operating Segment has been given in the consolidated financial statements.

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 audit 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 counter party 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 set forth 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.

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 Company 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:

a The Company has not entered into forward contracts to hedge the foreign currency risks arising from amounts designated in foreign currency.

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 various tenors depending on the liquidity needs of the Company. The Company’s exposures to interest rate risk is not significant.

38 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.

The above sensitivity analyses have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the reporting date. In practice, generally it does not occur. When we change one variable, it affects to others. In calculating the sensitivity, project unit credit method at the end of the reporting period has been applied.

40 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 low debt. 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.

(Refer Note. 43 for Debt/Equity ratio)

47 Additional regulatory information not disclosed elsewhere in the financial information

A The Company does 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 does not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956, during the FY 25-26 & FY 24-25

C The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: 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 has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the 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 has 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 has not traded or invested in Crypto currency or Virtual Currency during the current or previous year.

G The Company has 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.

48 Working Capital Facilities:-Details of credit facilities from banks:

The Company has sanctioned credit facilities from HDFC Bank of ' 472.50 lakhs and Bank of India of ' 100.00

lakhs (i.e cash credit facility - '320.00 lakhs, letter of credit - ' 209.60 lakhs and Bank Guarantee - ' 42.89

lakhs)

The Company has not utilised cash credit facilities at the year end.

Terms of loan

a) The credit facility carries interest at mutually agreed rates,(interest payable on monthly rests).

b) The credit facility is secured by : Hypothecation of stocks and book debts, Factory land & building. 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.

49 Audit Trail

The Company uses accounting software, payroll application and employee reimbursement software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software/application. The software being managed on public cloud, users do not have access to enable, disable, deactivate or tamper with the audit trail setting.

The audit trail feature is not enabled at the database level for the accounting software.

The Company has preserved the audit trail in compliance with statutory record retention requirements.

50 Exceptional Items:

a. Pursuant to the notification of the new Labour Codes effective from 21st November, 2025, the Company based on actuarial valuation has for the year ended 31st March, 2026, accounted for the impact of expenditure on account of Gratuity and the same is disclosed as an exceptional item.

b. Exceptional item of '154.74 lakhs, accounted in FY 24-25 pertains to full and final settlement of insurance claim related to replacement value of Property Plant & Equipment that had damaged due to fire incident occurred at the Tarapur plant in the month of April 2022.

51. 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 continue with the existing tax structure.

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