Your directors present the 19th Annual Report on the business and operations of NAGARJUNA FERTILIZERS AND CHEMICALS
LIMITED (“NFCL”) together with the Audited Financial Statements of your Company for the year ended March 31,2025, and other
accompanying reports, notes and certificates

A.Business and Financial Highlights

The Standalone and Consolidated Financial Results of the Company for the year ended March 31,2025, prepared as per Ind AS
reporting are as under:

Standalone Financial Results Rs in Crore Consolidated Financial Results Rs in Crore

Financial Summary

The Profit after tax for the year was Rs. 2,424.87 crores against
the loss after tax Rs. 1,283.89 crores for the previous year.
The profit before exceptional items for the period is 2434.76 is
mainly due to sale of assets of the company by ACRE under
SARFAESI Act.

Share Capital

The Paid-up Equity Capital of the Company as on March 31,
2025, is Rs.59,80,65,003/- consisting of 59,80,65,003 Equity
Shares of Re.1/- each.

Transfer to Reserves

There has been no transfer to General Reserves during the Fi¬
nancial Year 2024-2025.

Dividend

The Board of Directors of your company, after considering the
operational performance and keeping in view the company's
dividend distribution policy, has decided not to recommend
any Dividend for the year under review.

COMPANY’S AFFAIRS
Plant Operations
Urea

Your Company during the financial year 2024-25 manufactured
2.173 LMT of urea as against 13.102 LMT in the previous year.
The production for the year 2024-25 is less compared to the
usual level, owing to the sale of assets by ACRE to A M Green
Ammonia India private limited on 31.05.2024.

Micro-Irrigation

We did not take up any active production during 2024-25, the
plant ran only for 2 months (active on need basis) to service
some left over orders of 2023-24.

Marketing

Urea

Your Company achieved a sale of manufactured urea of 2.25
LMT compared to 13.08 LMT in the previous year.

The total urea sales for both manufactured and imported urea
was 2.25 LMT compared to 13.08 LMT of previous year.

Other Traded Products
Traded Bulk Products

Your Company could not sell any of the Traded Bulk Products
during the year. In the previous year also, there was no sale of
Traded Bulk Products.

Specialty Fertilizers

Your Company could not sell any of the Water Soluble Fertiliz¬
ers during the year in comparison with sales of 41 MT during
the previous year.

Micro-nutrients

Your Company could not sell any of the Micro-nutrients during
the year. In the previous year also, there was no sale of Mi¬
cro-nutrients.

Supplements and OSR

Your Company could not sell any of the Supplements & OSR
during the year. In the previous year also, there was no sale of
Supplements & OSR.

Customized Fertilizers

Your Company could not sell any of the Customized Fertilizers
during the year. In the previous year also, there was no sale of
Customized Fertilizers.

Environment and Safety
Environment

Your Company continues its mission of protecting the environ¬
ment and has inculcated the concept right down the organi¬
zation. The statutory compliance on environmental matters is
being complied from time to time.

Health &Safety

By following the best practices and with adoption of interna¬
tional standards and procedures, Plant Operations continued.
Your Company as on May 31, 2024, completed 1,07,75,204
accident free man-hours by employees and contractors of the
Company.

Further to strengthen the procedures and practices, MAH in¬
spection at Ammonia Storage Tanks and Cooling Towers Area,
Safe Work Practices Audit, PPE Audit etc., were conducted.
Refresher Training has been given to Rescue Squad and basic
Fire Fighting techniques to Associates.

Change in the nature of business and material changes
and commitments

There were no Property, Plant & Equipment (PPE) available
for operations in view of recovery from sale of Assets by the
Lenders. Ammonia/Urea plants operated up to 4th June 2024,
i.e., one plant till 31st May 2024 and the other plant till 04th
June 2024, Micro Irrigation Plants operated till 31st May 2024
representing the discontinuation of business operations and
effected the going concern of the Company since June, 2024
quarter. Post the recovery by Assets Care Reconstruction En¬
terprise (ACRE), Secured Creditor, there are no physical as¬
sets (which includes all Property, Plant, and Equipment (PPE))
remaining with the company.

Settlement of debt from sale of assets by Secured Creditor:

Assets Care Reconstruction Enterprise (ACRE), Secured Cred¬
itor, had recovered from sale of core assets (Urea and MI facili¬
ties), non-core assets (all assets other than Urea and MI assets)
amounting to Rs.1685 Crores and Rs. 200 crores respectively
totalling to Rs. 1885 crores and cutback due till June 30, 2024,
towards full and final settlement of debt outstanding of Rs.
3858 Crores claimed by ACRE as of 10th December 2023.

