1. The Company had entered into BOT agreement with Jarandeshwar SSK Ltd, Satara, Maharashtra to put up Distillery Plant (35 KLPD) on land acquired on lease basis from them. As per agreement the Company is entitled to operate the Distillery till February 2023 and thereafter to transfer the Distillery to Jarandeshwar SSK Ltd at depreciated value.

The BOT agreement has expired as on date and hence the Company has transferrred the depreciated value of the assets relating to Distillery plant as receivable and have disclosed the same under other Financial assets as per the terms of the agreement.However the Company is negotiating with the concerned party for the lease renewal.

(a) Laxmi Organic Industries (Europe) B.V. has issued one cumulative preference share to Laxmi Organic Industries Limited @ 20,00,000 Euro redeemable on August 28, 2020. The term of the said preference share is further extended for two years vide agreement dated August 28, 2022 till August 28, 2024. The above preference share carry dividend coupon rate of 4% per annum.

(b) During the current year, the Company has made the following investments:

i) Radiances Sunrise Seven Private Limited

The Company has been supplementing its incremental energy requirements by sourcing power from renewable sources. To this end, the Company has executed a Share Subscripton and Shareholder’s Agreement dated February 9, 2022 to acquire 26% stake in Radiances MH Sunrise Seven Private Limited for supply of 4.2 MW electricity generated through Solar Power Plant (“Solar Plant”) at a concessional rate with a minimum entitlement of 51% of power generated from the Solar Plant. To this effect the Company has subscribed 15,12,000 equity shares of ? 10 each of Radiances MH Sunrise Seven Private Limited on June 30, 2022.

I) The terms of OCRPS is as follows:

The issue price (including premium) of OCRPS to be allotted on preferential basis is determined based on valuation report dated November 1, 2022 obtained from Registered valuer

The OCRPS are issued for a period of 120 months and there is no lock in period.

II) Conversion Option

After 24 months but with in 120 months post allotment of OCRPS, the holder of OCRPS shall have a right to either

i) Convert the same into equity shares or

ii) To redeem the same, in various tranches as per the discretion of OCRPS holder, provided conversion or redemption request shall consist of not be less than 10% of OCRPS holding as on date if allotment of OCRPS. If OCRPS holder opt to convert one tranche there is no restriction to apply for redemption in second tranch and vice versa.

III) Redemption Option Holder Option:

OCRPS can be either at the option of holder at any time after 24 months (2 years) but within 120 months from the date of issue

a) converted the same into equity shares OR

b) redeemed in one or more tranch provided the minimum quantity to be converted/redeemed shall not be less than 10% in each such tranch

Issuer Option:

OCRPS can be either at the option of issuer at any time after 36 months (3 years) but within 120 months from the date of issue

a) converted the same into equity shares OR

b) redeemed in one or more tranch provided the minimum quantity to be converted/redeemed shall not be less than 10% in each such trench.

In the event

i) the holder does not wish to exercise the right to convert OCRPS in to equity shares, it shall have a right to demand redemption of not less than 10% of OCRPS holding after expiry of 24 months but with in 120 months post allotment of OCRPS.

ii) the issuer does not wish to exercise the right to convert OCRPS in to equity shares, it shall have a right to demand redemption of not less than 10% of OCRPS holding after expiry of 36 months but within 120 months post allotment of OCRPS.

In case redemption request either by the holder or the issuer

Redemption shall be made in 4 equal half yearly installment (along with premium, paid at the time of allotment) from the date of receipt of redemption request from the holder/issuer; 1^st Installment within 30 days, 2^nd Installment after 6 months, 3^rd Installment after 12 months, 4^th Installment after 18 months

iii) Acetyls Holding Private Limited

The Hon’ble National Company Law Tribunal (‘NCLT’), Mumbai Bench, vide hearing convened on August 25, 2022, has sanctioned the Scheme of Merger by Absorption of Acetyls Holdings Private Limited (AHPL) and Yellowstone Chemicals Private Limited (YCPL) (“Transferor Companies”) with the Company under Section 230 to Section 232 of the Companies Act, 2013 and thereby the books of accounts of AHPL has been merged with the Company. The disclosure of business combination is given in Note 5 (K).

iv) Laxmi Petrochem Middle East FZE

Laxmi Petrochem Middle East FZE, a Wholly Owned Overseas Subsidiary of the Company, incorporated in Dubai, has been dissolved during the year vide termination certificate issued by Hamriyah Free Zone Authority, Government of Sharjah with effect from December 8, 2022.

