Andhra Petrochemicals Ltd Directors Report

Dear Members,

Your Directors are pleased to present the Forty Second Annual Report on the operational and business performance of the Company together with the Audited Financial Statements for the Financial Year ended 31st March, 2026.

CORPORATE OVERVIEW:

Your Company is the manufacturer of Oxo-Alcohols that consist of the Products viz., 2 Ethyl Hexanol, Normal Butanol and Iso Butanol. Your Company is an Associate of The Andhra Sugars Ltd., and has its Regd. Office at Venkatarayapuram, Tanuku.

FINANCIAL RESULTS:

The summary of the financial results, which have been prepared as per the Indian Accounting Standards (Ind AS), for the Year under review along with the Previous Years figures are given below:

(Rs. in lakhs)

	2025-26	2024-25
Net Sales (excl. GST)	45580.28	50188.75
Profit / (Loss) before Interest & Depreciation	509.04	482.36
Less: Interest	894.19	904.19
Depreciation and Amortization Expense	1472.99	1457.73
Profit / (Loss) after Interest and Depreciation before Extra-Ordinary Items	(1858.14)	(1879.56)
Exceptional Items	308.27	332.18
Profit / (Loss) Before Tax	(2166.41)	(2211.74)
Provision for:
Current Tax
Adjustment of Tax Expense for earlier years		(7.85)
Deferred Tax	(603.66)	(390.83)
Profit / (Loss) After Tax	(1562.75)	(1813.06)
Other Comprehensive Income	24.16	17.23
Total Comprehensive Income for the period	(1538.59)	(1795.83)
Balance brought forward from previous year	40640.91	44136.17
Profit carried forward to next year	39102.39	40640.91

OPERATIONAL AND FINANCIAL PERFORMANCE:

During this financial year 2025-26, Plant produced 47,844 MTs (Previous year 51,489 MTs) of Oxo-Alcohols. Sales during the Year were 50,354 MTs (Previous year 49,032 MTs). Company posted Net Loss of Rs.15.63 Crores for the Financial Year 2025-26 as compared to Net Loss of Rs.18.13 Crores relating to the previous year.

The Company performance for this year is better than previous year. However overall performance is depends upon marketing conditions, cheaper imports and lower oxo alcohols prices in Asia due to additional capacity built up in China.

DIVIDEND:

Due to loss incurred during the year under report, your Directors are unable to recommend any dividend for the Financial Year 2025-26.

Pursuant to the provisions of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated its Dividend Distribution Policy which is available on the website of the Company at the link www.theandhrapetrochemicals.com.

CONTRIBUTION TO EXCHEQUER:

Over the years, your Company has been significant contributor to the Government Exchequer in the form of Duties and Taxes, during the Year under review Rs.3.46 crores was paid to the Exchequer as against Rs. 7.95 crores in the Previous Year.

CAPITAL & RESERVES:

Authorised and Paid-up Capital:

The Authorised Capital of the Company is Rs.125.00 crores and the Paid-up Capital is Rs.84.97 crores.

Reserves:

The total Reserves position as on 31.3.2026 stood at Rs.420.38 crores as against Rs.435.77 crores for the Previous Year.

General Reserve:

During the Year under review, no amount has been transferred to the General Reserve.

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Due to the on-going Russia -Ukraine war, Israel - Hamas war in addition to the recently started war between Iran & Israel (US-backed) & additional Tariffs imposed by U.S.A., has effected the International Trade, resulted in slowdown of Global Economy.

This year, due to the additional petrochemical products capacities built up in China, prices of most of the Petrochemicals declined in Asia & put a lot of margin pressure especially in India.

Due to the decline in product prices, your Companys profitability declined & posted Net Loss of Rs.15.63 Crores for the Financial year 2025-26 under review, compared to the last year Net Loss of Rs.18.13 Crores.

OPPORTUNITIES AND THREATS:

Estimated demand of Oxo-Alcohols at 4,00,000 MTPA, with healthy growth rate of 8% to 10% per annum, in general, is a good opportunity for the Company with existing capacity of 80,000 MTPA, considering the demand-supply gap in the country even after BPCL & IOCL Plants coming on line. As such, there are no constraints in the Companys production capability with Hindustan Petroleum Corporation Limited (HPCL) able to meet full Propylene requirement. Sales realization is also expected to improve on account of Anti-Dumping Duties imposed by Govt. of India on imports from certain countries & forecasted reasonably better Indian GDP growth.