Consequently, ACRE has issued a No Due Certificate dated
11th July 2024, confirming that NFCL stands unconditional¬
ly and irrevocably released and discharged of any liabilities,
dues, demands or claims in respect of the outstanding debt,
other amounts due and payable to ACRE, including release
of all security created in favour of ACRE, personal guarantees
and pledge of shares of NFCL held by promoter (Amlika Mer¬
cantile Private Limited). NFCL, as on 11th July, 2024, does not
have any term loans and working capital debt outstanding with
the Banks.

Subsidiaries, Joint Ventures or Associate Companies

During the year under review the company has only one sub¬
sidiary viz., Jaiprakash Engineering and Steel Company Limit¬
ed (JESCO) (a company incorporated under Companies Act,
1956 bearing CIN U00337KA1993PLC014694 having its Regis¬
tered Office at 510, 3RD A Cross, 2nd Main,3rdBlock Rajmahal
Vilas-II, Dollars Colony, Bangalore-560094, Karnataka.

Jaiprakash Engineering and Steel Company Limited (JESCO),
erstwhile subsidiary of the Company, went into Voluntary Liqui¬
dation under IBC with effect from April 25, 2022.

Subsequently, the liquidator, basis the considered opinion
that JESCO will not be able to pay its debts in full from the
proceeds of assets to be sold in the liquidation and as per
Regulation 40(2) of the Insolvency and Bankruptcy Board of
India (Voluntary Liquidation) Regulations 2016, filed, before the
Hon'ble NCLT, Bengaluru, withdrawal memo for the withdrawal
of the company petition CP (IB) 164/59lBB,/2023, to suspend
the process of liquidation. The Hon'ble NCLT, Bengaluru, was
please to pass an Order dated April 16, 2024, through which,
the company has exited the liquidation process effective from
April 16, 2024.

Consequent to assignment of debt by the Consortium Lenders
to Assets Care and Reconstruction Enterprise Limited (ACRE),
Secured Creditor, the shares of JESCO held by the Company
were sold as part of Non-core Assets on 12th June 2024, there¬
by JESCO ceases to be a subsidiary of the Company effective
from June 12, 2024.

The company has an Associate Company viz., K V K Raju In¬
ternational Leadership Limited (a company incorporated under
Companies Act, 1956 bearing CIN U51100TG1995PLC022410
and having its registered office at Nagarjuna Hills, Punjagutta
Hyderabad - 500082, Telangana).

There are no changes in the status of subsidiaries or associ¬
ates' companies during the year under review. Further, there
are no material fact that requires mention on the performance
and financial position of the Associate Companies.

Accounts of Associate Company:

Consolidated financial statements incorporating the accounts
of the associate company K V K Raju International Leadership
Limited is enclosed along with the financial statements of the
Company.

Statement containing salient features of the financial statement
of Associate Company appears as Annexure I to this Report.

Except mentioned above regarding JESCO there are no mate¬
rial fact that requires mention on the performance and financial
position of the Associate Company.

The Financial Statements of the Associate Company are avail¬
able for inspection by the Members at the Registered Office of
the Company pursuant to the provisions of Section 136 of the
Companies Act 2013. The Company shall provide free of cost,
a copy of the financial statements of its associate company
to the Members upon request. The statements of the associ¬
ate company are also available on the website of the Com¬
pany at http://www.nfcl.in/index.php/investors-desk/subsidiar-
ies-and-associates.

A.DIRECTORS, BOARD COMMITTEES, KEY MANAGERIAL

PERSONNEL AND REMUNERATION

Directors

Completion of 2nd term of office of Mrs. Lalitha Raghuram,
Independent Director:

Mrs. Lalitha Raghuram, had step down as an Independent Di¬
rector on the Board upon the completion of consecutive 2nd
term of five years effective from April 18, 2025.

Completion of 1st term of office of Mr. Rajendra Mohan
Gonela, Independent Director:

Mr. Rajendra Mohan Gonela, Independent Director, had com¬
pleted his 1st term of five years as Independent Director on
May 27, 2025.

Re-appointment of Mr. Rajendra Mohan Gonela as an Inde¬
pendent Director.

In accordance with Section 149, 152 and Schedule IV read with
relevant Rules of the Companies Act, 2013, and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015,
Mr. Rajendra Mohan Gonela, has been re-appointed as an In¬
dependent Director for a 2nd term of five (5) years with effect
from May 28, 2025, not liable to retire by rotation, by the Board
of Directors of the Company subject to the approval of the
members of the Company.

