DIRECTORS' REPORT

On behalf of the Board of Directors of your Company, I have the pleasure in presenting the 52^nd Annual Report on
the business and operations of the Company together with the Audited Financial Statements including
Consolidated Audited Financial Statements of the Company for the Financial Year 2025-26 and the Auditors’
Reports and Comments of Comptroller & Auditor General of I ndia (C&AG).

During the year, company achieved the Profit Before Tax of f 232.67 crore as against Profit Before Tax of f104.08
crore during CPLY. PBT has increased mainly due to increase in profit from traded goods, higher receipt of past
period subsidy arrears in current year and decrease in marketing and other Miscellaneous Expenses.

The Energy consumption per MT of Urea at NFL plants during 2025-26 was as follows:

Your Company’s key financial parameters during the year 2025-26 and important financial highlights are as
under:-

RESERVES M
Capital Reserves^! |l"

The balance as at 31.03.2026 amounted to f2.51 crore, which is at the same level as was in the previous year.

i^r^enesF¹"

The balance as at 31.03.2026 amounted to f331.84 crore, which is at the same level as was in the previous year.

l^SUrp!US^|i-

The balance retained in the surplus as at 31.03.2026 is f2022.23 crore as compared to f1939.04 crore during the
previous year.

ijDVrw

The Board of Directors has recommended Final Dividend of f 1.04 (10.40%) per equity share of Rs. 10 each on
the paid up equity share capital of the company for the Financial Year 2025-26 which shall be paid after approval of
the shareholders at the Annual General Meeting.

During the FY 2025-26, Company has achieved sale of fertilizers to the tune of 65.20 LMT comprising of 36.46
LMT of own Urea, 9.24 LmT of imported Urea and 8.75 LMT of RFCL Urea and 10.75 LMT of Non- Urea Fertilizers
and against corresponding period last year 63.37 LMT that comprised of 37.32 LMT of own Urea, 4.18 LMT of
imported Urea and 11.99 LMT of RFCL Urea, 9.88 LMT of Non-Urea Fertilizers. Sales contribution from other than
own manufactured Urea of the company increased to around 40% during the year as compared to 33% of the
CPLY.

Your Company has achieved the production & sale of certified seeds to the tune of 1.51 Lakh Quintals. The sale of
Bio-Fertilizers & City Compost of 691 MT & 23,857 MT respectively achieved during the year.

Your Company has achieved the production of Urea of 36.41 LMT, sale of all fertilizers of 65.20 LMT. Your
company has achieved production & sale of Bentonite Sulphur to the tune of 20,035 MT & 20,121 MT respectively.
Your company has also sold 60,942 MT PDM (Potash Derived from Molasses) during the year.

During the year, your company achieved ever best sale of:

a. Urea 54.45 LMT (Including Own Urea RFCL Urea Imported Urea) against previous best of 53.71 LMT
during 2022-23.

b. Agro-Chemicals of value of f172.31 crore against previous best of f 92.95 crore during 2024-25.

c. Potash Derived from Molasses (PDM) of 60,942 MT against previous best of44,632 MT during 2024-25.

d. Seaweed Granule of 16,095 MT against previous best of 7,341 MT during 2024-25

e. Fermented Organic Manure (FOM) of 5,095 MT against previous best of 3,345 MT during 2024-25.

Other major achievements during the year:

• The Company is setting up of Agro Chemicals Plant at Bathinda Unit and out of total five streams, production
has been achieved from three streams. Remaining two streams are expected to be completed shortly. The
Production of 300 MT/KL agrochemicals has been achieved in Bathinda Unit during the year.

• Bio-fertilizer unit capacity at NFL Vijaipur doubled from 700 MTPA to 1400 MTPA during 2025-26. Bio-Fertilizer
Plant achieved ever best Annual Bio-Fertilizer Production 727.03 MT in FY-2025-26 surpassing the previous
best of 704.20 MT in FY-2021-22.

• The Company has set up 5000 MTPA Urea Gold i.e. Sulphur coated urea (SCU) plant at Nangal Unit under
R&D.

• Renewable energy: Vijaipur Unit is having a 300 KW roof top solar power plant. Till February’26, 319365 kwh
power generated from solar power plant.

• Implementation of ERP (Enterprise Resource Planning) system at NFL to integrate various business functions
completed.

• NFL along with Government of Assam (GoA), OIL, HURL and BVFCL has formed a Joint Venture Company
(JVC) named Assam Valley Fertilizer and Chemical Company Limited (AVFCCL) on 25.07.2025 for setting up
of a new brownfield Ammonia-Urea complex of Namrup-IV fertilizer plant at Namrup, Assam. Annual Urea
production capacity of the plant shall be 12.7 LMT.

^Material changes and commitments^.-

No material changes and commitments have occurred between the date of the Balance Sheet and the date of the
Board's Report affecting the financial position of the Company.

Company has not revised Financial Statements or Board's Report in respect of any of the three preceding
financial years.

NFL was incorporated on 23^rd August, 1974 at New Delhi. It has an authorized share capital of f1000 crore and
paid up and subscribed share capital of ?490.58 crore out of which Government of India’s share is 74.71% and
25.29% share is held by financial institutions, public & others.

The Company has five gas based Urea plants viz. Nangal & Bathinda plants in Punjab, Panipat plant in Haryana
and two plants at Vijaipur in Madhya Pradesh with a total annual revamped capacity of 35.68 LMT (Annual Re¬
assessed capacity - 32.31 LMT) of Urea. The company also has a Bio- Fertilizers Plant at Vijaipur with annual
capacity of 1400 MT(capacity doubled from 700 MT during 2025-26) and a Bentonite Sulphur plant of 25000 MT
per annum at Panipat Unit. It also manufactures other allied Industrial products like Nitric Acid, Ammonium Nitrate,
Sodium Nitrate & Nitrite from its Nangal Unit and undertakes import & sale of other fertilizers like DAP, MoP, NPKs
along with domestic trading of various agro-inputs like certified seeds, agrochemicals, City Compost, SSP, Potash
Derived from Molasses (PDM), Fermented Organic Manure (FOM), Seaweed Granule etc. through its existing
vast dealer’s network under single window concept. The Company has also been producing and selling its own
certified Seeds under company’s flagship Seed Multiplication Program (SMP).

The Company has three Seed Processing Units (SPUs) at Bathinda, Panipat and Indore. Overview of the industry
and important changes thereof during the last financial year forms part of Management Discussion & Analysis
Report.

^^^Ss^^r^g^mm^mimmimmmm

In the light of present diversified business activities vis-a-vis IND AS 108 on Segment Reporting following
operating segments have been considered for Segment Reporting for the Annual Accounts for the FY 2025-26:

i) Manufactured Fertilizers (Urea, Bentonite Sulphur, Bio Fertilizers).

ii) Manufactured Chemicals (Industrial Products, Agro Chemicals, etc).

iii) Traded Imported Fertilizers (under NBS).

iv) Others (Domestic Traded Products, Agro-Inputs, Sale of Services, etc).

The operation of the company is conducted within India and there is no separate reportable geographic segments.

Details of external environment and economic outlook are given in Management Discussion & Analysis Report.

Induction ofstrategic and finance partners during the lastfinancial year;M|,.

No new strategic and financial partners have been inducted during the last financial year.

Capital Structure

Preferences Equity ”sB||-

Company has not issued any equity shares or preference shares during the year.

^Equity Shares with Differential Rights^.-

During the financial year, Company has not issued any equity shares with differential rights as to dividend, voting
or otherwise.

€==S»

During the financial year, Company has not issued any employees stock option.

^^Sha^t° Trustees for benefit o^f ^ptoye^Jll"

Company has not introduced any scheme(s) for purchase/subscription of the Company's shares to be held by
trustees for the benefit of employees.

^rsZZWZhcarries right ofconversion

During the financial year, Company has not issued any securities, which carries a right or option to convert such
securities into equity shares.