However, BPCL & IOCL Oxo Alcohols competitive prices & dumping of the products and currency fluctuations may impact the Companys performance to some extent.

Ongoing Russia-Ukraine War, Israel - Hamas War, recently started Iran-Israel War, coupled with geopolitical tensions may effect on the business environment is going to be a big challenge to the Company.

PRODUCT WISE PERFORMANCE:

During this Financial Year 2025-26, Plant produced 2 Ethyl Hexanol - 34,584 MTs (Previous year 36,490 MTs), N-Butanol - 12,174 MTs (Previous year 13,796 MTs) & I-Butanol - 1,086 MTs (Previous year 1,203 MTs). This year Plant produced 47,844 MTs of Oxo-Alcohols (2 Ethyl Hexanol, N-Butanol & I-Butanol) as against 51,489 MTs Oxo-Alcohols produced last year.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As required by the provisions of the Companies Act, 2013 Internal Control Systems Report has been appended to the Independent Auditors Report given by Statutory Auditors for the Financial Year 2025-26. The Company has internal control systems commensurate with the size of the business operations. A Chartered Accountants firm is engaged to carry out internal audit covering the entire operations. The audit firm submits internal audit reports periodically with their suggestions and/or corrections. Audit Committee critically deliberates and reviews such internal audit reports and ensures effectiveness of the control systems through necessary recommendations.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

In the area of Human Resources, the employees are being trained to meet the Plant requirements from time to time by motivating them in a positive way and the Industrial Relations continued to be cordial throughout the Year.

The total number of employees employed as on 31.3.2026 is 275.

The health & well-being of our employees became a top priority for the company.

FUTURE OUTLOOK:

Your Company Performance is expected to be reasonably good in view of the forecast of better GDP growth for India. However, the disrupted business environment due to Russia -Ukraine War, Israel -Hamas War, US trade war & geopolitical tensions may impact the performance to some extent.

Though company signed Natural Gas (NG) term sheet agreement with GAIL, in the year 2019, the progress in the GAIL/APGDCL Natural gas pipe laying work got held up & finally the project has been cancelled. New tenders have been called for laying Natural gas pipeline from Kakinada to Visakhapatnam / Srikakulam.

The Companys performance to a large extent is dependent on international supply and demand for the Companys products and their prices which are influenced by crude prices, exchange fluctuations and dumping by sources other than that covered by Anti-Dumping Duty.

RISKS AND CONCERNS:

Your Company is depending on its major raw material i.e., Propylene from a single source, HPCL refinery. However, the risk is built in the project evaluation. Diluted the Risk slightly by the development of two alternative sources i.e., BPCL & GAIL for supplying Propylene in case of emergency need. However sourcing Propylene BPCL & GAIL is not economical due to high logistic costs.

Crude prices, Exchange rate fluctuations are also a matter of concern.

CAUTIONARY STATEMENT:

The statements describing the Companys outlook, objectives, projections, expectations, estimations or predictions may be forward-looking statements based on certain assumptions of future events. Actual results may differ materially from those expressed or implied, since the Companys operations are influenced by external or internal factors. Your Company closely monitors all major developments likely to affect the Operations and will respond to meet the potential threats and to gain from any possible opportunities.

DEPOSITS:

During the Year under review, your Company did not accept any deposits within the meaning of provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

SAFETY, HEALTH AND ENVIRONMENT:

Your Company has in place Safety, Health and Environment Policy.

Company has completed 21.29 million accident free Man-hours in the last 17 years.

Total 6844 man-hours used for conducting Safety talks, Safety induction training and refresher trainings for employees including Contract / Contractor workmen and truck drivers.

Safety of Human and Plant assets are of top priority of the Company. Continuous training of personnel at various levels on safety and strict compliance of regulations is ensured which resulted in another accident-free year.

A) Company received National Safety Award - 2025 - PRASHANSA PATRA -4th Level in recognition of outstanding performance during the period 2022, 2023 & 2024.

B) Company received Excellence in Safety - 2025 award from Federation of Indian Chambers of Commerce & Industry (FICCI) in January, 2026 at the National Level.

Health:

Health monitoring of all employees including contract labour & canteen workers is done on a regular basis.

Environment:

Online emission, ambient air & effluent monitoring are in place. Data is being transmitted online to Central Pollution Control Board (CPCB) and Andhra Pradesh Pollution Control Board (APPCB) for monitoring.

Insurance:

All the insurable assets of the Company including Plant and Machinery, Buildings and Inventories are insured on reinstatement value basis.