Mr. Rajendra Mohan Gonela, will attain the age of 75 years on
December 06, 2025, during the term of Independent Director¬
ship of the Company.

In terms of Regulation 17(1A) SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the appointment
/ continuation of the appointment of Mr. Rajendra Mohan Gon¬
ela, after the attainment of 75 years is subject to the approval
of the Members by way of Special Resolution

Accordingly, the Board of Directors considering the experience
and expertise and so as to utilize his services for the Company,
have proposed to continue Mr. Rajendra Mohan Gonela (DIN:
02354356), as an Independent Director of the Company, after
attaining the age of 75 years till the completion of the term of
Independent Directorship till May 27, 2030, in compliance with
Regulation 17(1A) SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

The proposed appointment is being placed before the mem¬
bers at the 19th AGM for their approval.

During the year under review there is no change in the Compo¬
sition of Board of Directors except mentioned above

Key Managerial Personnel
Resignation of Chief Financial Officer

Mr. A. Sudhakara Rao Annam, has resigned from the office of
Chief Financial Officer of the Company with effect from January
04, 2025.

Appointment of Chief Financial Officer

The Board of Directors at their meeting held on January 04,
2025, had appointed Mr. Srirama Raju Kapalli, as the Chief Fi¬
nancial Officer of the Company with effect from January 04,
2025.

Resignation of Company Secretary

Mr. Vijaya Bhasker M, has resigned from the office of Com¬
pany Secretary and Compliance Officer of the Company with
effect from February 03, 2025.

Appointment of Company Secretary

Mr. Sreekanth Chanda, has been appointed as the Company
Secretary and Compliance Officer of the Company with effect
from February 03, 2025.

Resignation of Chief Financial Officer

Mr. Srirama Raju Kapalli, has resigned from the office of the
“Chief Financial Officer” of the Company with effect from April
17, 2025

Executive Director

Mr. K. Rahul Raju, is the Managing Director of the Company for
a period of 3 years effective from August 01,2023.

Key Managerial Personnel

The following are the Key Managerial Personnel of the Compa¬
ny as defined under Sections 2(51), 203 of the Companies Act,
2013 read with The Companies (Appointment and Remunera¬
tion of Managerial Personnel) Rules, 2014, for the year ended
March 31,2025:

a) Mr. K. Rahul Raju, Managing Director

b) Mr. Sreekanth Chanda, Company Secretary

Retiring by Rotation

In terms of the provisions of Section 152 of the Companies
Act, 2013 and Articles of Association of the company, Mr. Uday
Shankar Jha and Mr. Chandrapal Singh Yadav, retire at the
forthcoming Annual General Meeting and being eligible, offer
themselves for reappointment.

Mr. Uday Shankar Jha, has attained the age of 75 years on
June 16, 2025.

In terms of Regulation 17(1A) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the appointment
/ continuation of the appointment of Mr. Uday Shankar Jha,
after the attainment of 75 years is subject to the approval of the
Members by way of Special Resolution.

The Board of Directors considering the vast experience and ex¬
pertise and so as to utilize the services for the Company, have
proposed the appointment of Mr. Uday Shankar Jha and Mr.
Chandrapal Singh Yadav as the Non-Executive Directors of the
Company and continue the appointment of Mr. Uday Shankar
Jha as a Non-Executive Director, after attaining the age of 75
years, in compliance with Regulation 17(1A) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors recommend the reappointment of Mr.
Uday Shankar Jha and his continuation after attaining the age
of 75 years and Mr. Chandrapal Singh Yadav, as directors lia¬
ble to retire by rotation, for the consideration of the Members
of the Company.

Declaration by Independent Directors

The Independent Directors have submitted their declaration
to the Board that they meet the criteria of Independence as
provided in Section 149(6) of the Companies Act, 2013 and
Regulation 25 of Listing Regulations so as to qualify as an In¬
dependent Director of the Company.

Meetings of the Board

The Board of Directors of the Company had met eight times
during the year on May 20, 2024, August 31,2024, September
07, 2024 (Adjourned meeting), September 16, 2024, Novem¬
ber 12, 2024, January 04, 2025, February 03, 2025 and Feb¬
ruary 14, 2025.

Remuneration and other particulars of the Directors/ Key
Managerial Personnel/ Employees

The information relating to remuneration and other particulars

of the Directors / Key Managerial Personnel / Employees as
required under Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Re¬
muneration of Managerial Personnel) Rules, 2014 appears as
Annexure - II(a) to this report.

