Rights, preferences and restrictions attached to equity share

The Company has only one class of equity share having a par value of f 5 per share. Each equity shareholder is entitled for one vote per share. The Company declares and pays dividend in Indian rupees (f). The final dividend proposed by the Board of Director is subject to the approval of the shareholder in the ensuing annual general meeting.

In the event of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholder.

i) Nature and purpose of other reserves Capital reserve

Capital reserve was created under the previous GAAP out of the profit earned from a specific transaction of capital nature. Capital reserve is not available for the distribution to the shareholders.

Securities premium

Securities premium is used to record the premium on issue of shares. The reserve will be utilised in accordance with provisions of the Companies Act, 2013.

Capital redemption reserve

The same has been created in accordance with provision of Companies Act, 2013 against redemption of preference shares. General reserve

The Company is required to create a general reserve out of the profits when the Company declares dividend to shareholders. Retained earnings

Retained earnings represents surplus in the Statement of Profit and Loss.

Share options outstanding account

The Company has allotted equity shares to certain employees under an employee share purchase scheme. The share options outstanding account is used to recognise the value of equity settled share based payments provided to such employees as part of their remuneration. Refer note 43 for further details of the scheme.

Equity component of redeemable financial instrument

The same has been created in accordance with Indian accounting standard (Ind AS) 109 against the Redeemable financial instrument (foreign currency loan) and it will be transfer to Retained earning when loan fully repaid.

I. Term loans

a) From Canara Bank of f 301.71 lacs (31 March 2022 : f 725.09 lacs) as capex loan for augmentation of capital expenditure (modification, de-bottlenecking, modernization, cost reduction and maintenance capex). The term loan bearing floating interest at the MCLR plus 0.65% per annum. The term loan is repayable in 60 equal monthly instalments starting from September 2019.#

b) From Karnataka Bank Limited of f 1,366.09 lacs (31 March 2022 : f 1,992.37 lacs) as capex loan for capital expenditure (purchase of plant and equipments). The term loan bearing floating interest at the MCLR plus 0.50% per annum. The term loan is repayable in 60 unequal monthly instalments starting from October 2020.##

c) From Tata Capital Financial Services Limited of f 122.86 lacs (31 March 2022 : f 546.66 lacs) as corporate loan for augmentation of working capital bearing floating interest at the LTLR minus 9.50% per annum. The corporate loan is repayable in 16 unequal quarterly instalments starting from Sep 2019.#

d) From Tata Capital Financial Services Limited of f 1,220.01 lacs (31 March 2022 : f 1,773.52 lacs) has been sanctioned for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited). The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon andfirst and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus 9.10% per annum. The loan is repayable in 54 equal monthly instalments starting from Dec 2020.

e) From Tata Capital Financial Services Limited of f 2,614.84 lacs (31 March 2022 : f NIL) has been sanctioned for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited), general corporate and capex. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 54 equal monthly instalments starting fromJune 2022. ##

f) From Tata Capital Financial Services Limited of f 877.24 lacs (31 March 2022 : f NIL) has been sanctioned for infusion of funds in Subsidiary Company of borrower (Ester Filmtech Limited), general corporate and capex. The term loan is secured by equitable mortgage by way of deposit of title deeds of land and corporate office building constructed thereupon in Gurgaon andfirst and exclusive charge over the hypothecation of certain plant and equipments installed at factory premises at Uttarakhand and further securedby irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania. The term loan bearing floating interest at the LTLR minus 11.25% per annum. The loan is repayable in 84 equal monthly instalments starting from June 2022.

g) From Bajaj FinanceLimited of f 2,386.49 lacs (31 March 2022 : f 2,979.01 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest linked to BFL IRR at the rate of 8.00% per annum. The term loan is repayable in 60 equal monthly instalments starting from April 2022 .##

Term loans (cont’d)

h) From Bajaj Finance Limited of f 2,984.7 lacs (31 March 2022 : f 1,978.19 lacs) as loan for general corporate and capex purpose. The term loan bearing floating interest linked to BFL IRR at the rate of 7.35% per annum. The term loan is repayable in 20 equal quarterly instalments starting from May 2023 .##

i) From IDFC Limited of f 315.96 lacs (31 March 2022 : f 944.99 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 1,50% per annum. The term loan is repayable in 12 equal quarterly instalments starting from Dec 2020.#

j) From IDFC Limited of f 860.45 lacs (31 March 2022 : f 1,501.51 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 0.30% per annum. The term loan is repayable in 37 equal monthly instalments starting July 2021.#

k) From Axis Finance Limited of f 2,784.82 lacs (31 March 2022 : f 3,373.75 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus .85% per annum. The term loan is repayable in 18 unequal quarterly instalments starting March 2022.##

l) From QNB Bank of f 3,983.25 lacs (31 March 2022 : f 3,973.91 lacs) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the MCLR plus 1.80% per annum. The term loan is repayable in 42 equal monthly instalments starting April 2023.#

m) From Shinhan Bank of f 3990.16 lacs (31 March 2022 : f NIL) as capex loan for capital expenditure incurred by the Company. The term loan bearing floating interest at the repo rate plus 2.10% per annum. The term loan is repayable in 18 equal quarterly instalments starting Dec 2023.##

# Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.O. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited & Vehicles and second Pari passu charge on current assets and further secured by irrevocable guarantee of its holding company and personal guarantee of Mr. Arvind Singhania.