v) The Company is in the process of striking of the following WOS:

Laxmi Lifesicences Private Limited Yellowstone Specialty Chemicals Private Limited

(c) In the Financial year 2021-22, the Company has made the following investments:

i) Laxmi Italy Srl

Laxmi Italy Srl was incorporated on July 19, 2021. The shares of the said Company were purchased by the Company’s Wholly Owned Subsidiary namely, Yellowstone Fine Chemicals Pvt Ltd. (YFCPL) as per the terms of Share Purchase Agreement dated August 4, 2021. Consequently, Laxmi Italy Srl became a step-down subsidiary of the Company.

ii) Laxmi USA LLC

Laxmi USA LLC was incorporated during the previous year on August 31, 2021, however capital infusion is not yet made in this entity.

A) Expected Credit Loss

Allowance for Expected Credit Loss

In accordance with Ind AS 109, the Company uses the expected credit loss (“ECL”) model for measurement and recognition of impairment loss on its trade receivables or any contractual right to receive cash or another Financial asset that result from transactions that are within the scope of Ind AS 115. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers. The Company estimates impairment under the simplified approach. Accordingly, it does not track the changes in credit risk of trade receivables. The impairment amount represents lifetime expected credit loss.

(c) Insurance claim receivable

The specialty intermediates unit at Mahad suffered unprecedented flooding in July 2021. Loss assessment and insurance survey are underway as on the Balance Sheet date. Insurance claim has been recognized for the amount of cost of inventory damaged in the floods and loss restoration expenses incurred by the Company which are reasonably expected to be realised from the Insurance Company. Considerable progress has been made with the surveyor in connection with the claim under the policy of insurance.

B) Initial Public Offer

In 2020-21, the Company had completed the Initial public offer (“The Offer/lPO”) of 4,61,53,846 equity shares of face value of ? 2/- each at a price of ? 130/- per share (including a premium of ? 128/- per share) aggregating to ? 6,000.00 million.

The Offer comprised of a fresh issue of 2,30,76,923 equity shares aggregating to ? 3,000.00 million and an offer for sale of 2,30,76,923 equity shares aggregating to ? 3,000.00 million by Yellow Stone Trust.

The Company also did private placement of 1,55,03,875 equity shares of face value of ? 2/- each at a price of ? 129/- per share (including a premium of ? 127/- per share) aggregating to ? 2,000.00 million (“Pre-IPO Placement”).

Total securities premium received from IPO and pre IPO placement is ? 4,922.84 million and is reduced by the Company’s share of IPO related expenses of ? 156.99 million resulted into net receipt of securities premium of ? 4,765.85 million.

Pursuant to the IPO, the equity shares of the Company got listed on BSE Limited and NSE limited on March 25, 2021.

Further the actual utilization towards repayment of loan was lower by ? 63.94 million and in terms of our prospectus we are entitled to allocate such amount to general corporate purposes so long as the allocation does not result in general corporate puropose exceeding 25%. This has resulted in general corporate purpose increasing from ? 637.29 to 744.76 million. During the current year, there is an increase in the available funds for general corporate purpose of ? 0.26 million resulting in total of ? 745.02 which is fully utilized in current year.

‘There has been a saving in the original estimate of IPO issue expenses (Company’s share) of ? 43.58 million which has resulted in increase in total available fund net off expenses from ? 4,799.94 million to ? 4,843.52 million. This amount is adjusted in general corporate purposes.

Further the actual utilization towards repayment of loan was lower by ? 63.94 million and in terms of our prospectus we are entitled to allocate such amount to general corporate purposes so long as the allocation does not result in general corporate puropose exceeding 25%. This has resulted in general corporate purpose increasing from ? 637.29 to 744.76 million.

(*#) Balance of IPO proceeds as at March 31, 2023 and as at March 31, 2022 which are kept in fixed deposit and bank balance are shown under Other bank balances.

C) Terms/rights attached to equity shares

The Company has only one class of shares referred to as equity shares having par value of ? 2/- each. Holder of each equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

F) As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders, the above shareholding represents legal ownerships of the shares.

G) On January 30, 2019 the Company has issued Bonus shares - (4,00,36,324 shares) to all its existing shareholders in the ratio of 4:1 shares at face value of ? 10/-. The aforesaid issue is made by utilising the balance in Retained Earnings of the Company.