Land taken on Lease from Visakhapatnam Port Trust

Your Company has taken on lease 75.00 Acres of land from Visakhapatnam Port Trust (VPT) on which the Oxo-Alcohol Plant has been established. The land is located adjacent to HPCL, Visakha Refinery which supplies major Raw Materials. In this connection, a Lease Agreement was entered into on 27.6.1989 with VPT for a period of 30 years which expired on 26.6.2019. During the Financial Year 2019-20, the Company (APL) has initiated the process of renewal of the Land Lease on which the Plant is located with VPT for a further period of 30 years with effect from 27.6.2019. Company has submitted its Technical & Financial Bid against the Tender floated by VPT. As Company was the sole bidder for the Tender, VPT accepted both Technical Bid & Financial Bid. Later on, VPT has cancelled the tender and issued re-tender. Aggrieved by the action of VPT, Company has filed a Writ Petition under Article 226 before the Honble High Court of Andhra Pradesh.

The Honble High Court of Andhra Pradesh has allowed the Writ Petition filed by the Company seeking the cancellation of the VPTs order dated 18.8.2020, cancelling the Tender Notification dated 7.8.2019 and fresh Tender Notification dated 24.8.2020 issued by VPT towards the Lease of the Land and directed VPT to execute the Lease Deed, vide its Order dated 25.2.2022. Further, on 19.3.2022, Company has written a letter to the Chief Engineer, VPT requesting him to kindly finalise the Land Lease Deed and fix-up the date for execution of the said Lease Deed. Visakhapatnam Port Trust has filed an Appeal (WA No. 688 of 2022) on 7.9.2022 before the Honble High Court of Andhra Pradesh. The Honble High Court has delivered its Judgement on 3.11.2025. Based on the Judgement, the Company has addressed a letter to the VPA with a request to float the tender.

Pending execution of Lease Deed, Company has considered provisionally its bid amount for accounting of "Leases" in accordance with Ind AS 116, till the Lease Deed is executed. However, the Company is making lease rental payments by way of depositing the cheques in Visakhapatnam Port Authorities Bank Account (i.e., State Bank of India) as per Companys Tender.

FPPCA Charges relating to the Financial Years 2022-23 & 2023-24

The Honble Andhra Pradesh Electricity Regulatory Commission (APERC), Kurnool has issued orders for levying Fuel & Power Purchase Cost Adjustment charges (FPPCA) for the Financial Years 2022-2023 and 2023-2024. The estimated liabilities towards the aforesaid FPPCA charges amounting to Rs 308.27 lakhs & Rs 332.18 lakhs respectively and collecting the same monthly installments along with the regular power consumption charges. Aggrieved by the Orders, your Company has filed Petitions before the Appellate Tribunal for Electricity (APTEL), New Delhi.

Pending disposal of above petitions, the Board of Directors have decided to make a provision for Rs.332.18 lakhs for the F.Y. 2024-25 and the Board of Directors have decided to make a provision for the balance amount of Rs.308.27 lakhs relating to the year 2022-23.

LISTING:

The Equity Shares of your Company are listed on the BSE Limited, Mumbai. The Annual Listing Fees for the year 2025-26 has been paid.

ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) and 134(3)(a) of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, copy of the Annual Return of the Company as at 31st March, 2024 is available on the Companys website www.theandhrapetrochemicals.com.

Details of Designated Officer under Section 89 of the Companies Act, 2013 read with Rule 9 of the Companies (Management and Administration) Rules, 2014: Sri G. Adinarayana, CFO & Company Secretary.

DIRECTORS:

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Director Sri M S R V K Ranga Rao (DIN 00031720) retire by rotation at the ensuing 42nd AGM, and being eligible has offered himself for reappointment as Director. His reappointment is being placed for the approval of the Shareholders at the ensuing 42nd AGM.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Director Sri Ravi Pendyala (DIN 03375555) retire by rotation at the ensuing 42nd AGM, and being eligible has offered himself for reappointment as Director. His reappointment is being placed for the approval of the Shareholders at the ensuing 42nd AGM.

None of the Directors is disqualified for appointment / re-appointment under Section 164 of the Companies Act, 2013. Certificate issued by the Practising Company Secretary regarding non-disqualification of Directors is enclosed (Annexure - A). As required by law, this position is also reflected in the Auditors Report. Details with regard to the composition of the Board, Meetings of the Board held during the Year and the attendance of the Directors have been mentioned in the Corporate Governance Report which forms part of this Report.