Personnel

In terms of the provisions of Section 197(12) of the Companies
Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Ap¬
pointment and Remuneration of Managerial Personnel) Rules,
2014, a statement showing the names and other particulars of the
employees drawing remuneration in excess of the limits set out in
the said Rules appears as Annexure - II (b) to this report.

Familiarization Program and Performance Evaluation

Details of the Familiarization Program and Performance Eval¬
uation are incorporated in the Corporate Governance Report.

COMMITTEES
Audit Committee

The Audit Committee of the Board of Directors is in compli¬
ance with the provisions of Section 177 of the Companies Act,
2013 and Regulation 18 of Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Reg¬
ulations, 2015. The terms of reference are in compliance with
the applicable provisions of the Law.

The Chairman of the Committee is Mr. Rajendra Mohan Gon-
ela, an Independent Director as on March 31, 2025, and the
Committee consists of three Independent Directors, and one
Non-Executive Director. The Board has accepted all the rec¬
ommendations made by the Audit Committee.

The Committee meets periodically to review the internal audit
report, quarterly financial results and annual audited financial
statements among others and recommends its findings to the
Board apart from taking action independently whenever re¬
quired. The Statutory Auditors, Company Secretary, Internal
Auditor and Cost Auditors attend and participate in the Audit
Committee Meetings.

The Audit Committee comprises of

Nomination and Remuneration Committee

The Nomination and Remuneration Committee was consti¬
tuted with effect from April 22, 2014, in compliance with the
provisions of the Companies Act, 2013 and Regulation 19 of
Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015.

The Company has adopted a Nomination and Remuneration
Policy with effect from October 1, 2014, for determining, inter-
alia, qualifications, positive attributes and independence of a
director, matters relating to the remuneration, appointment,
removal and evaluation of performance of the Directors,
Key Managerial Personnel, Senior Management and other
employees.

The Nomination and Remuneration Committee comprises of:

Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted with
effect from April 22, 2014, in compliance with the provisions of
the Companies Act, 2013and Regulation 20 of Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The Committee reviews and
ensures Redressal of investors' grievances.

The Stakeholders Relationship Committee comprises of:

Corporate Social Responsibility (CSR) Committee

The CSR Committee comprises of three members, of which
one is an Independent Director. The Chairman of the Commit¬
tee is an Independent Director.

The Corporate Social Responsibility Committee comprises of:

Risk Management Committee

The Risk Management Committee was constitutedin compli¬
ance with the provisions of Regulation 21 of Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

The committee comprises of three members, including one
Independent Director. The Chairman of the Committee is an
Executive Director.

B. DISCLOSURES

Company Policy Matters

Your Company's endeavor has always been to maintain trans¬
parency and accountability to its stakeholders. In this direc¬
tion, various policies mentioned in the Corporate Governance
Report have been implemented to enable the stakeholders to
appreciate the various interventions the Company has taken.

The implementation of these policies are reviewed periodically
by the Board of Directors and updated regularly.

The Company has set up a Grievance Redressal Mechanism
for all its associates. The Grievance Redressal Mechanism is
aimed to redress the grievances of associates expeditiously
to ensure good working atmosphere and culture in the orga¬
nization.

The Company has in place Policy on Bio-diversity, Gift Policy,
Health Safety and Environment Policy and Human Rights Policy.

Risk Management Policy

The Company had constituted Risk Management Committee-
which frames, implements and monitors Risk Management
Plan of the Company and lays down procedures to inform the
Board of the risk assessment and risk minimization procedures
in the Company much before it was introduced as statutory
compliance.

The Risk Management Committee is in compliance with the
provisions of Regulation 21 of Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

The Company has an Enterprise Risk Management System set
up as required by the Listing Regulations.

As per the Enterprise Risk Management System, the risks of the
Company are being regularly identified/assessed and document¬
ed by way of individual profiles and risk registers. The Company
is also maintaining web-based risk management application by
each department/division at Plant as well as Corporate Office to
manage and control the risk in structured manner.

The Risk Management Organization Structure consists of Risk
Management Steering Committee (RMSC) at apex level, and
at divisional level, Corporate Risk Management Committee
(CRMC) and Plant Risk Management Committee (PRMC) were
formed to facilitate monitoring and governance of the ERM pro¬
cess on an ongoing basis.

Periodical meetings of the CRMC and PRMC are being held
wherein the critical, cautionary and acceptable risks are pre¬
sented by the departments through web-based RMS applica¬
tion. During such presentations, various cross-functional delib¬
erations take place on the contributing factors and the control
measures to mitigate the risks. The outcome of CRMC and
PRMC deliberations and the analysis of risks are presented to
RMSC on a quarterly basis.