The Company has not accepted any deposits during the year.

j^t^aii-

During FY 2025-26, the credit rating of the Company was maintained with two credit rating agencies as under:

During the year, the Credit Rating of the Company had been reviewed by both the agencies as shown above in the
table.

Company has not introduced Buy-Back of its securities during the year.

Iswea. EquityBll-

Company has not issued any Sweat equity shares in terms of Rule 8 of the Companies (Share Capital and
Debentures) Rules, 2014.

There was no disinvestment of Government of India Shareholding during the Financial Year 2025-26. However,
Department of Investment and Public Asset Management (DIPAM), Ministry of Finance, Government of India had
appointed few years back Legal Advisors, Merchant Bankers and Selling Brokers for the disinvestment of 20%
paid up equity capital in National Fertilizers Limited (NFL) out of Government of India's Shareholding through the
"Offer for sale by promoters through the Stock Exchanges".

^Statement of deviation(s) or variation(s)^J||"

Company has not offered public issue, rights issue, preferential issue etc. during the year and there is no
requirement to submit statement of deviation(s) or variation(s).

foreign Exchange Earnings/Outgo J||.

The Foreign Exchange earned in terms of actual inflows during the year were f 1.25 crores and the Foreign
Exchange outgo during the year in terms of actual outflow amounted to f5817.46 crore.

Long term net borrowings as on 31.03.2026 were Nil (previous year Nil).

^ShoSToanslIl.

Short Term borrowings of f3959.25 crore (previous year f1995.77 crore) were outstanding as on 31.03.2026.

^DebtEquityRatiog||.

Debt equity ratio as on 31.03.2026 has increased to 1.39:1 as compared to 0.72:1 of previous year due to increase
in borrowings.

ARevenue^||.

The Company has achieved Revenue from Operations of ?21514.18 crore during 2025-26 as against ?19794.50
crore during previous year and total income of ?21567.86 crore during 2025-26 as against ?19889.52 crore during
previous year as detailed below:

^Ureaaⁿdothsrfertil_izer^sp||.

Your Company has registered Urea production of 36.41 LMT with an overall capacity utilization of 112.69 % during
2025-26 against 37.14 LMT achieved during 2024-25 (CPLY).

Company achieved Bentonite Sulphur production of 20035 MT against CPLY of 18051 MT having a growth of
around 11%.

On the sales front, the Company has sale of Fertilizers of 65.20 LMT that includes sale of 36.46 LMT of own Urea,
9.24 LMT of Imported Urea, 8.75 LMT of RFCL Urea, 10.75 LMT of Non-Urea Fertilizers including 0.24 LMT
(23857 MT) of Compost during 2025-26 as compared to 63.37 LMT during 2024-25 which includes sale of 37.32
LMT of own Urea, 4.18 LMT of Imported Urea, 11.99 LMT of RFCL Urea, 9.88 LMT of Non-Urea Fertilizers
including 0.26 LMT (26466 MT) of Compost.

The detailed quantity of break-up of sale of urea and other Fertilizers is as under:

The Company registered sale of Nitric Acid of 91372 MT during 2025-26 as compared to previous sale of 99745
MT during 2024-25. The Company also recorded sale of Ammonium Nitrate to the tune of 46868 MT during 2025¬
26 as compared to sale of 55502 Mt achieved during 2024-25.

In terms of revenue generation from production and sale of Industrial products, the Company achieved sale of
Industrial-Products (IP) comprising of Nitric Acid, Sodium Nitrate etc. to the tune of ?533.83 crore during 2025-26
against CPLY of ?588.64 crore during 2024-25.

The Company sold 690 MT of Bio-Fertilizers (Solid & Liquid) to the tune of ?2.60 crore in FY 2025-26 as against
554 MT of ?2.08 crore during CPLY.

^Import&saleofFertilizer^l,.

The Company sold 9.01 LMT of imported non-Urea Fertilizers including DAP, MoP, APS, NPK etc. worth
?6388.01 crore during 2025-26 against 8.51 LMT worth ?4524.95 crore during 2024-25.

Apart from the above, NFL also sold 9.24 LMT of Urea imported in Government Account in FY 2025-26 against
4.18 LMT during 2024-25.

^Domestic Trading ofAgro Products^,-

The Company has registered total revenue of ?245.23 crore towards trading of various agro products such as
seeds, pesticides & compost and RFCL ammonia during the year against ?145.30 crore during CPLY.

^rosssaiecompositionnT^^^BHH^^^^Hi

Owing to progressive shift in strategy of the Company, the composition of gross sale of the Company has
undergone visible change. Against the Urea (main product) contribution of 94.49% in the overall revenue of the
Company during 2015-16, Urea (manufactured) contribution has reduced to 59.66% while contribution of other
product has increased to 40.34% during 2025-26. Percentage of total sale composition of other products during
the year has increased to 40.34% as compared to 32.59% during 2024-25.

Agriculture is the main source of livelihood for the farmers, which include crops, animals and allied activities.
Agriculture Extension Activities are being undertaken by your Company by educating farmers on efficient use of all
agro-inputs along with total know-how on improved and scientific methods of cultivation.

Dealers/Retailers are important link between the Company and the farmers. They are key change agents in
motivating farmers to use fertilizers in a balanced manner. During the year 2025-26, 33 Dealer's/Retailer's
Orientation Programmes were conducted and more than 1300 dealers/retailers were facilitated by upgrading their
knowledge regarding fertilizers/agro products and improved crop practices so that latest information can be
disseminated at point of purchase to the farmers.

Your Company has always laid emphasis on upliftment of farming community by educating them on various
aspects of crop production, animal husbandry and other allied agriculture sectors. 283 Farmer training
programmes were organized during 2025-26 and more than 13935 farmers got benefited. Through these
educational programmes, farmers were sensitized to issues related with soil fertility status including deficiency of
various nutrients, their remedy to increase fertilizer use efficiency and maximize yields. The farmers have also
been educated on benefits of long term usage of Bio-fertilizers and City Compost through these programmes.

Agriculture Universities, Research Stations, KVKs are the knowledge centres for latest farming techniques, new
and high yielding crop varieties, innovative technologies in agriculture and allied agriculture sectors etc. During
the year with the objective to promote balanced and sustainable use of fertilizers, soil analysis, methodology of
application of different fertilizer, new technologies etc., an opportunity was given to the farmers to practically visit
the above places by organizing farmers visit to nearby Agriculture University/Research Station/ KVKs. More than
400 farmers got benefitted through 5 such programmes during the year 2025-26.

During the year 2025-26, total 30 demonstrations had been laid out at farmers' fields to demonstrate benefits of
use of City Compost, Potash derived from Molasses (PDM), Fermented Organic Manure (FOM), Nano Urea and
water soluble NPK fertilizer/Micronutrients on crop growth and yield as compared to farmer's own practices. 43
Field days were organized in the demonstration fields and more than 1,800 farmers got benefitted from such
programmes.

Your Company is playing a vital role in supporting farmers by undertaking soil analysis for macro and micro
nutrients through its 6 Static and 5 Mobile Soil Testing Labs (MSTLs) in various States. Based on the analysis,
farmers are advised on soil fertility management through rational use of manure, fertilizers and other inputs to
make agriculture more productive and sustainable. During the year, around 17,000 soil samples were collected &
analysed for macro and micro nutrients and recommendations were given to the farmers.

During the year 2025-26, your Company continued its endeavour to render soil testing services at all the farmers'
doorstep by organizing soil testing campaigns. During these campaigns, services of our Mobile Soil Testing Vans
and laboratory staff were suitably utilized for collecting soil samples by demonstrating the correct method of
sampling to the farmers and by offering on the spot soil analysis and advisory on the basis of soil test results. 11
such campaigns were organized during the year 2025-26 and more than 67,300 farmers benefitted.