KEY MANAGERIAL PERSONNEL:

Details of Key Managerial Personnel (KMP) of the Company are as under:

Sl. Name of the person No.	Designation
1. Sri K Narasappa	President
2. Sri G Adinarayana	Chief Financial Officer & Company Secretary

CODE OF CONDUCT:

The Board of Directors enunciated a Code of conduct for the Directors and Senior Management Personnel which was circulated to all concerned and was also hosted on the Companys website www.theandhrapetrochemicals.com. The Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct for the Financial Year 2025-26.

AUDIT COMMITTEE:

Audit Committee was re-constituted with effect from 20.9.2025 comprising Non-Executive Independent Directors viz., Sri P Venkateswara Rao, Dr. Pamidi Kotaiah, Sri G S V Prasad and Sri Ravi Pendyala, Non-Executive Non-Independent Director, as its Members. Sri P Venkateswara Rao is the Chairman of the Committee. The details of the number of meetings of the Audit Committee held during the Financial Year 2025-26 are given in the Corporate Governance Report which forms part of this Report.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder, the Board of Directors have appointed M/s Nekkanti S R V V S Narayana & Co., Company Secretaries (CP No.7839), Hyderabad, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the Financial Year 2025-26 is included as Annexure - B and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualification or reservations or adverse remarks.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Board has carried out annual evaluation of its own performance, working of its Committees and the individual Directors during the Year 2025-26.

The performance was evaluated based on the parameters such as structure, meetings, functions, risk evaluation process adopted, stakeholder value and responsibility, corporate culture, ethics, effectiveness of Board / Committee process and functioning, contribution of Board / Committee Members to overall effectiveness of the Board / Committee, avoiding conflict with the Companys interests, bonafide discharge of responsibilities in the interest of the Company and upholding ethical standards, integrity etc.

In terms of Regulation 25 of the SEBI Listing Regulations, 2015, Board took on record the declarations and confirmations received from Independent Directors.

Independent Directors met on 24.5.2025 & 1.11.2025 for annual evaluation of their own performance and the performance of the Non-Independent Directors, the Chairman, the Committees, the Board as a whole and the adequacy of flow of information to the Board and its Committees.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The details of Familiarization Programme for the Independent Directors are furnished in the Corporate Governance Report which forms part of this Report.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2025-26 are given in the Corporate Governance Report which forms part of this Report.

CREDIT RATING:

ICRA Ltd., has revised the Companys long-term Unallocated Limits of 57.18 crores - ICRA BBB+ (Negative) downgraded from [ICRA]A- Negative and Long term Fund based-Working Capital Facilities - Rs.35.00 crores - [ICRA]BBB+(Negative) Downgraded from [ICRA]A- (Negative); Short term - Non-fund based - Working Capital Facilities Rs.2.00 crores - [ICRA]A2+; Reaffirmed, assigned earlier to the Rs.94.18 crores Line of Credit of our Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY:

During the Year under review, your Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013 and details of the Investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the Notes to the Financial Statements.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

As per the provisions of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Vigil Mechanism / Whistle Blower Policy for Directors and employees to report genuine concerns on unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct in prescribed manner.

The Policy provides adequate safeguards against victimisation of the complainant and direct access to the Chairman of the Audit Committee. The protected disclosures, if any, reported under this Policy will be appropriately and expeditiously investigated.

The Whistle Blower Policy may be accessed on the Companys website at the link: http:// www.theandhrapetrochemicals.com/wp-content/uploads/Whistle-Blower-Policy-1.pdf

RISK MANAGEMENT:

The Risk Management framework of the Company defines the Risk Management approach of the Company, includes periodic review of such risks, Risk Mitigation measures and reporting mechanism of such Risks. Risk Management Policy of your Company can be viewed by entering the URL http:// www.theandhrapetrochemicals.com/wp-content/uploads/POLICY-ON-CORPORATE-RISK-MANAGEMENT.pdf in the web browser.

Risk Management Committee was re-constituted with effect from 20.9.2025 comprising Sri P Narendranath Chowdary, Managing Director, as Chairman of the Committee, Sri M S R V K Ranga Rao and Sri Ravi Pendyala, Non-Executive and Non-Independent Directors, and Sri P Venkateswara Rao, Independent Director, as its Members.

The details of the number of meetings of the Risk Management Committee held during the Financial Year 2025-26 are given in the Corporate Governance Report which forms part of this Report.