Policy on Board Evaluation

The Policy on Board Evaluation was adopted with effect from
October 01, 2014, by the Board of Directors in compliance of
Companies Act, 2013 and Listing Regulations.

The purpose of the policy is to assess the effectiveness of the
Board as a whole, Committees of Board and Individual Direc¬
tors on regular basis and to take necessary steps for improving
the effectiveness of the Board.

The Nomination and Remuneration Committee has devised the
methodology, identified sample tools for evaluation and also
laid down the parameters for evaluation of Board of Directors,
its Committees, Chairman, Managing Director and Individual
Directors for the year ended March 31,2025.

The Nomination and Remuneration Committee at their meeting
held on May 30, 2025 , had approved the criteria for evaluation
of the Board and its Committees and Individual Directors for
the Financial Year 2024-25.

The Board of Directors, based on the responses received from
all the Directors, evaluated the performance of the Board of
Directors, its Committees, Chairman, Managing Director and
the individual Directors at their Meeting held on September 08,
2025.

Further, Independent Directors at their meeting held on Sep¬
tember 08, 2025, have reviewed the performance of Non-Inde¬
pendent Directors, Chairman and the Board as a whole.

In view of the evaluation not linked to payment of remuneration,
as the Company has opted only for payment of sitting fees, the
evaluation has no financial implications on the Company.

Whistle Blower Policy/Vigil Mechanism

The Company formulated the Whistle Blower Policy/Vigil Mech-
anismin compliance with Regulation 22 of Listing Regulations
and Section 177(9) of the Companies Act, 2013.

The Policy aims to prohibit managerial personnel from tak¬
ing adverse personnel action against employees disclosing
in good faith, alleged wrongful conduct on matters of public
concern involving violation of any law, mismanagement, and
misappropriation of public funds among others.

Employees / associates aware of any alleged wrongful conduct
are encouraged to make a disclosure to the Audit Committee.
The Audit Committee periodically reviews the existence and
functioning of the mechanism. No personnel of the Company
have been denied access to the Audit Committee. The above
mechanism has been appropriately communicated within the
Company across all levels and has been displayed on the
Company's website. The Web link for the same is http://www.
nfcl.in/images/pdfs/Whistle_Blower_Policy.pdf

Corporate Social Responsibility (CSR)

The Company has in place a CSR Policy in line with Sched¬
ule VII of the Companies Act, 2013. The Company has always
desired to play a proactive role in societal development with
an intention to bring positive change in the lives of many. The
CSR Policy may be accessed on the Company's website at the
link: http://www.nfcl.in/images/pdfs/Policy_on_Corporate_So-
cial_Responsibility.pdf

An initiative started in 2009 with the spirit of making a differ¬
ence, haddeepened its roots and bigger impact and changing
many more lives. The dedicated support, strength, initiative
and encouragement from the associates to be part of this ini¬
tiative gave impetus to the movement.

The Company supports CSR activities through Nagarjuna
Foundation and Nagarjuna Education Trust which runs a
school under the name of Akshara School and supports Agri¬
cultural research and formal training through Nagarjuna Agri¬
cultural Research and Development Institute.

During the year under review, the Company was not required
to spend on CSR as the company had been incurring losses
for the past few years. The Annual Report on CSR Activities
carried out by the Company appears as Annexure- III to this
Report.

The salient features of the policy on CSR appears as Annex¬
ure - 111(a)

Corporate Governance

Your Company driven by a desire to be more competitive and
recognized globally, had inculcated more than a decade ago
rules defining ethical business, much before it was introduced
as statutory compliance.

Your Company firmly believes that building a culture of com¬
pliance is more than meeting regulations and standards. Your
Company has always proactively met mandated standards
and practiced Corporate Governance in spirit and not just as
letter of the law.

The goal of the Company in the area of Corporate Governance
is to ensure fairness for every stakeholder; the company be¬
lieves best practice Corporate Governance is critical to en¬
hance and retain investor trust and to perform with integrity.

The Annual Report contains a separate section on the Compa¬
ny's corporate governance practices, together with a certificate
from M/s. KBG Associates, Practicing Company Secretaries on
compliance with conditions of Corporate Governance as stipu¬
lated under Listing Regulations.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis
in terms of the provisions of Regulation 34 of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is provided as a separate
section in the Annual Report.

Related Party Transaction

All related party transactions done by the Company during
the financial year were at arm's length and in ordinary course
of business. During the financial year, your Company has not
entered into any material transaction as per the Listing Regu¬
lations with any of its related parties which may have potential
conflict with the interest of the Company at large.