Participation in agro exhibitions and university Kisan Melas is very effective way to communicate directly with the
farmers and also to interact with scientists and experts from various agricultural fields. During the year 2025-26,
your Company participated in 33 Krishi Melas/Agriculture Exhibitions organized by leading Agriculture
Universities, Agriculture Departments etc. in the States of Punjab, Haryana, UP, Uttarakhand, Bihar, MP,
Chhattisgarh, Rajasthan, AP and Telangana which was attended by more than 67,000 farmers.

As per guidelines of Department of Fertilizers (DoF) dated 24.08.2022 and with the objective to provide all the
agricultural inputs and services to the farmers under one roof along with soil testing and advisory services, more
than 18,000 Centre has been converted into PMKSKs so far by putting up a fascia, installation of Smart TV and
developing other facilities in the shops. Farmer education programmes are regularly being organized in these
PMKSKs.

^Projects ^|l-

The details of the projects including capital expenditure envisaged are given in the Management Discussion &
Analysis Report.

Management Discussion & Analysis Report covering business prospects including modernization, diversifi¬
cation, investments, marketing plans, raw materials, human resource, internal management controls including
financial performance review, government policies and other factors having impact on the performance of the
Company operations and future outlook of the Company is appended as Annexure-1 to this Report.

^Business Responsibility and Sustainability Report^,.

SEBI vide circular no. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated 10.05.2021 had introduced the “Business
responsibility and sustainability reporting by listed entities", which introduces new reporting requirements on
Environment, Social and Governance parameters [ESG parameters] called the Business Responsibility and
Sustainability Report (BRSR). The reporting as required under Regulation 34 of SEBI (LODR) Regulations, 2015
was amended for the listed entities and the same shall be mandatory for the top 1000 listed companies (by market
capitalization) with effect from the financial year 2022-2023.

Your Company in adherence to the circular had prepared the Business Responsibility and Sustainability Report
for the financial year ended March 31, 2026 and the same is appended as Annexure-2 to this Report.
Business Responsibility and Sustainability Policy is available on the website of the Company at
www.nationalfertilizers.com.

^s^^r^nshpMl,.

Details of stakeholders' relationship are given in the Business Responsibility and Sustainability Report annexed to
this Report.

Details of customers’ relationship are given in the Business Responsibility and Sustainability Report annexed to
this Report.

|i-

The Company is committed to maintain the highest standards of Corporate Governance being the fountain head
of value creation for all stakeholders especially shareholders. The Company has in place a well-defined
“Corporate Governance Mechanism" which considers the interest of all stakeholders.

Pursuant to SEBI (LODR) Regulations, 2015 (as amended from time to time) and DPE Guidelines on Corporate
Governance, a report on Corporate Governance is appended as Annexure-3 which forms part of this Report.

The Secretarial Auditor of the Company have examined and certified Company's compliance with respect to
conditions enumerated in SEBI (LODR) Regulations, 2015 and DPE guidelines on Corporate Governance.
Secretarial Auditor's Certificate on Corporate Governance and explanations of the Management to Secretarial
Auditors' observations during the year 2025-26 is appended as Annexure-4 which forms part of this Report.

The following Parliamentary Committee during study visits interacted with the Company in the year 2025-26:

1. Study Visit of the Committee on Chemical and Fertilizers (2024-25) at Agartala, Guwahati and Shillong from
26^th to 29^th April, 2025.

2. Study Visit of the Department Related Parliamentary Standing Committee on Industry (DRPSC) at Diu and
Ahmedabad from 12^th to 13^th September, 2025.

3. Study Visit of the Committee on Petitions, Rajya Sabha to Amritsar (Punjab) and Srinagar (J&K) from 6^th to 9^th
October, 2025.

4. Study Visit of the Standing Committee of Finance to Lucknow and Hyderabad from 13^th to 15^th November, 2025.

5. Study Visit of the Standing Committee on Chemicals and Fertilizers (2025-26) to Thiruvananthapuram,
Mumbai and Goa from 22^nd to 28^th January, 2026.

6. Study Visit of the Committee on Government Assurances (2025-26) to Sri Vijaya Puram (Port Blair), Swaraj
Dweep (Havelock Island), Bengaluru and Bhubaneswar from 20^th to 25^th February, 2026.

Following regulatory orders issued for implementation may affect/ have affected the operations of the plants:

^OBSEBBEBBSESBIH !>Ý

The Department of Fertilizers (DoF) has granted stage-wise extensions in the NUP-2015 norms to ensure the
smooth attainment of Target Energy Norms (TEN) at each fertilizer unit across the industry. Initially, the target
norms were extended and revised for the fiscal years 2018 and 2019, with penalties of 2% and 5% respectively.
Following representations from units; the TEN were further revised up to September, 2022 and March, 2023, with
penalties of 10% and 10% 2% respectively.

Energy-saving schemes at Bathinda, Panipat and Nangal units were implemented by Jan 2022, while for Vijaipur-
I & II, schemes were completed by March, 2023. Despite the enforcement of target norms for all units by the
Department of Fertilizers (DoF), the Vijaipur I unit could not achieve the TEN of 5.5 Gcal/MT urea as envisaged in
the TEFR prepared by PDIL, and its energy is expected to remain higher than the norm without significant
investment.

Upon representations made to DoF and further escalation of the matter to the Department of Expenditure (DoE)
by DoF, DoE revised the TEN for Vijaipur I initially until 31.03.2024 with a 30% penalty. This was subsequently
extended upto December 2024 with a penalty of 35% and further extended with the same penalty upto March,
2025.

For further New Energy Norms applicable from 01.04.2025, an expert Committee under the chairmanship of
NITI Aayog was constituted by the Government of India to review and recommend revised Target Energy Norms
(TEN) for urea units under NUP-2015, applicable from 01.04.2025. The Committee has submitted its report. DoF
vide its notification dated 30.06.2026 has revised the New Energy Norms applicable w.e.f. 01.04.2025 to
31.03.2028.

DoF vide notification dated 28^th March, 2025 revised the per kg NBS rates of P and S for Kharif 2025 vis-a-vis Rabi
2024-25 as tabulated above. Accordingly, NBS rates per MT of DAP & SSP increased from f 21,911 and f 5,121
per MT during Rabi 2024-25 to f 27,799 and f 7,263 per MT, respectively for Kharif 2025. NBS rates for NP/NPKs
grades of fertilizers ranged between f 8,952 per MT and f 27,404 per MT for Kharif2025.

Subsequently, as per OM dated 29^th October, 2025, DoF revised the per kg NBS rates of P and S for Rabi 2025-26
vis-a-vis Kharif 2025 as tabulated above. Accordingly, NBS rates per MT of DAP and SSP increased from f 27,799
and f 7,263 during Kharif 2025 to f 29,805 and f 7,408 (capped), respectively for Rabi 2025-26. NBS rates for
NP/NPKs grades of fertilizers ranged between f 9,088 per mT and f 29,671 per MT for Rabi 2025-26.

^3.0 DoF mandate for Ammonium Su.phate procurement Kharif 2026^,-

DoF vide their email dated 10.04.2026 informed that the import target for Ammonium Sulphate for the Kharif 2026
season (01.04.2026 to 30.09.2026) in respect of NFL has been fixed at 1.50 LMT.

n:^^ ^dueto - ‘•"ÝI'-

DoF vide their letters No. 23011/5/2025-P&K dated 30.04.2025 & 23011/12/2025-P&K (P) dated 05.01.2026
conveyed the operational guidelines for implementation of various provisions over and above the NBS Subsidy
rates approved for Kharif 2025 & Rabi 2025-26, respectively, (as summarised below) to ensure the availability of
DAP & TSP to the farmers at affordable rate @1350 per 50 kg bag & f1300 per 50 kg bag respectively. These
provisions for imported DAP & TSP shall be effective for the shipments arriving w.e.f. 01.04.2025 till 31.03.2026:

i. Advantage/ disadvantage due to upward/downward trend in the international market.

ii. Provision for “Other Costs" @ 3500 PMT or actual applicable expenses, whichever is lower.

iii. Provision for reimbursement of GST component included in the MRP.

iv. Provision for reasonable return @4% of Net MRP (MRP-GST).