H) On January 1, 2020 the Company completed buy back of 50,29,010 equity shares (of face value of ? 10/- each) from International Finance Corporation (IFC), who were the only shareholder who tendered in the offer, at an aggregate value of ? 820.14 million. The buy back was completed by utilising the balance in Securities Premium and General Reserve. The Company has cancelled 50,29,010 equity shares of face value of ? 10/- each and has created Capital Redemption Reserve amounting to ? 50.29 million by debiting the balance in General Reserve.

I) Pursuant to the recommendation and resolution passed at the meeting of the Board of Directors, the shareholders in their meeting held on November 24, 2020 approved the split of 1 equity share of the face value of ? 10/- each into 5 equity shares of the face value of ? 2/- each. Accordingly, the issued, subscribed and paid up capital of the Company was subdivided from 4,50,16,395 equity shares of face value of ? 10/- each to 22,50,81,975 equity shares of face value of ? 2/- each.

J) Shares reserved for issue under stock option plan to employees are detailed in note no 31.

K) Merger of Acetyls Holding Private Limited (AHPL) and Yellowstone Chemicals Private Limited (YCPL) with Laxmi Organic Industries Limited (LOIL)

Pursuant to the Scheme of Merger (‘the Scheme’) of Acetyls Holding Private Limited,Yellowstone Chemicals Private Limited and Laxmi Organic Industries Limited under the provisions of Sections 230 to 232 of the Companies Act, 2013 which has been approved by the National Company Law Tribunal vide their order delivered on August 25, 2022,

2013 (the Act). The Company primarily provides engaged in the business of manufacturing of Ethyl Acetate, Acetaldehyde and supply of organic & Specialty Chemicals (services) to its group Company. The Company commenced business operations on June 12, 2019. The Company’s Board of Directors has provided in principal approval to the merger of the Company with LOIL, at its board meeting on November 2, 2021. Subsequently, at a board meeting held on November 2, 2021, the Board of Directors approved the scheme of merger and swap ratio, identifying the effective date for merger as October 2, 2021. National Company Law Tribunal (NCLT) order approving the scheme of merger has been pronounced on August 25, 2022 and issued on August 25, 2022.

(iii) Appointed date

The appointed date for the purpose of this amalgamation is October 2, 2022.

(iv) Accounting Treatment

In accordance with the scheme approved, the accounting for this amalgamation has been done in accordance with the “Pooling of Interest Method” referred to in Appendix C -Business combinations of entities under common control of

Indian Accounting Standard 103 - “Business Combination” of the Companies (Indian Accounting Standards) Rules, 2015.

LOIL has accounted for the Scheme in its books of accounts with effect from October 2, 2021 as explained in para 5(K) above.

1. With effect from October 2, 2021, all assets and liabilities appearing in the books of accounts of AHPL and YCPL have been transferred to and vested in LOIL and have been recorded by LOIL at their respective carrying values.

2. The difference between the carrying values of net identifiable assets and liabilities of AHPL, YCPL transferred to LOIL pursuant to this scheme and the value of investments in the books of LOIL of AHPL and YCPL) has been disclosed as Amalgamation Adjustment Deficit Account as per the provisions of Appendix C of Ind AS 103.

3. All inter Company transactions have been eliminated on incorporation of the accounts of AHPL and YCPL in LOIL.

Notes:

A) Term loan includes:

i) Rupee term loan from banks (HDFC Bank Ltd):

Tenure of loan: max 60 months

Repayment: 18 equal installments after a moratorium period of 6 months from the date of 1^st disbursement Interest: Linked with HDFC Bank 1 year MCLR 0 bps

ii) Rupee term loans from NBFC (Axis Finance Ltd):

Tenure of loan: max 72 months

Repayment: 18 equal installments after a moratorium period of 18 months from the date of 1^st disbursement Interest: Linked with Axsi Bank 1 year MCLR 0 bps

iii) Foreign currency term loans from bank (Citi Bank NA, Jersey):

15 equal quarterly installments in foreign currency starting from October 2019. Interest is payable @ 3 months USD Libor plus 175 bps p.a.

The Company converted this ECB into INR loan under CCY SWAP on April 2, 2019 at fixed interest rate of 7.90% p.a.

B) Security of term loans:

a) First pari passu charge on all present and future movable and immovable Property, plant and equipment of the Company situated at A/22/2/3, A/22/2/3(P), A A-22/2/2, Mahad Industrial Area, Dist Raigad Maharashtra.

b) First charge on all present and future movable and immovable Property, plant and equipment of the Company situated at B/2/2, B-3/1/1 MIDC B-3/1/2 Mahad Industrial Area, District. Raigad.