Disclosures pursuant to Accounting Standards on related par¬
ty transactions have been made in the notes to the Financial
Statements (refer Note 33). All related party transactions are
placed before the Audit Committee and the Board for review
and approval, as appropriate. To identify and monitor signifi¬
cant related party transactions, the Company has also framed
a Policy on the Related Party Transactions and the same is
available on the Company's website. Web link for the same
is http://www.nfcl.in/images/pdfs/Policy_on_Related_Party_
Transactions.pdf

All the related party transactions entered during the year were
in Ordinary Course of the Business an don Arm's Length basis.

Particulars of Contracts or Arrangements with Related parties
appears as Annexure-IV to this report.

Particulars of loans, guarantees or investments

There are no loans, guarantees and investments under Section
186 of the Act as at the end of the Financial Year 2024-25.

Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo

Disclosure in terms of Section 134(3)(m) read with Rule 8(3) of
The Companies (Accounts) Rules, 2014, in respect of conser¬
vation of energy, technology absorption, earnings and outgo
of foreign exchange is attached as Annexure-V to this Report.

Annual Return

The Annual Return of the Company for the year ended March
31, 2025, is placed on the website of the Company. The
web link for the same is http://www.nfcl.in/index.php/inves-
tors-desk/annual-returns

Compliance with Secretarial Standards

The Board of Directors affirms that the Company has com¬
plied with the applicable Secretarial Standards issued by the
Institute of Companies Secretaries of India SS-1 - Meetings of
Board of Directors and SS-2 - General Meetings.

Significant and material orders passed by the Regulators
or Courts or Tribunals impacting the going concern status
and Company’s operations in future

There were no significant awards that have been passed by
any Court or Judicial Authority against the company during the
Financial Year 2024-25.

Adequacy of Internal Financial Controls with reference to
Financial Statements

The Company maintains all its records in SAP system and the
workflow and approvals are routed through SAP.

The Company's Internal Auditors scrutinize on periodical basis
and ensure that the internal controls and the work flow of the
organization are being done through the approved policies of
the Company. In every quarter, the Internal Auditors present
the Internal Audit Report and Management comments on the
Internal Audit observations to the Audit Committee.

The Board of Directors of the Company have adopted various
policies like the Related Party Transaction, Whistle Blower Pol¬
icy etc., for ensuring the orderly and efficient conduct of its
business for safeguarding its assets, prevention and detection
of frauds and errors, accuracy and completeness of account¬
ing records and timely preparation of reliable financial infor¬
mation.

Details in respect of frauds reported by Auditors other than
those which are reportable to the Central Government

The Statutory Auditors, Cost Auditors or Secretarial Auditors of
the Company have not reported any frauds to the Audit Com¬
mittee or to the Board of Directors under Section 143(12) of the
Companies Act, 2013, including rules made thereunder.

Registrar and Share Transfer Agents

The Company has been functioning as Category - II, Share
Transfer Agent (in-house) pursuant to the approval of the Se¬
curities and Exchange Board of India.

Deposits

The Company has not accepted any deposits falling under the
ambit of Chapter V of the Companies Act, 2013 and the Rules
framed there under, during the year nor are there any unpaid
/unclaimed deposits at the end of the year. Accordingly, no
disclosure or reporting is required in respect of details relating
to deposits.

Maintenance of Cost records and accounts

The Company in terms of provisions of Section 148 (1) of the
Companies Act, 2013, is required to maintain cost records. Ac¬
cordingly, the Company had maintained Cost Accounts and
Records for the year ended March 31,2025.

C. AUDITORS AND AUDIT REPORT

Statutory Auditors

The Members of the Company at the 16thAnnual General Meet¬
ing held on November 29, 2022, appointed M/s. P Murali &
Co., Chartered Accountants (Firm Registration No. 007257S),
Hyderabad, Statutory Auditors of the Company for term of five
years to hold office from the conclusion of 16th Annual General
Meeting till the conclusion of the 21st Annual General Meeting.

Auditor’s Report

M/s. P Murali & Co., Chartered Accountants, Statutory Audi¬
tors', have submitted the Statutory Auditors Report for the year
ended March 31,2025, and have invited attention on emphasis
of matters in relation to:

Emphasis of Matters:

a) Refer Note No. 29: Consequent to the settlement of Debt
vide receipt of sale proceeds from Core and Non-Core as¬
sets by ACRE, there are no other assets including property
plant and equipment left with the Company for operations.
“No Dues and Security release Certificate” from ACRE was
received on 11th July 2024, thereby affecting the Going
Concern of the Company and accordingly drawn the Fi¬
nancial statements for the year ended on March 31,2025.