DoF vide their letter dated 18.03.2026 advised NFL to procure sufficient quantity of DAP under NFL’s existing
Long-term agreement to maintain adequate availability at the field level considering the anticipated peak demand
for DAP and in-order to pre-position adequate stocks well before the commencement of Kharif season.

Vide NFL letter dated 26.02.2026, DoF was informed that NFL is in process of finalization of MOU with International
Producers for FY 2026-27 and considering the MRP & subsidy the procurement shall be unviable for Khraif 2026.
Accordingly, DoF was requested to extend the price protection for procurement of DAP/TSP in Kharif2026.

Plastic Waste Management Rules 2016^^[ [.Ý

The Ministry of Environment Forests and Climate Change (MoEF & CC), Government of India, vide Gazette
Notification dated 18^th March, 2016 has specified rules for Plastic Waste Management. The Rules fix the
responsibility of local bodies, Gram Panchayat and Waste generators, as well as producers, importers and brand
owners for collection and management of plastic waste. However, subsequent amendments have also came in
2018 and later on Plastic Waste Management Rules were amended as Plastic Waste management Rules, 2022.

Fertilizer industry falls under the category of brand owners as the fertilizer products are sold in plastic bags that are
multi-layered and composed of HDPE/HDPE lined with polypropylene. All the Brand Owners who introduce the
products in the market have to establish a system or plan for collecting back the plastic waste generated due to
their products. As per rules, NFL has to register with Central Pollution Control Board (CPCB) and submit along
with action plan to comply with Extended Producer Responsibility (EPR) obligation as mentioned in the rule.

Accordingly, NFL applied for the registration and got registration as a Brand Owner under PWM Rules on
21.06.2022 with 01 year validity. The same is being renewed every year.

For the FY 2025-26, renewal of registration has been done and target of 15,610 MT of collection and recycling
plastic waste of Cat-I & II (combined) given by CPCB. Parties have been lined up for the fulfilling the plastic waste
management rules compliances.

In line with the provisions of Right to Information Act, 2005, an appropriate mechanism promoting transparency
and accountability is functional across the Company. The Public Information Officers and Appellate Authorities are
effectively responding to the requests and appeals of the applicants. The names of all PIOs / First Appellate
Authorities / Transparency Officer are displayed on the Company’s website. During the year, 432 RTI applications
were received and were dealt with as per provisions under rTi Act, 2005.

lV_igil Mechanism^.-

Pursuant to the provisions of Sections 177(9) and (10) of the Companies Act, 2013, a Vigil Mechanism for
employees and others to report genuine concerns has been established.

Company believes in transparency and propriety in all its business dealings. To take this object further, Company
has put in place a Whistle Blower Policy providing for a mechanism to the employees and other stakeholders to
report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct or Ethics
Policy. The Policy provides for adequate safeguards against victimization of whistle blowers. The policy is
reviewed periodically. No employee or other stakeholders were denied access to the Audit Committee. Whistle
Blower Policy is available on the website of the Company at www.nationalfertilizers.com.

With the commitment to maintain the highest standard of transparency and governance, your Company has
entered into an integrity Pact with Transparency International and has also appointed Independent External
Monitors (IEMs), as nominated by Central Vigilance Commission (CVC). Structured Meetings are held with IEMs
on regular intervals and threshold value is f 1 crore for signing of Integrity Pact for purchase/works contracts.

The Vigilance Division of the Company is headed by the Chief Vigilance Officer (CVO), who is assisted by a team
of officers drawn from various functional departments. The vigilance set-up is operational across the Corporate

Office, all Manufacturing Units and Zonal Marketing Offices, ensuring comprehensive coverage of vigilance
functions throughout the organization.

The advancement of good governance remains a fundamental focus of vigilance functions. Emphasis continues
to be placed on building awareness and nurturing a culture of ethics and integrity across the organization. A well-
informed and sensitized workforce plays a vital role in reinforcing internal controls, promoting transparency and
contributing effectively towards the achievement of organizational goals.

In line with the guidelines of the Central Vigilance Commission (CVC), the Company undertook various vigilance
initiatives during the year 2025 to promote transparency, accountability and ethical conduct. Extensive activities
were organized during Vigilance Awareness Week (VAW) 2025, along with a three-month special campaign on
the theme “Vigilance - Our Shared Responsibility" across all Units, Zonal Offices and the Corporate Office.

Capacity-building programmes were conducted focusing on key vigilance areas such as:

• Investigation and reporting

• Framing of charge sheets

• Conducting CTE-type examinations

These programmes were complemented by training sessions on ethics, conduct rules, cyber hygiene, public
procurement and emerging areas such as cyber security. Special emphasis was laid on enhancing procurement
transparency through the Government e-Marketplace (GeM), improving systems and procedures and promoting
ethical practices across the organization.

A wide range of awareness activities were undertaken during the campaign including lectures, seminars, public
outreach programmes, competitions, rallies, marathons, walkathons, nukkad naataks, integrity pledge
ceremonies and dissemination through banners and pamphlets. More than 150 events were conducted,
significantly enhancing vigilance awareness among employees, stakeholders and the public at large. Overall,
these initiatives strengthened preventive vigilance by improving systems, enhancing awareness and reinforcing a
culture of integrity within the organization.

Regular vigilance activities carried out during the year includes Surprise checks, Scrutinies, Vigilance clearance
and status, the preparation of Periodic Vigilance Reports, preparation of the Agreed List of Officers, identification
of the List of Officers of Doubtful Integrity, investigation of complaints as received from various sources and follow
up of pending departmental actions.

With a focus on preventive vigilance and systemic improvements, the Vigilance Wing of NFL actively contributes
to minimizing risks and enhancing organizational efficiency. Its sustained efforts towards awareness, monitoring,
and process strengthening support the development of a robust and integrity-driven work environment.

lMoU ^||.

The Department of Public Enterprises, Government of India, in order to improve accountability and giving higher
autonomy to Public Sector Enterprises, introduced the Concept of MoU during early nineties. NFL signed its first
MoU with the Department of Fertilizers (DoF) for the year 1991-92.

Based on financial performance and achievement of other parameters laid down, your Company has been rated
“Good" as per the Memorandum of Understanding (MoU), signed with the Government of India for the financial
year 2024-25. From the year 2021-22 and onwards, DPE has started data entry module of digital MoU Dashboard
for CPSEs for entering data. Accordingly, MoU for the year 2025-26 was generated through online MoU portal
after entering requisite information. The Ministry and the CPSEs were requested to sign this system generated
MoU. Further Company shall submit actual achievement against all the parameters for 2025-26 in the online MoU
portal for evaluation.

During the FY 2025-26, NFL achieved a total production of 36.41 LMT of Neem Coated Urea, 20,035 MT
Bentonite Sulphur, 727 MT of Bio-fertilizers and 1,30,636 MT of Nitric Acid with refrence to the MoU targets.

^Awards & Accolades received during 2025-₂₆B||.

• Panipat Unit received “Safety Leadership of the year award" on 25^th April, 2025 for its outstanding contribution
in the process sector in 5^th International sustainability conference Health safety Fire & Environment advance
2025 organized by University of Petroleum and Energy Studies (UPES).

• Nangal Unit received Platinum Award Apex India Green Leaf award 2024 for Energy Efficiency category in
fertilizer sector.

• Nangal unit was awarded with the Official Language Shield for the first prize for its excellent performance in
official language for the year 2023-24.

• On 12.06.2025, the Mukutmani Shield was awarded to the NFL Nangal unit by the Indian Language and
Culture Center, New Delhi for promoting the promotion and propagation of the official language Hindi and for
excellent performance of the official language.