Sustainability:

Sustainability is at the core of your Companys business development strategy. Your Company firmly believes in the idea that progress should not come at the expense of the environment and natural ecosystems. The Company focuses on key sustainability areas such as Decarbonization & Air Emission Control, Water & Biodiversity Conservation, Health & Safety and Community Development to ensure the long-term sustainability of its business operations and improve the well-being of communities, preserving the environment and ensuring long-term economic prosperity.

Your Company recognizes its role in promoting Environmental, Social and Governance (ESG) practices through its operating devices. Your Company is reviewing its sustainability plan from time to time. Your Company committed to reduce green house gas emissions. The Company has adopted several key standards to demonstrate dedication to ESG Principles. The Company has also adopted energy management techniques such as energy audits and usage of renewable energy to reduce the risk & GHG emissions. Your Company has certification of ISO 9001:2014 & ISO 45001:2018 and Bureau of Indian Standard Certification for all its products.

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE:

Details of composition of CSR Committee are given in the Corporate Governance Report which forms part of this Report.

As per the provisions of Section 135 and Schedule VII of the Companies Act, 2013 and the Companys CSR Policy, Company had spent an amount of Rs. 55,39,487/- towards CSR expenditure for the Financial Year 2025-26. The Report on CSR activities as required under the Companies (CSR Policy) Rules, 2014 is set out as Annexure - "C" to this Report.

NOMINATION & REMUNERATION COMMITTEE:

Nomination & Remuneration Committee was re-constituted with effect from 20.9.2025 comprising Sri G S V Prasad, Independent Director, as Chairman, Sri M S R V K Ranga Rao, Non-Executive & Non-Independent Director and Sri M Gopalakrishna, I.A.S., (Retd), Independent Director, as its Members.

NOMINATION & REMUNERATION POLICY:

The Board of Directors of your Company has, on recommendation of the Nomination & Remuneration Committee, adopted a Nomination & Remuneration Policy which lays down the framework in relation to the criteria for selection and appointment of Board Members and remuneration of Directors / Key Managerial Personnel and Senior Management of the Company. This Policy can be accessed on the Companys website at the link: http://www.theandhrapetrochemicals.com/wp-content/uploads/NOMINATION -REMUNERATION-POLICY.pdf

AUDITORS:

M/s C V Ramana Rao & Co., Chartered Accountants, Visakhapatnam, were appointed as Statutory Auditors of the Company for a second term of five consecutive Financial Years from 2022-23 to 2026-27 by the Shareholders at the 38th Annual General Meeting (AGM). Fixation of their remuneration for the Year 2026-27 is being placed at the ensuing 42nd AGM for the approval of Members. The total fees paid by the Company for the Year 2025-26 to the Statutory Auditors for all services rendered by them is Rs. 9.70 lakhs.

COST RECORDS:

Company has complied with the requirement with regard to maintenance of Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.

COST AUDITORS:

M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad, were appointed by the Board, on the recommendation of the Audit Committee, as Cost Auditors of the Company for conducting the audit of cost records for the Financial Year 2026-27 on a remuneration of Rs.2.00 lakhs and appropriate Resolution in this connection has been included in the Notice calling the ensuing 42nd Annual General Meeting of the Company for the purpose of your ratification of the said remuneration. Cost Auditors Report for the Financial Year ended 31st March, 2025 has been filed with the Ministry of Corporate Affairs on 5.6.2025 i.e., within the stipulated time.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given below:

I) CONSERVATION OF ENERGY

1. Steps taken or impact on conservation of energy: NIL

2. Steps taken by the Company for utilising Alternate Sources of Energy: NIL

3. Capital investment on Energy Conservation Equipments: NIL

II) TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

a) Efforts made & Benefits derived:

Technology has been fully absorbed and various innovative ideas enabled the Company to operate the Plant even above 105% load.

b) Imported Technology: NIL

c) Expenditure incurred on Research & Development: NIL

III) Foreign Exchange Earnings and Outgo: (On cash basis)

(Rs. in lakhs)

	For the year ended 31.3.2026	For the year ended 31.3.2025
i. Earnings
ii. Outgo	385.14	475.52

PARTICULARS OF EMPLOYEES:

The particulars of employees of your Company drawing a remuneration requiring disclosure under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are as follows:

Sl. No. Name & Designation of Employee	Nature of employment/ Category	Qualifications & Experience	Date of Commencement of employment	Age	Last employed	% of equity	Whether related to any Director	Salary
1 Sri K Narasappa	President	B. Tech (Chemical), M.B.A. 44 Years	1.3.2017	71	M/s ICS- Senegal, West Africa	0.001	No	1,04,25,414.00

None of the employees holds (by himself or along with his spouse and dependent children) more than 2% of the Equity Shares of the Company.