External Commercial Borrowing (Term Loan)

a) First pari passu charge on all present and future movable and immovable Property, plant and equipment of the Company situated at A/22/2/3, A/22/2/3(P), A A-22/2/2, Mahad Industrial Area, Dist Raigad Maharashtra.

b) First charge on all present and future movable and immovable Property, plant and equipment of the Company situated at B/2/2, B-3/1/1 MIDC B-3/1/2 Mahad Industrial Area, District. Raigad.

c) First pari passu charge on all movable fixed assets of borrower at 795/1, Chimangaon, taluka Koregaon, Dist. Satara, Maharashtra.

d) Second pari passu charge on all present and future current assets of borrower.

C) Vehicle loan:

Vehicle loan is secured against the same vehicle for which loan is taken. During the current year, the same is fully repaid.

D) Government grant:

There are multiple interest free sales tax loans which are repayable in five installments from their due date. The Company has outstanding of ? 3.24 million as at March 31, 2023 (March 31, 2022: ? 6.48 million). The first installment date was May 2009 and last terminal date is May 2023.

G) Registration of charges or satisfaction with Registrar of Companies

In current year, all the charges as per the sanction are duly registered with Registrar of Companies as at March 31, 2023 in favour of the lenders for facilities availed by the Company except for charges related to term debt availed during the year from HDFC and AXIS Bank for ? 2,750 million (Actual drawdown loan amount is ? 1,400 million) for which mortgage is pending to be created as at balance sheet date.

In 2021-22, all the charges as per the sanction are duly registered with Registrar of Companies as at March 31, 2022 in favour of the lenders for facilities availed by the Company except for charges related to working capital enhancement by ? 2,915.60 million for which charge was pending creation as at balance sheet date, however the same was created on April 22, 2022.

H) Disclosure of repayments

During the previous year, the Company has delayed in repayments of EMI amounting to ? 0.34 million in case of vehicle loans. The delays ranges between 1 to 12 days. There are no continuing default as at balance sheet date.

During the current year, there are no defaults in repayment of principal and interest to the lenders.

I) The terms loans taken during the year have been utilized for the purpose.

(b) Disclosures as required by Indian Accounting Standard (Ind AS) 19 Employee Benefits

The Company has carried out the actuarial valuation of gratuity and leave encashment liability under actuarial principle, in accordance with Ind AS 19 - Employee Benefits.

Gratuity is a defined benefit plan under which employees who have completed five years or more of service are entitled to gratuity on departure from employment at an amount equivalent to 15 days salary (based on last salary drawn) for each completed year of service restricted to ? 2.00 million (March 31, 2022: ? 2.00 million) The Company’s gratuity liability is entirely funded and leave encashment is non-funded.

The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields/rates available on applicable bonds as on the current valuation date.

The salary growth rate indicated above is the Company’s best estimate of an increase in salary of the employees in future years, determined considering the general trend in inflation, seniority, promotions, past experience and other relevant factors such as demand and supply in employment market, etc.

Description of risk exposures

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

(i) Interest rate risk:

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

(ii) Liquidity risk:

This is the risk that the Company is not able to meet the short-term gratuity pay-outs. This may arise due to non availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

(iii) Salary escalation risk:

The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

(iv) Demographic risk:

The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

(v) Regulatory risk:

Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time).

(vi) Asset liability mismatching or market risk:

The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

(vii) Investment risk:

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment"

a) Borrowings from banks or Financial institutions on the basis of security of current assets:

The Company has borrowings from banks or Financial institutions on the basis of security of current assets.

Quarterly returns or Statements of current assets filed by the Company with banks or Financial institutions for the year 2022-2023 are in agreement with the books of accounts, however there was variation in the year 2021-22 which is detailed in Statement A.

b) Utilisation of Borrowings taken from Bank and Financial Institution:

The Company has taken fresh loans during the year and have used the borrowings taken from banks and Financial institutions for the purpose for which it was taken.

c) Commercial Papers (Unsecured)

During the year, the Company has issued its first tranche of Commercial Papers (“CPs”) of ? 500 million on February 7, 2023.