• NFL Vijaipur unit has received the following 3 awards during the month of June, 2025:

a. Greentech CSR India Winner Awards by Greentech Foundation's

b. Gold Award for Environment Excellence

c. Platinum Award for Green Belt Development

• On 30.07.2025, NFL, Panipat was awarded the Second Award for excellent work in Hindi by the Municipal
Official Language Implementation Committee, Panipat.

• NFL Vijaipur received Certificate for Eat Right Campus for 28^th January, 2025 - 27^th January, 2027 as per
guidelines established by FSSAI "Food Safety and Standards Authority of India" under the Ministry of Health
and Family Welfare.

• NFL Vijaipur unit won 2^nd prize for installation of stall at 12^th Bhopal Vigyan Mela organized by Vigyan Bharti
under the aegis of Madhya Pradesh Council of Science and technology.

• Panipat Unit has won the 2^nd Prize in the state level Energy Conservation Award (2024) from HAREDA.

• Vijaipur Unit received "Diamond Award" Under "FAME NATIONAL AWARD" for Safety Excellence -2025.

• On 30.10.2025, City Official Language Implementation Committee, Official Language (Ministry of Home
Affairs) conferred 1^st Prize for excellent performance to Nangal Unit.

• Vijaipur Unit received "Platinum award for training excellence in Fertilizer Sector PAN India by APEX India
Foundation.

• Vijaipur Unit received Platinum award for excellence work in Health, Safety and Environment by APEX INDIA
Foundation

• Panipat Unit received Gold in “Honourz Excellence award" under Energy Efficiency category.

• Vijaipur Unit received Platinum Award 2026 from Green Enviro foundation for excellence work in safety and
HSE Seven Star Platinum Award for the year 2025 by Safety Council, Madhya Pradesh.

• NFL won prestigious Award for Excellence in CSR Commitment (Overall) during the “Governance Now" 12^th
PSU awards on 11^th March, 2026 at New Delhi.

v^^i^ei^^^Ssons^pii'

Company is constantly working towards inclusive growth in the society and is implementing various
developmental activities under its Corporate Social Responsibility (CSR).

The company allocated a CSR budget of f 424.49 Lakh for the FY 2025-26 and approved various projects which
are completed and ongoing at different stages of implementation. The company incurred an expenditure of
f 298.78 Lakh during the year, including expenditure on ongoing projects of previous years.

Through its CSR initiatives, the Company is supporting sectors like healthcare, education, skill development,
environment and empowering the underprivileged sections of the society.

During the year, the Company undertook development projects in Shahdara North Zone, Delhi. One of the key
initiatives included improvement and beautification of public spaces through traditional Indian art wall paintings.
The project transformed various public walls into vibrant cultural spaces using Indian art forms such as Warli,
Madhubani, Gond and similar folk styles, while promoting cleanliness and respect for public property. Additionally,
Water Coolers with RO Purifiers were installed in MCD-run Government Schools in Shahdara North Zone,
providing safe drinking water to more than 20,000 girl students.

The Company also supported Government’s efforts towards development of the National Maritime Heritage
Complex (NMHC) at Lothal, Gujarat. The NMHC aims to create a world-class destination showcasing India’s rich
maritime heritage, including museums and research centers.

In the area of education, the Company established a Centre for Learning in Aspirational District West Singhbhum,
Jharkhand and provided competitive exam preparation training to 2500 nos. underprivileged youths at free of
cost. Further, in the Aspirational District Sheikhpura (Bihar), computer labs were set up in Government schools,
benefiting more than 2,000 students through digital literacy initiatives. The Company’s Units also supported
Government schools in their vicinity by providing school desk & benches, swings, smart classrooms, computers
and other essential facilities.

For sustainable agriculture, the Company has also established a Bio-Pesticides Laboratory at JSS Krishi Vigyan
Kendra, Suttur for research and development of Bio-pesticides. Training and awareness programmes were also
conducted for farmers to promote the use of bio-pesticides and encourage environmentally sustainable farming
practices.

A detailed report on the Corporate Social Responsibility is appended as Annexure-5 forms part of this Report.
^RESEARCH&DEVELOPMENT

Expenditure on Research & Development (including Innovation Initiatives)

The Government of India has introduced Urea Gold (Sulphur coated urea) to address soil Sulphur deficiencies
and enhance nitrogen use efficiency through a controlled and gradual release mechanism. This innovation helps
in reducing fertilizer consumption while improving crop yields.

In alignment with the Government's initiative, a 5,000 MTPA Urea Gold plant has been installed at the Nangal Unit
as part of the Company's Research & Development (R&D) efforts. During FY 2025-26, a total of 201 MT of Urea
Gold was produced, out of which 108 MT was dispatched.

The total expenditure incurred on R&D and innovation initiatives during FY 2025-26 was f 3.07 crore.

Further, NFL is planning to set up two Urea Gold plants with capacities of 250 MTPD and 300 MTPD at Nangal Unit
and Vijaipur Unit respectively.

^Conservation of Energy, TechnologyAbsorption and Foreign Exchane Earnings and^ I-

Disclosure in terms of the Companies (Account) Rules, 2014 in respect of Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo is appended as Annexure-6 forms part of this Report.

^Safety, Environment and Sustainable Development^,.

Company has undertaken various initiatives for adopting best practices for health, safety environment
management and sustainable development and the details of the same is appended as Annexure-7 forms part of
this Report.

Particulars of loans given, guarantees provided, investments in securities and acquisitions made by the Company
during the year under review are given in Form MBP-2 and the same is appended as Annexure-8 forms part of
this Report.

^Joint venture /Associates Companies^J ||"

Details of Joint Venture/Associates Companies pursuant to Section 129(3) of the Companies Act, 2013 the
statement containing the salient features of the Financial Statement of the Associate Company/Joint Venture
Company is included in the Consolidated Financial Statements is appended as Annexure-9 forms part of this
Report.

^om_|S=h

During the year 2025-26, Company has entered into a Joint Venture Agreement among Government of Assam
(GoA), Oil India Limited (OIL), Hindustan Urvarak & Rasayan Limited (HURL) and Brahmaputra Valley Fertilizer
Corporation Limited (BVFCL) on 04.07.2025. Joint Venture Company has been incorporated on 25.07.2025 in the
name of “Assam Valley Fertilizer And Chemical Company Limited" (AVFCCL). AVFCCL is a 40:18:18:13:11 Joint
Venture Company among GoA, NFL, OIL, HURL and BVFCL respectively. Apart from AVFCCL, Company has not
acquired or formed any new subsidiary, associate or joint venture.

Further, no subsidiary, associate or joint ventures have been ceased by way of sale of shares, amalgamation,
winding up etc. during the year 2025-26.

The particulars of contracts/arrangement entered into by the Company with related parties referred to in Section
188(1) of the Companies Act, 2013 including arm's length transactions under third proviso thereto are disclosed in
Form AOC-2 and the same is appended as Annexure-10 forms part of this Report. Related Party Transaction
Policy of the Company is available at www.nationalfertilizers.com.

The achievement in CAPEX is ?247 crore excluding capital work in progress (CWIP) in the year 2025-26.

The chemical fertilizer industry is operated in a hazardous environment and faces many risks including those
related to health, safety and environment in addition to general business & financial risks. In order to mitigate
them, the company has a comprehensive Risk Management Policy which is regularly reviewed and a periodical
review of the risks, procedures and strategies is undertaken.

To review the new risks evolved during the quarter along with mitigation action undertaken as well as anticipated
risks along with mitigation actions planned in future, the company has a two tier system where quarterly risks
report is first reviewed by the Risk Assessment Committee (RAC) and thereafter final report is submitted to Risk
Management Committee (RMC) for its recommendations before submission to Audit Committee and the Board of
Directors. Efforts are made in a planned way to obviate the risks either fully or to minimize their impact.

Under Risk Management policy, all the risks along with mitigation actions undertaken have been reviewed by Risk
Assessment and Risk Management Committees. Some of the major risk having severe financial impact as
identified by the company include implementation of Target Energy Norms under NUP-2015 which resulted
reduction in profit margin mainly at Vijaipur-I unit & RLNG/NG supply constraints due to geopolitical factors and its
impact on production.