## Above term loans are secured by first pari passu charge on fixed assets of the Company (both present and future) including factory land and building at Pilibhit Road, Sohan Nagar, P.o. Charubeta, Khatima-262308, Distt Udham Singh Nagar, Uttarakhand with other lenders, except fixed assets that are exclusively charged to Tata Capital Financial Services Limited and second Pari passu charge on current assets and further secured by irrevocablepersonal guarantee of Mr. Arvind Singhania.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the loans. Vehicle loans bearing interest rates ranging from 7.25% per annum to 9.40% per annum. These loans are repayable in monthly instalments till May 2027.

Working capital loans, bills discounting, acceptances and buyer’s credit for raw materials : These loans are secured by first charge by way of hypothecation of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and further secured by irrevocable guarantees of its holding Company and personal guarantee of Mr. Arvind Singhania. Working capital, bill discounting facilities, acceptances and buyer’s credit for raw materials are further secured by way of second charge in respect of immovable properties and movable fixed assets except fixed assets that are exclusively charged to Tata Capital Financial Services Limited.

The working capital loans from banks bear floating interest rate at MCLR plus ranging from 0.65% per annum to 1.20% per annum. The bill discounting from banks bear floating interest rate ranging from 7.55% per annum to 8.60% per annum.

The quarterly returns/statements of current assets filed by the Company with banks or financial institutions in relation to secured borrowings / sanctioned loans, wherever applicable, are in agreement with the books of accounts

i) Corporate social responsibility expenses

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are promoting health care, promoting education, rural development projects and environment sustainability. A CSR committee has been formed by the company as per the Act. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

33. Fair value disclosures

(i) Fair value hierarchy

Financial assets measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: unobservable inputs for the asset or liability.

(ii) Valuation technique used to determine fair value

A. Specific valuation techniques used to value mutual funds include - the use of net asset value for mutual funds on the basis of the statement received from investee party.

B. Derivative asset/ liability is measured using forward contract exchange rates at the balance sheet rate as confirmed from banks/ financial institutions.

The above disclosures are presented for non-current financial assets (excluding bank deposits) and non-current financial liabilities. Carrying value of current financial assets and current financial liabilities (trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, trade payables, current borrowings and other current financial liabilities) represents the best estimate of fair value.

*Long term borrowing facilities availed by the Company are variable rate facilities which are subject to changes in underlying interest rate indices. Further, the credit spread on these facilities are subject to change with changes in Company’s creditworthiness. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, investments, trade receivables and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period (including extension). Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(C) Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with floating interest rates.

(ii) Foreign exchange risk

Foreign exchange risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating, investing and financing activities. The Investment and Borrowing Committee evaluates foreign exchange rate exposure arising from foreign currency transactions on periodic basis and follows appropriate risk management policies.

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency.

Sensitivity

The following table illustrates the sensitivity of profit in regards to the Company’s financial assets and financial liabilities and the USD/INR exchange rate, EUR/INR exchange rate and GBP/INR exchange rate ‘all other things being equal’. It assumes a /- 4.92% change of the INR/USD exchange rate for the year ended at 31st March, 2023 (2022: 4.65%). A /- 8.75% change is considered for the INR/EUR exchange rate (2022: 5.80%). A /- 11.60% change is considered for the INR/GBP exchange rate (2022: 6.01%). All of these percentages have been determined based on the average market volatility in exchange rates in the previous 12 months.

(iii) Price risk

The Company’s exposure to price risk arises from investments held and classified as FVTPL. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

35. Segment reporting

The Company operates in three segments manufacturing and sale of polyester film ,engineering plastics and speciality polymer. The Company has chosen business segments considering the dominant source of nature of risks and returns, internal organisation, management structure and the manner chief operating decision maker (CODM) review the financial performance of the business for allocating the economic resources. A brief description of the reportable segment is as follows:

Polyester chips and film: Polyester chips and films that are used in primarily flexible packaging and other industrial application. Polyester film is known for high tensile strength, chemical and dimensional stability, transparency, reflective, gas and aroma barrier properties and electrical insulation. PET chips is the main raw material used to manufacture the film.

Engineering plastics-Discontinued : Engineering plastics are group of plastic materials that exhibit superior mechanical and thermal properties over the more commonly used commodity plastics. Engineering plastics are equipped with certain electrical properties which enable it to be used in specific industries such as automotive, telecommunication, electrical, electronics and lighting, consumer durable etc.

Speciality Polymer: Specialty Polymers are Polymers that are high performance material catering to the global needs of the industries / applications such as carpets, textiles, food and beverages, consumer electronics, industrial etc. which cannot be met by commodity PET grades.