Without considering the energy and other claims from the
Government, the current liabilities exceed the current as¬
sets by Rs. 86,095.55 Lakhs.

b) Refer Note No. 32: There are claims against the company,
which are not acknowledged as debts and are disputed
in various forums, courts, appeals, including arbitration
awards amounting to Rs 81,596.07 lakhs.

GAIL has recovered interest in the past and also raising
claims for interest on the amounts due which is being dis¬
puted by the company. The company is not accounting for
further interest from 1st July 2024 onwards

c) Refer Note No. 32.4: Given the financial situation, NFCL
has assigned its rights in favor of AMPL to represent it in all
legal forums/proceedings to pursue claims from GAIL in¬
cluding Arbitration claim in its name as an assignee along
with agency coupled with interest under the provisions of
Indian Contract Act, 1872. Should GAIL satisfy the award
in the future, NFCL shall use the award as it deems fit after
clearing its liabilities

d) Refer Note No. 30: De-escalation of Urea subsidy and
De-escalation of Gas Costs used as Raw material and gen¬
eration of Power for FY 2022-23.

During the 3rd quarter, the final Gas Pool price for the year
2022-23 has been notified by the DOF (Annual cumulative
Gas Pool price has come down) in line with which GAIL
has issued Credit note and NFCL has recognized reduc¬
tion in Gas Costs by Rs. 17,555.01 Lakhs and correspond¬
ingly NFCL has reduced its Urea Subsidy claim by Rs.
16,879.16 Lakhs for FY 2022-23. Accordingly, the reduc¬
tion in cost of raw material / power and fuel and conse¬
quent de-escalation of the subsidy revenues, respective¬
ly, belonging to FY 2022-23 have been accounted in line
with the said notification and continued accounting policy.
Further adjustments required, if any, will be considered on
notification of final prices. As there is no production from

4th June 2024 there is no revenue from Operations to be
recognised for the second quarter

e) Refer Note No. 30: The Government from time to time ex¬
tended the present energy norms which were valid till 31st
March 2023. Accordingly, Subsidy income is recognized
based on Target Energy Norms as per NUP-2015 policy
for the Quarter ended June 2024 and there is no produc¬
tion from June 2024 as the Plants were sold.

f) Refer Note No. 32.5: Claim from a related party assert¬
ing its right for Royalty for the period from 29.01.1998 to
31.12.2021. The company agreed without impairment and
prejudice to the rights of AMPL to settle the claims in a
manner such that the dues are secured and paid on a
priority basis from the receipts if any from claims against
GAIL if and when GAIL satisfies the award in relation to
pipeline accident.

Management Explanation to emphasis on the matter

a) Emphasis of Matter given in Note (a) of the Auditor's Re¬
port on standalone financial statements read with Note No.

29 of Notes forming part of the standalone financial state¬
ments for the year ended March 31,2025, are self-explan¬
atory and do not call for any further comments.

b) Emphasis of Matter given in Note (b) of the Auditor's Re¬
port on standalone financial statements read with Note
32 of Notes forming part of the standalone financial state¬
ments for the year ended March 31,2025, are self-explan¬
atory and do not call for any further comments.

c) Emphasis of Matter given in Note (c) of the Auditor's Report
on standalone financial statements read with Note 32.4 of
Notes forming part of the standalone financial statements
for the year ended March 31, 2025, are self-explanatory
and do not call for any further comments.

d) Emphasis of Matter given in Note (d) of the Auditor's Re¬
port on standalone financial statements read with Note

30 of Notes forming part of the standalone financial state¬
ments for the year ended March 31,2025, are self-explan¬
atory and do not call for any further comments.

e) Emphasis of Matter given in Note (e) of the Auditor's Re¬
port on standalone financial statements read with Note
30 of Notes forming part of the standalone financial state¬
ments for the year ended March 31,2025, are self-explan¬
atory and do not call for any further comments.

f) Emphasis of Matter given in Note (f) of the Auditor's Report
on standalone financial statements read with Note 32.5 of
Notes forming part of the standalone financial statements
for the year ended March 31, 2025, are self-explanatory
and do not call for any further comments.

Cost Auditor’s & Cost Audit Report

Cost Auditor

In terms of Section 148 of the Companies Act, 2013 and the
Rules made thereunder the Company is required to undertake
Audit of the cost accounts maintained by the Company by a
Cost Auditor.