Details in respect of adequacy of internal financial controls with reference to financial statements are given in
Management Discussion & Analysis Report.

||.

The Company has, in all material respects, an adequate internal financial controls system over financial reporting
and such internal financial controls over financial reporting were operating effectively as at 31.03.2026.

^particulars of ^Employees |

As per provisions of section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appoinment
and Remuneration of Managerial Personnel) Rules, 2014, every listed Company is required to disclose the ratio of
the remuneration of each Director to the median employee's remuneration and other prescribed details in the
Board's Report.

As per notification dated 05.06.2015 issued by Ministry of Corporate Affairs, these provisions are not applicale to
the Government Company. Accordingly, these particulars are not included in the Board's Report.

^Public Procurement Policy ofMicro and Small Enterprises (MSEs) Order, Ý !-

Public Procurement Policy for Micro and Small Enterprises (MSEs) was notified by the Government under the
Micro, Small and Medium Enterprises Development Act, 2006 which stipulated that 20% of total annual
procurement of goods and services shall be made by all Central Ministries /Departments /CPSUs from Micro &
Small Enterprises (MSEs). Within this percentage, a sub total of 4% procurement is to be made from MSEs owned
by SC/ST entrepreneurs. This Policy has become mandatory w.e.f. 01.04.2015. The requisite information for the
year 2025-26 is appended as Annexure-11 forms part of this Report.

||.

Details regading Payments to MSE Vendors (directly or through TReDS) including payments made and payments
pending beyond 45 days from the date of actual delivery of goods and/or services:

During the year, total procurement of Goods and Services was f 1284.52 Crore out of which total procurement
through GeM portal was f 1270.95 Crore.

ÝTReDS 1||.

Platform-wise details for all TReDS platforms regarding on-boarding of the NFL and its subsidiaries (if any):

The Company has manpower strength of 2612 regular employees as on 31.03.2026, which comprises 1253
Executives and 1359 Non- Executives. 198 women employees are on its roll, which is 7.58% of the total work
force. The detailed analysis with regard to human resource including training and executive development
programme have been made in the Management Discussion and Analysis Report.

• Employee Strength: The Company had 2612 employees as at the end of FY 2025-26 of which 1187 were
SC/ST/OBC employees and 50 divyangjans.

• Employee Benefits: The vision of the Company for its human resources is to create an enabling environment
to enhance the efficiency of the organization. The aim is to encourage the employees to perform their best
ability by a system of proper placements and incentives, while creating an atmosphere of trust and a feeling
that the organization cares about the wellbeing and personal aspirations of the staff. This helps align personal
aspirations with professional goals and enhances efficiency. The Company runs multiple benefit schemes for
its employees like Provident Fund, gratuity, pension, medical benefits, contributory pension scheme,
concessional interest rates on loans, scholarships to employees' children, executive health check-up etc. The
Company also shares part of its profit with employees under its Performance Related Pay scheme in
compliance with DPE Guidelines.

• Human Rights: Recruitment policy of the Company does not permit any engagement of child labour, forced
labour or involuntary labour, An independent Internal Complaint Committee has been constituted at Corporate
Office and each Unit to promptly and appropriately handle complaints of sexual harassment at work places.
The Company refrains from any discrimination on the basis of caste, creed, gender or religion and strives to
ensure a healthy work-life balance for its employees.

• Employee Well Being: NFL believes that workforce is the greatest asset that propels the growth engine.
Employees are considered as “Change Catalysts" and the Company nurtures and channelize the expertise
and talent of employees for growth performance, feedback, motivation and training. The achievements and
efforts are appreciated, acknowledged & rewarded.

• On the health front also, Company looks after each & every employee along with his/her dependents for
protection from unhygienic conditions and treatment of various illnesses.

An independent Internal Complaint Committee has been constituted at Corporate Office and each Unit to
promptly and appropriately handle complaints of sexual harassment at work places. During 2025-26, disclosure in
relation of the Sexual Harassment of Women at workplace is as under:

No. of Complaints filed during the FY-01 (One)

No. of complaints disposed of during the FY-02 (Two)

No. of complaints pending for more than 90 days during the FY- 01 (One)

No. of complaints pending as at the end of FY-01 (One)

The Company is fully committed to upholding the rights and welfare of its employees in accordance with the
applicable laws. In line with this commitment, the Company ensures compliance with the provisions of the
Maternity Benefit Act, 1961, as amended from time to time and maternity benefits are extended to 100% of female
employees.

|i-

During the year under review, no application was made and no proceeding is pending under the Insolvency and
Bankruptcy Code, 2016 during the financial year 2025-26.

|i.

During the financial year 2025-26 no event has taken place that gives rise to reporting of details with respect to
difference between amount of the valuation done at the time of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions.

^Implementation o,Official Language PolicyB|,.

The Company is continuously striving for promotion, dissemination and implementation of Official Language
Policy of the Union of India. Quarterly Meetings of the Official Language Implementation Committee are regularly
organized at the Corporate Office and Unit/Zonal Office levels to review the progress of use of official language,
Hindi. A total of 36 meetings were conducted during the year.

To promote the use of official language, Hindi, 37 Hindi workshops were organized during the year in which 814
personnel participated. Hindi Fortnight was celebrated across all units and offices of the company to mark the
occasion of Hindi Diwas. During the year, a total of 44 programs and competitions were organized for the
promotion and dissemination of the official language, in which 1386 employees participated and 353 winners and
participants were honored. Additionally, 65 employees were rewarded under the Cash Prize Scheme.

To mark the completion of 50 years of Department of Official Language, nominated personnel from NFL units and
offices participated in the "Department of Official Language Golden Jubilee Celebrations" held at Bharat
Mandapam, New Delhi, on 26^th June, 2025.

Nominated representatives from NFL units and offices also participated in the 5^th “All India Official Language
Conference" organized by the Department of Official Language, Government of India to commemorate 'Hindi
Diwas' on 14^th and 15^th September, 2025 at Mahatma Gandhi Convention & Exhibition Centre, Gandhi Nagar,
Gujarat.

A official language inspection tour and meeting program was successfully organized in Indore on 7^th October, 2025
for NFL Zonal Office, Bhopal, by the First Sub-Committee of the Parliamentary Committee on Official Language
during the year 2025-26.

NFL ensured its representation at the 'Sanyukt Rajbhasha Sammelan Evam Puraskar Vitran Samaroh' organized
by the Department of Official Language, Ministry of Home Affairs, on 20^th January, 2026 at Devi Ahilya
Vishwavidyalaya, Indore, Madhya Pradesh.

NFL Nangal Unit was awarded the Official Language Shield (First Prize) by TOLIC-Rupnagar on 22^nd May, 2025
for its Outstanding Performance in the field of Implementation of official language Hindi during the year 2023-24,
the unit was further honored with the Official Language Shield (First Prize) for the year 2024-25 during the half¬
yearly meeting held on 30^th October, 2025. Under the 61^st half-yearly meeting of TOLIC (Undertakings)
Hyderabad-Secunderabad held on 29^th May, 2025, NFL Zonal Office, Hyderabad was honored with the "Garima
Puraskar" for its Outstanding Performance in the field of Implementation of official language Hindi. NFL Vijaipur
Unit was awarded the First Prize and Official Language Shield for its Excellent Work in the official language Hindi
during the year 2024-25 at the half-yearly meeting organized by the Town Official Language Implementation
Committee, Guna (Madhya Pradesh) on 24^th December, 2025.