(iv) Other tax proceedings -

During the previous year, the Senior Intelligence Officer, Directorate of Revenue Intelligence (“DRI”) of the Bangalore Zonal Unit (“SIO”) conducted a search at the Acetyl Intermediates (“AI”) Manufacturing Facility on February 11, 2021 (the “Search”) on the grounds that the SIO had reason to believe that the Company was availing a lower rate of basic customs duty at the rate of 2.5% for importing denatured ethyl alcohol in terms of the forth in Entry number 107 of the Customs Notification No. 50/2017 (“Notification”) and claimed that the Company was liable to pay 5% as basic customs duty instead while importing denatured ethyl alcohol. During the course of the search the SIO made enquiries with certain officials of the Company as well as recovered certain documents relating to the import, usage and accounting of denatured ethyl alcohol. Pursuant to the Search, the Company, has paid an amount of f 35.00 million under protest. Prior to the Search, the Company on January 24, 2021 had also filed a writ petition before the High Court of Bombay challenging the constitutionality of the use of the terms “excisable goods”

as set forth in Entry 107 of the Notification and the requirements mandating importers of denatured ethyl alcohol to submit a provisional duty bond for availing an exemption under Entry 107 of the Notification. The matter is currently pending. Accordingly, the total amount is neither quantifiable nor demanded.

26. DISCLOSURE IN ACCORDANCE WITH IND AS - 108 “OPERATING SEGMENTS”, OF THE COMPANIES (INDIAN ACCOUNTING STANDARDS) RULES, 2015

The Company is engaged in chemicals business and is of the view that it is a single business segment in accordance with Ind AS 108 ‘Operating Segments’ notified pursuant to Companies (Accounting Standards) Rules, 2015. There is no single customer or customer group which constitutes more than 10% of the total revenue of the Company.

31. SHARE OPTION OUTSTANDING

A Employee Stock Option Plan 2020 (the Plan):

Pursuant to the resolutions passed by the Board on October 30, 2020 and by the shareholders on November 24, 2020, the Company has approved the Laxmi - Employee Stock Option Plan 2020 (“ESOP-2020”) for issue of employee stock options (“ESOPs”) or thank you grants or restricted stock units (“RSUs”) to eligible employees up to 67,50,000 options, which may result in issue of not more than 67,50,000 Equity Shares. The primary objective of ESOP-2020 is to reward the employees and to retain and motivate the employees of the Company and its Subsidiaries, as the case may be, by way of rewarding their high performance and motivate them to contribute to the overall corporate growth and profitability.

The Nomination and Remuneration Committee had on January 27, 2021 granted 56,90,467 options (comprising of 42,45,540 employee stock options; 11,43,263 RSUs and 3,01,664 thank you grants) to eligible employees pursuant to the ESOP-2020. As of the date, no Equity Shares have been issued pursuant to the ESOP-2020. This plan is administered by the Nomination and Remuneration Committee of the Board.

The eligibility of the Employees will be based on designation, period of service, performance linked parameters such as work performance and such other criteria as may be determined by the Nomination and Remuneration Committee at its sole discretion, from time to time.

Options granted under Plan shall vest not earlier than 1 (One) year and not later than maximum Vesting Period of 3 (three) years from the date of Grant.

During the year, additional 2,76,855 Equity shares were granted under Laxmi - Employee Stock Option Plan 2020 (“ESOP-2020”).

The management assessed that fair value of cash and short-term deposits, trade receivables, trade payables, book overdrafts and other current Financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

33. FAIR VALUE HIERARCHY

This section explains the judgments and estimates made in determining the fair values of the Financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the Financial Statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its Financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

34. FINANCIAL RISK MANAGEMENT

The Company is exposed to various Financial risks arising from its underlying operations and Financial activities. The Company is primarily exposed to market risk (i.e. interest rate and foreign currency risk), credit risk and liquidity risk. The Company’s Corporate Treasury function plays the role of monitoring Financial risk arising from business operations and financing activities.

Financial risk management, which includes foreign currency risk, interest rate risk, credit and liquidity risk are very closely monitored by the senior management, the Finance Committee and the Board of Directors. The Company has a Forex Risk Management policy under which all the forex hedging operations are done. The Company’s policies and guidelines also cover

areas such as cash management, investment of excess funds and the raising of short and long term debt. Compliance with the policies and guidelines is managed by the Corporate Treasury function. The objective of Financial risk management is to manage and control Financial risk exposures within acceptable parameters, while optimising the return.

The Company manages its market risk exposures by using specific type of Financial instruments duly approved by the Board of Directors as and when deemed appropriate. The Company reviews and approves policies for managing each of the above risk.