DEMATERIALISATION OF SHARES:

As on 31st March, 2026, out of the total number of 8,49,71,600 Equity Shares of the Company, 8,18,04,428 Equity Shares constituting 96.27% stand dematerialised.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 23 of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Policy on Materiality of Related Party Transactions and on dealing with the Related Party Transactions and do not attract the provisions of Section 188 of the Companies Act, 2013.

The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company. The weblink of the same is http://www.theandhrapetrochemicals.com/wp-content/uploads/ POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf

There were no materially significant Related Party Transactions entered by the Company with the Promoters, Directors and Key Managerial Personnel which may have a potential conflict with the interests of Company at large.

All other Related Party Transactions are placed before the Audit Committee and the Board for approval. Omnibus approval is granted by the Audit Committee on yearly basis for the said transactions. A statement giving details of all Related Party Transactions is placed before the Audit Committee and the Board for review and ratification on a quarterly basis. All transactions entered with the Related Parties during the Year under review were in the ordinary course of business and on Arms Length basis.

Since there were no materially significant Related Party Transactions during the Year under review, the requirement with regard to the details required in AOC-2 is not applicable to the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. In compliance with the provisions of the said Act, an Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment. During the Year 2025-26, there were no complaints received by the ICC.

PARTICULARS OF REMUNERATION:

The information required under Section 197 of the Act and the Rules made thereunder in respect of employees of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the Financial Year:

Our Directors draw remuneration only by way of Sitting Fees. The details of the same are provided in Corporate Governance Report which forms an Annexure to this Report. No other remuneration is drawn by them. Managing Director does not draw any remuneration. Hence, the ratio of remuneration of each Director to the median remuneration is not required to be given.

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the Financial Year:

Company was paying Sitting Fees of Rs. 30,000/- for attending each Meeting of the Board and Rs. 25,000/-for attending each Meeting of Committee of the Board (as approved by the Board of Directors at its Meeting held on 5.11.2020). Other details are as follows:

Name of the Person	% increase in remuneration
Sri K Narasappa, President	NIL
Sri G Adinarayana
Chief Financial Officer & Company Secretary	NIL

(c) the percentage increase in the median remuneration of employees in the Financial Year: 3.02%

(d) the number of permanent employees on the rolls of Company: 275

(e) average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

The average increase in salaries of employees other than managerial personnel in 2025-26 was 3.02%. Percentage increase in the managerial remuneration for the Year was Nil.

(f) affirmation that the remuneration is as per the Remuneration Policy of the Company:

The Companys Remuneration Policy is driven by the success and performance of the individual employees and the Company through its compensation package, the Company endeavours to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT OCCURRED AFTER 31ST MARCH, 2026:

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year 2025-26 to which the Financial Statements relate and on the date of this Report.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS, COST AUDITORS AND PRACTISING COMPANY SECRETARY IN THEIR REPORTS:

For the Year under review, there are no qualifications, reservations or adverse remarks made either by the Statutory Auditors, Cost Auditors or Practising Company Secretary in their respective Reports. The Report of the Statutory Auditors forms part of the Financial Statements.

Further, no frauds are reported by Statutory Auditors under Section 143(12) of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT:

To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

i) that in the preparation of the Annual Accounts for the year ended 31st March, 2026, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

ii) that Accounting Policies have been selected and applied consistently and that Judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2026 and of the Loss of the Company for the year ended on that date;

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis;

v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

COMPLIANCE WITH SECRETARIAL STANDARDS:

Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.

REPORT ON CORPORATE GOVERNANCE:

As required under Regulation 34(3) of Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Report on Corporate Governance and the Auditors Certificate on the compliance of Corporate Governance are annexed (Annexure-"D") and form part of the Directors Report.

ACKNOWLEDGEMENTS:

Your Directors acknowledge the co-operation and continued valuable support received from Central and State Government authorities, the Promoters - The Andhra Sugars Limited and Andhra Pradesh Industrial Development Corporation Ltd., (APIDC), Banks, Shareholders, Customers, Hindustan Petroleum Corporation Ltd., (HPCL) and other Suppliers. Your Directors place on record their deep sense of appreciation of the valuable contribution made by the employees at all levels.

Place: Venkatarayapuram	On behalf of the Board
Date: 27.5.2026
	Dr. Pamidi Kotaiah
	Chairman