Company is committed to the development of employees belonging to reserved categories. An Implementation
Cell is functional in all Units/ Offices of the Company to oversee the implementation of Presidential Directives on
Reservation Policy for SCs / STs. Liaison Officer has been appointed in each Unit / Office and Chief Liaison Officer
at CO, Noida to ensure due compliance of orders and instructions pertaining to reservation for SCs and STs and
other concessions admissible to them. Meetings were periodically held at Unit level as well as at corporate level
with the SC /ST Employees Welfare Associations by the Management for redressal of grievances of SC /ST
employees. A statement showing representation of employees belonging to Scheduled Caste / Scheduled Tribes /
Other Backward Classes / Persons with disabilities is appended as Annexure-12 forms part of this Report.

Schedule of Compliances with Presidential Directive issued during financial year 2025-26 and during last three
year preceding the financial year 2025-26 is as below:

^Information Technology & Details ofCyberSecurity incidents and its preventives^,-

The Information Technology Department continued to serve as the backbone of NFL’s digital transformation
journey, enabling the organization to achieve operational excellence, enhance productivity and respond
effectively to the evolving needs of the industry. During the financial year 2025-26, the Company undertook
several significant initiatives aimed at modernizing its IT landscape, strengthening cybersecurity and improving
digital resilience across its operations.

As part of its modernization drive, NFL successfully phased out several legacy systems including the Dispatch
Management System, Marketing Management & Information System and the Employee Self-Service Portal and
replaced them with a comprehensive Enterprise Resource Planning (ERP) system. The ERP platform has been
designed as an integrated business solution to enable real-time access to information, improves process
efficiency, enhance transparency and support informed decision-making across various business functions. This
strategic initiative marks a major step in the Company’s digital transformation roadmap and is expected to
contribute significantly towards long-term growth, improved operational agility and enhanced competitiveness in
a rapidly changing business environment.

During the year, NFL also continued to strengthen its IT infrastructure and network architecture to ensure secure
and uninterrupted access to critical business applications. In this direction, the Company deployed a Software-
Defined Wide Area Network (SD-WAN) solution to provide seamless, secure and reliable connectivity across all
operational locations. In addition, critical business applications are hosted in an ISO 27001:2022 standard data
centre, thereby supporting enhanced business continuity, system availability and information security.

Overall, NFL continued to lead a series of digital transformation initiatives during the year, focused on streamlining
operations, strengthening information security and adopting emerging technologies to maintain a competitive
edge in an increasingly dynamic business environment.

During the financial year 2025-26 no Cyber Security Incident, Cyber Breaches or loss of data/documents were
observed in the Company.

During the year, the Company continued to maintain and strenghthen its cyber security framework through
proactive preventive monitoring and control mechanisms aimed at safeguarding its digital assets, applications
and network infrastructure. As part of these measures, NFL implemented Honey Pot sensors at strategic points
within its IT environment to enable early detection and monitoring of potential cyber threats. Further, the hosting of
critical business applications in ISO 27001:2022 certified data centre along with the deployment of SD-WAN
solution, has significantly strengthened the Company’s cyber security posture and improved resilience against
evolving cyber risks.

The Statutory Audit of your Company was conducted by Chartered Accountants firms M/s Dassani & Associates
LLP, Chartered Accountants and M/s R S P H & Associates, Chartered Accountants, Joint Auditors appointed by
Comptroller & Auditor General of India (C&AG). Auditor's Report on the Financial Statements including
consolidated Financial Statements of the Company for the financial year 2025-26 is attached.

Proposal authorizing Board of Directors to decide & fix remuneration of Statutory Auditors appointed/ to be
appointed by the Comptroller and Auditor General of India for the FY 2026-27 is placed for your approval.

Statutory Auditors of the Company have issued an Audit Report with Unmodified opinion on Audited Financial
Results of the Company (Standalone & Consolidated) for the financial year ended 31.03.2026.

^Com_men,so,C&AGB|,.

The Financial Statement (Standalone and consolidated) of the Company are subject to comments of C&AG of
India under Section 143(6)(b) read with Section 129(4) of the Companies Act, 2013 which shall be sent to
shareholders separately.

As prescribed under Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit)
Rules, 2014, the cost accounting records are being maintained by all the Units of the Company. Cost Audit for
2025-26 was carried out by Cost Auditors M/s K.L. Jaisingh & Co., M/s Diwanji & Associates, M/s TYPSGO & Co.
and M/s Dhananjay V. Joshi & Associates, as prescribed under the Companies Act, 2013 and Rules framed
thereunder. M/s Dhananjay V. Joshi & Associates acted as the Lead Cost Auditor. Consolidated Cost Audit Report
for the FY 2024-25 was filed with Ministry of Corporate Affairs (MCA) on 11.09.2025.

^Internal Auditors^

Company has an Internal Audit Department headed by Chief General Manager I/c. To carry out Non-Technical
Audit, your company had appointed nine Chartered Accountant firms namely M/s AMAA & Associates, M/s SP
Chopra & Co., M/s jLn US & Co., M/s KK Goel & Associates, M/s JN Gupta & Co., M/s Dharam Raj & Co., M/s ASA
& Associates, M/s Ravi Rajan & Co., and M/s S.L Chhajed & Co. for the year 2025-26. Technical Audit and IT/ EDP
Audit was carried out by in-house internal audit teams.

Internal auditors are appointed for various Units / Offices of NFL at all major locations. Internal audit is conducted
by external independent Audit firms and their reports are put up to the concerned HoD’s at places where they are
appointed. Thereafter, the reports and the action taken by the Management is reviewed by the Audit Committee.

M/s Agarwal S. & Associates, Practicing Company Secretaries was appointed by the Members of the Company at
the 51^st Annual General Meeting held on 29^th September, 2025 for undertaking the Secretarial Audit for a term of
five consecutive financial years commencing from April 1^st, 2025 till March 31^st, 2030 in terms of Section 204 of
Companies Act, 2013 and Rules made there under. Secretarial Audit Report for the year 2025-26 and
Management's explanation to Secretarial Auditor's observations are appended as Annexure-13 which forms part
of this Report.

Annual Secretarial Compliance Report for the Financial Year ended 31.03.2026 issued by M/s Agarwal S. &
Associates, Practicing Company Secretaries, under Regulation 24A of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is appended as Annexure-14 which forms part of this Report.

^Compliance with Secretarial Standards^.-

The Company complies with all applicable Secretarial Standards issued by “The Institute of Company Secretaries
of India".

The detailed disclosures have been made in the Corporate Governance Report annexed to this report.
domination & Remuneration Committee and RemuneSS^Il.

Disclosures regarding Nomination & Remuneration Committee and Remuneration Policy are given in the
Corporate Governance Report annexed to this report.

Disclosures regarding Stakeholders Relationship Committee are given in the Corporate Governance Report
annexed to this report.

Corporate Social Responsibility and Sustainable DevelopmentCommitteeM||.

Disclosures regarding Corporate Social Responsibility and Sustainable Development Committee are given in the
Corporate Governance Report annexed to this report.

Ministry of Corporate Affairs has granted exemption vide notification No. GSR463 (E) dated 05.06.2015 to the
Government Companies from the provisions of Section 134(3)(p) of the Companies Act, 2013. Director's
appointment and remuneration is decided by the Government of India. Keeping in view the exemption, no
Remuneration Policy has been formulated.

The details of Board Meetings, Committee Meetings and Meetings of Independent Directors are given in the
Corporate Governance Report annexed to this report.

^Annual Return u/s 92(3) of the Companies Ac_t, Ý !-

The Annual Return of the Company will be made available on the website of the Company at
www.nationalfertilizers.com.

^Investor Education and Protection Fund«.-

The Company has complied with all the provisions relating to the Investor Education and Protection Fund (IEPF)
under the Companies Act, 2013 and The Investor Education and Protection Fund Authority (Accountng, Audit,
Transfer and Refund) Rules, 2016, made thereunder. Company Secretary is the Nodal Officer to deal with IEPF
Authority and compliances related thereto.