1) Market risk

Market risk is the risk arising out of the fluctuations in fair value of future cash flows of a Financial instrument because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk includes loans and borrowings, deposits, investments and derivative Financial instruments. The Company enters into the derivative contracts as approved by the Board to manage its exposure to interest rate risk and foreign currency risk, from time to time.

A) Foreign currency risk

Foreign currency risk also known as Exchange Currency Risk is the risk arising out of fluctuation in the fair value or future cash flows of an exposure because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable to Company’s operating activities and financing activities. In the operating activities, the Company’s exchange rate risk primarily arises when revenue/costs are generated in a currency that is different from the reporting currency (transaction risk). The Company manages the exposure based on a duly approved policy by the Board, which is reviewed by Board of Directors on periodic basis. This foreign currency risk exposure of the Company is mainly in U.S. Dollar (USD) and Euro (EUR).

Foreign exchange derivative contracts

The Company enters into derivative contracts with an intention to hedge its foreign exchange price risk and interest risk. Derivative contracts which are linked to the underlying transactions are recognised in accordance with the contract terms. Such derivative Financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as Financial assets when the fair value is positive and as Financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit & Loss.

B) Interest rate risk management

Interest rate risk arises from the movements in interest rates which could have effects on the Company’s net income or Financial position. Changes in interest rates may cause variations in interest income and expenses resulting from interest-bearing assets and liabilities. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowing obligations with floating interest rates.

C) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a Financial instrument or customer contract, leading to a Financial loss. the Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and Financial institutions, foreign exchange transactions and other Financial instruments.

Trade receivables are typically unsecured and are derived from revenue earned from customer. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account a continuing credit evaluation of the Company customers’ Financial condition; ageing of trade accounts receivable and the Company’s historical loss experience.

Credit risk from balances with banks and Financial institutions is managed by the Company’s Corporate Treasury function in accordance with the Company’s policy. Investments of surplus funds are made only with counter parties who meet the parameters specified in Investment Policy of the Company. The investment policy is reviewed by the Company’s Board of Directors on periodic basis and if required, the same may be updated during the year. The investment policy specifies the limits of investment in various categories of products so as the minimize the concentration of risks and therefore mitigate Financial loss due to counter party’s potential failure.

D) Liquidity risk management

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its Financial liabilities. The Company’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the years ended March 31, 2023 and March 31, 2022. Cash flow from operating activities provides the funds to service the Financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable liquid debt investments with appropriate maturities to optimise the returns on investments while ensuring sufficient liquidity to meet its liabilities.

36. The Board of Directors at their meeting held on May 12, 2023 has recommended dividend of ? 0.50 per share (25% of FV) on the outstanding equity shares of nominal value of ? 2/- each as on record date, subject to shareholder approval at the ensuing Annual General Meeting.

37. RELATIONSHIP WITH STRUCK OFF COMPANIES

The information about transaction with struck off Companies (defined under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956) has been determined to the extent such parties have been identified on the basis of the information available with the Company and the same is relied upon by the auditors.

38. COMPLIANCE WITH APPROVED SCHEME(S) OF ARRANGEMENTS

The Hon’ble National Company Law Tribunal (‘NCLT’), Mumbai Bench, vide hearing convened on August 25, 2022, has sanctioned the Scheme of Merger by Absorption of Acetyls Holdings Private Limited (AHPL) and Yellowstone Chemicals Private Limited (YCPL) (“Transferor Companies”)

with the Company under Section 230 to Section 232 of the Companies Act, 2013 and thereby the books of accounts of AHPL and YCPL has been merged with the Company w.e.f. the Appointed Date of October 2, 2021. Consequently, the Standalone Financials as on March 31, 2022 has been restated to give effect of the merger. Refer note 5(K).

39. UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

i. The Company has advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary.

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries), the details of which is tabulated hereunder:

(i) For FY 2022-23:

a) There are no transaction to be reported during the year.

b) Declaration: For all the transaction reported in (a) and (b) above relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been complied by the Company and the transactions are not violative of the Prevention of Money-Laundering act, 2002 (15 of 2003).

ii The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

40. Analytical Ratios as per requirements of Schedule III are given in Statement C

41. Figures of the previous period have been regrouped wherever necessary including to conform to current period’s classification.

42. The balance sheet, Statement of profit and loss, cash flow Statement, Statement of changes in equity, Statement of significant accounting policies and the other explanatory notes forms an integral part of the Financial Statements of the Company for the year ended March 31, 2023.