Information about major customer

During the year ended 31 March 2023 revenue of approximately 6.96% (31 March 2022: 10.80%) was derived from a single external customer in the polyester chips and film business, approximately 16.32% in 31 March 2023 (31 March 2022: 13.47%) was derived from a single external customer in the engineering plastics business (discontinued operations) and approximately 66.42% in 31 March 2023 (31 March 2022: 41.30%) was derived from a single external customer in the speciality polymer business.

Non-current assets

Non-current assets of the Company (property, plant and equipment, capital work-in-progress, intangible assets) are held in India.

36. Capital management

The Company’s objectives when managing capital are to:

- To ensure Company’s ability to continue as a going concern, and

- To provide adequate return to shareholders

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company’s leased asset classes primarily consist of leases for land, certain equipments and building, including warehouses and related facilities. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security.

For some of the leases, the lessee may terminate the lease by giving 3 months notice period to lessor, subject to other terms and conditions. At the end of the tenor under certain leases, lessee can avail to buy the asset at the agreed value as per buyback agreement between the lessor and lessee.

Right of use asset as at 31 March 2023 amounting to f 57.61 lacs (31 March 2022 amounting to f 835.36 lacs) are for the leases of equipments and lease of land.

A Lease payments not recognised as a liability

The Company has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right of use the underlying asset recognised in the standalone financial statement.

The expense relating to payments not included in the measurement of the lease liability for short term leases is f99.08 lacs (31 March 2022 amounting to f 127.01 lacs).

B Total cash outflow for leases for the year ended 31 March 2023 was f 48.26 lacs (year ended 31 March 22 was f 120.24 lacs).

40. Employee benefits obligations I Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of continuous service gets a gratuity on departure at fifteen day salary (last drawn salary) for each completed year of service in terms of the provisions of the Payments of Gratuity Act, 1972. The Company provides for liability in its books of accounts based on actuarial valuation.

The following table summaries the components of net benefit expense recognised in statement of profit and loss and the amount recognised in the balance sheet for gratuity benefit:

II Provident fund

Provident fund for certain eligible employees is managed by the Company through trust “Ester Industries Limited Employee’s Provident Trust” in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate as notified by the Provident Fund authority. The contribution by the employer and employee together with the interest thereon are payable to the employee at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee. In this regard, actuarial valuation as at 31 March 2023 was carried out by actuary to find out value of projected defined benefit obligation arising due to interest rate guarantee by the Company towards provident fund.

e. Pursuant to requirements of Ind AS 105, the amounts in the statement of profit and loss (and notes 25,28 and 30) for the current year and the previous year have been presented for continuing operations, as if the operations had been discontinued from the start of the previous year, as applicable, unless otherwise stated.

(e) In the normal course of business, the payment terms given to domestic customers ranges from 0 to 60 days and for export customers, it ranges from 0 to 105 days.

43. Share based payment

The Nomination and Remuneration Committee of the Company had at its meeting held on 01 April 2021, approved grant of 2,48,179 (face value of f 5/- per share) to the eligible employees of the Company under the of Ester Employee Stock Option Plan-2021, at an exercise price of f 105 per option (being 10% less that the closing price at NSE on 31 March 2021 i.e. immediately preceding the grant date), each option being convertible in to one Equity Share of the Company upon vesting subject to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the terms and conditions of the Ester Employee Stock option Plan-2021.

The terms and conditions of the grant as per the ester employee Stock option Plan-2021 are as under:

A. Vesting period

Vesting of the options shall take place as per the following schedule:

- 10% of options shall vest at the end of a period of 1 (one) year from date of grant

- 20% of options shall vest at the end of a period of 2 (two) years from date of grant

- 30% of options shall vest at the end of a period of 3 (three) years from date of grant

- 40% of options shall vest at the end of a period of 4 (four) years from date of grant

Risk free return has been considered as Zero Coupon Bond Yield (continuous compound) for a term equal to the expected option life of the ESOP’s, available on The Clearing Corporation of India Limited’s (CCIL) website. Expected volatility calculation is based on historical daily closing stock prices of competitors using standard deviation of daily change in stock price. The minimum life of the stock option is the minimum period before which the options cannot be exercised and the maximum life is the period after which options cannot be exercised. The expected life has been considered based on average of maximum life and minimum life and may not necessarily be indicative of exercise patterns that may occur.

(e) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(f) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies (RoC) beyond the statutory period.

(g) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.

(h) No funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered

or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(j) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(k) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both

during the current or previous year.

47. During the current year, a fraud of f 65.00 lacs has happened on the Company where on the basis of WhatsApp messages from a mobile phone that did not belong to CEO of the Company, the person in-charge of approving / authorising payments instructed one of the accounts team person to make on-line payments through Bank of Baroda. Total of such payments amounted to f 65.00 lacs. The Company has filed a First Information Report (FIR) on 25 August 2022 regarding this matter. Further, Company has recorded this amount as expense in statement of profit and loss.

48. The previous year numbers have been regrouped/ reclassified wherever necessary to conform to current year presentation. The impact of such reclassification/regrouping is not material to the standalone financial statements.

49. No subsequent event occurred post balance sheet date which requires adjustment in the standalone financial statements for the year ended 31 March 2023.