During the year 2025-26, an amount of ?4,06,189.59 of unpaid/unclaimed dividend amount was transferred to
Investor Education and Protection Fund on account of unpaid/unclaimed dividend. Accordingly as per Section
124(6) of the Companies Act, 2013 and Rules notified thereunder, 8,961 shares were transferred to demat
account of IEPF. The details of the unpaid/unclaimed dividend and shares transferred to IEPF Account for the
previous years are available at the website of the Company www.nationalfertilizers.com.

luring ^||.

Company's equity Shares are listed at National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).
Other disclosures regarding listing regulations have been made in Corporate Governance Report.

l^"^gFeel|i-

Company has paid requisite listing fee to the stock exchanges during the year 2025-26.

All matters relating to transfer/transmission of shares, issue of duplicate share certificates, payment of dividend,
de-materialization and re-materialization of shares and redressal of investors grievances are carried out by the
Company's RTA i.e. M/s MAS Services Limited, New Delhi.

^Codeo,Conduct^,Ý

Board Members and the Senior Management Personnel have affirmed compliance with the Code of Conduct for
the financial year ended 31.03.2026. Code of Conduct has been uploaded on the website of the Company at
www.nationalfertilizers.com.

Details regarding various corporate policies & codes are given in the Corporate Governance Report and also
available on the website of the Company at www.nationalfertilizers.com.

|i-

FEMA Regulations applicable to Companies owned or controlled by non-resident entity(s) are not applicable to
NFL.

^ Business _De,elopm^«,.

Overview of the Indian & Global fertilizer industry is given in the Management Discussion & Analysis Report
annexed to this report.

No fraud has been reported by the Auditor to the Audit Committee or to the Board during the FY 2025-26.

vg^jj^e^niSiSiiiis^niN*¹"

Not applicable.

Management

In compliance with provisions of Section 203 of the Companies Act, 2013, Key Managerial Personnel (KMP)
position as on 31.03.2026 is as follows:

Dr. U. Saravanan, Chairman & Managing Director.

Shri Ashok Jha, Company Secretary.

Further, Shri Hira Nand, Chief Financial Officer and Director (Finance) ceased to be CFO & D(F) w.e.f. 01.03.2026
on attaining the age of superannuation.

MMAMmimh-

~^ianges^compositj^~^Bi^HiHiii^^HiiiiHiHiiiiiiiiiiii

Shri Megh Nath Goyal was appointed as Director (Technical) in terms of DoF Order No. 82/1/2021-HR-PSU (e-
27314) dated 04.11.2025 w.e.f. 05.11.2025.

Ms. Ritu Goswami, Director (Technical), Rashtriya Chemicals & Fertilizers Limited (RCFL) who was holding the
additional charge of Director (Technical), National Fertilizers Limited w.e.f. 22.07.2025 ceased to be the Director
(Technical) on appointment of regular incumbent w.e.f. 05.11.2025.

Shri Anurag Rohatgi was appointed as an Additional Director (Part Time Government Nominee Director) w.e.f.

19.12.2025 vice Shri Bharat Bhushan, in terms of DoF Order No. 95/1/2019-HR-PSU (Part -2) (e-31042) dated

18.12.2025, until further orders.

Shri Hira Nand ceased to be Director (Finance) w.e.f. 01.03.2026 on attaining the age of superannuation.

Shri Kuntal Sensarma was appointed as an Additional Director (Part Time Government Nominee Director) w.e.f.

17.04.2026 vice Dr. Prathibha A., in terms of DoF Order No. 95/1/2019-HR-PSU (Part -2) (e-31042) dated

17.04.2026, until further orders.

The first term of Shri Jyoti Bhramar Tubid as Non-Executive Independent Director was completed on 20.04.2025.
He was further appointed as Non-Executive Independent Director for a period of one year w.e.f. 05.05.2025 in
terms of DoF Letter No. 95/01/2025-HR-PSU (e-38792) dated 5^th May, 2025. He has completed his tenure on

04.05.2026 and ceased to be Non-Executive Independent Directors w.e.f. 05.05.2026.

Shri Rabi Ranjan Sen was appointed as Non-Executive Independent Director for a period of one year w.e.f

05.05.2025 in terms of DoF Letter No. 95/01/2025-HR-PSU (e-38792) dated 5^th May, 2025. He has completed his
tenure on 04.05.2026 and ceased to be Non-Executive Independent Directors w.e.f. 05.05.2026

Shri Arvind Kumar was appointed as Director (Finance) in terms of DoF Order No. 82/3/2013-HR-PSU (Part) (e-
31064) dated 08.05.2026 w.e.f. 12.05.2026.

Shri Mahesh Chander Gupta was assigned the additional charge of Director (Finance), National Fertilizers
Limited w.e.f. 03.03.2026 in terms of DoF Order No. 82/3/2013-HR PSU (e-28269) dated 03.03.2026 for a period
of three months with immediate effect or till regular incumbent joins the post, or until further orders, whichever is
the earliest. He was holding additional charge of Director (Finance) upto 11.05.2026.

Shri Mahak Singh was appointed as Non-Executive Independent Director for a period of three years w.e.f.

14.08.2026 in terms of DoF Letter No. 95/01/2025(v)-HR-PSU (e-38759) dated 13^th August, 2026.

Details of tenure of Directors are provided in the Corporate Governance Report.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr. U. Saravanan (DIN: 07274628) and
Shri Mahesh Chander Gupta (DIN: 10996394) will retire by rotation at the ensuing AGM and being eligible have
offered themselves for re-appointment.

^Declaration by independent Directors u/s 149(6) ofthe Companies Act, 2,13M||-

All Independent Directors have given declaration that they meet the criteria of Independence as laid down in
Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. In the opinion of the Board, the
Independent Directors posses integrity and necessary expertise & experience.

^Re-appointment of Independent Directors^^[||"

As per Section 149(10) of the Companies Act, 2013, none of the Independent Directors have been reappointed on
the Board of the Company during the FY 2025-26.

Although, the first term of Shri Jyoti Bhramar Tubid as Non-Executive Independent Director was completed on
20.04.2025. He was further appointed as Non-Executive Independent Director for a period of one year w.e.f.
05.05.2025 in terms of DoF Letter No. 95/01/2025-HR-PSU (e-38792) dated 5^th May, 2025. He has completed his
second tenure on 04.05.2026 and ceased to be Non-Executive Independent Directors w.e.f. 05.05.2026.

None of the Directors have committed any disqualification as provided under Section 164 of the Companies Act,
2013.

^Remuneration to Director^,-

Details of Remuneration to Directors and Company Secretary are given in the Corporate Governance Report
annexed to this Report.

^Performance evaluation of Board ofDirec,orsM||.

The details regarding performance evaluation of Board of Directors have been given in the Corporate
Governance Report.

^Directors' Responsibility Statement |.-

Pursuant to the requirement of Section 134(3) (c) of the Companies Act, 2013, your Directors confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along
with proper explanation relating to material departures;

b) The Directors had selected such accounting policies and applied them consistently and made judgments
and estimates 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 2025-26 and of the profit of the Company for that period;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the 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 going concern basis;

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

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

^Acknowledgments'^],"

The Board of Directors acknowledge their gratitude for the valuable guidance and support received from the
various wings of Government of India, in particular Department of Fertilizers, Fertilizer Industry Coordination
Committee (FICC), various State Governments, Financial Institutions, Banks, stakeholders and all others whose
continued support has been a source of strength to the Company.

Your Directors also acknowledge the suggestions received from Statutory Auditors, Internal Auditors, Cost
Auditors, Secretarial Auditors and Comptroller and Auditor General of India and are grateful for their continued
support and cooperation.

The Board would like to place on record its appreciation to the hard work, commitment and unstinting efforts put in
by the employees at all levels throughout the year. Board also place on record active support and cooperation
received from Employees Trade Union and Officers Association for sustained improvements.

Registered Office: For and on behalf of the Board of Directors

Scope Complex, Core-III,

7, Institutional Area, Lodhi Road, New Delhi-110003.

Date: 20^th August, 2026 (Dr. U. Saravanan)

Chairman & Managing Director
DIN: 07274628