The Board of Directors, on the recommendation of the Audit
Committee, at their meeting held on May 20, 2024, appointed
M/s. D V & Associates as Cost Auditor, at a remuneration of
Rs.4 Lakh plus taxes as applicable and reimbursement of out-

of-pocket expenses for conducting the audit of cost records of
the company for the Financial Year 2024-25.

Cost Audit Report

M/s. D V & Associates, Cost Auditors have issued Cost Audit
Report for Financial Year 2024-25, which does not contain any
qualification, reservation or adverse remarks.

Secretarial Auditor & Secretarial Audit Report

Secretarial Auditor

The Board of Directors at their meeting held on May 30,
2025,pursuant to the provisions of Section 204 of the Com¬
panies Act, 2013, have appointed Mr. C S S Krishna, Partner,
M/s.KBG Associates, Company Secretaries, Hyderabad as the
Secretarial Auditor of the Company to undertake Secretarial
Audit for the Financial Year 2025-26.

Secretarial Audit Report

M/s.KBG Associates, Secretarial Auditor, have issued the Sec¬
retarial Audit Report for the Financial Year 2024-25, which does
not contain any qualification, reservation, or adverse remark.
The Secretarial Audit Report appears as Annexure - VI to this
Report.

Internal Audit

The Company has well established system of Internal Audit
which carries out audit on Risk based Internal Audit framework
covering the gamut of financial, marketing, plant operations
and service functions.

The Company's Internal Audit function has obtained Quality
Management System ISO 9001, certificate since December
2006 and the same was upgraded to ISO 9001:2015.

A Chief Internal Auditor of the Company has been appointed
by the Board of Directors, in compliance with the Companies
Act, 2013 and Listing Regulations.

Remuneration Policy

The salient features of the policy on director's appointment
and remuneration, including criteria for determining qualifica¬
tions, positive attributes, independence of a director and other
matters provided under Section 178(3) of the Companies Act,
2013, adopted by the Board, appears as Annexure VII to this
report. We affirm that the remuneration paid to the directors is
as per the terms laid out in the nomination and remuneration
policy of the Company. The Nomination and Remuneration
Policy may be accessed on the Company's website at the link:
http://www.nfcl.in/images/pdfs/Nomination%20and%20Remu-
neration%20Policy%20-%20nfcl.pdf

Disclosure under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013

Your Company has in place Policy on Sexual Harassment at
workplace in line with the requirements of The Sexual Harass¬
ment of Women at the Workplace (Prevention, Prohibition and
Redressal) Act, 2013. An Internal Complaints Committee (ICC)
has been set up to address complaints received regarding sex¬
ual harassment. All employees (permanent, contractual, tem¬
porary, trainees) are covered under this Policy.

The Company has not received any complaints pertaining to
sexual harassment during the FY ended March 31,2025.

D. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and 134(5) of the Companies

Act, 2013 your Directors hereby report that:

(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with prop¬
er explanation relating to material departures.

(b) The Directors had selected such accounting policies and
applied them consistently and made judgments and esti¬
mates that are reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company at the
end of the financial year and of the profit and loss of the
Company for that period;

(c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accor¬
dance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting
fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a go¬
ing concern basis;

(e) The Directorshad laid down internal financial controls to be
followed by theCompany and that such internal financial
controls are adequate and were operating effectively.

(f) The Directors had devised proper systems to ensure com¬
pliance with the provisions of all applicable laws andthat
such systems were adequate and operating effectively.

INDUSTRIAL RELATIONS

During the year, the industrial relations at all the works of the

company were cordial

ACKNOWLEDGEMENT

Your directors place on record their gratitude to the Govern¬
ment of India, Government of Andhra Pradesh, Government of
Telangana and the Financial Institutions and Company's Bank¬
ers for their assistance and cooperation.

Further, the Company places on record its sincere apprecia¬
tion for the continuing support and unstinting efforts of inves¬
tors, dealers and associates and all stakeholders.

CAUTIONARY STATEMENT

The Board's Report may contain certain statements that the
Company believes are or may be considered to be “forward
looking statements” within the meaning of applicable securities
law and regulations. All these forward-looking statements are
subject to certain risks and uncertainties, including but not lim¬
ited to Government action, economic developments, risks in¬
herent to the Company's growth strategy and other factors that
could cause the actual results to differ materially from those
contemplated by the relevant forward-looking statements and
the company is not obliged to update any such forwarding
looking statements.

By Order of the Board
Uday Shankar Jha

Hyderabad Chairman

September 08, 2025 DIN: 00056510