W. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

Contingent Liabilities are disclosed where there is possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

A contingent asset is disclosed and not recognised, where an inflow of economic benefits is probable.

X. Earnings per share

The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

Y. Rounding of amounts

All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

NOTE 2 - CRITICAL ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements. In addition, this note also explains where there have been actual adjustments this year as a result of changes to previous estimates.

(a) Estimated fair value of unlisted securities:

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. This involves fair valuation based on comparable companies multiple inputs, assessment of maintainable EBIDTA (Earnings before interest, depreciation, tax and amortisation) and other relevant valuation parameters. Estimated fair values may vary from the actual price that would be achieved in an arms length transaction at the reporting date. (Refer Note 41)

(b) Impairment of Goodwill and Property, plant and equipment:

Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired. The goodwill impairment test is performed at the level of the cash generating unit or groups of cash generating units (‘CGU’) which are benefiting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes.

The Company periodically assesses the carrying amount of its property, plant and equipment to determine whether there is an indication that those assets have suffered impairment loss. In making such assessments, the Company considers both internal and external sources of information to determine whether there is an indicator of impairment and, accordingly, whether the recoverable amount of the individual asset or CGU needs to be estimated.

An impairment loss is recognised if the recoverable amount is lower than the carrying value. The recoverable amount is determined based on higher of value-in-use and fair value less cost to sell.

Key assumptions and judgements involved in estimating the recoverable value are future sales, input costs, weighted average cost of capital (discount rate) and terminal growth rate. Cash flow projection takes into account past experience and represents management’s best estimate about future developments. (Refer Note 3 and Note 6)

(c) Accounting for Associate Company :

Refer Note 8 on accounting for Investment in First Energy 7 Private Limited

(iv) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

• Investments in quoted equity instruments are valued using the closing price at National Stock Exchange (NSE) at the reporting period.

• the fair value of forward foreign exchange contracts is determined using forward exchange rates as at the balance sheet date, prevailing with the Authorised Dealers dealing in foreign exchange.

• the Net Assets Value (‘NAV’) for valuation of mutual fund investment represents the price at which the issuer will issue further units and will redeem such units of mutual fund to and from the investors at the reporting period.

• Fair value of investment in unquoted equity shares is arrived based on Comparable Company Market ('COM') Multiples Method by applying EV/EBITDA multiple of comparable listed companies on maintainable operating EBITDA of the investee company. The same is further adjusted, as appropriate, for surplus assets (cash and cash equivalent, investments, interest accrued on deposits), debts, deferred tax assets/ liabilities and contingent liabilities.

(v) Increase in EV / EBITDA multiple by 5% would increase fair value of unquoted equity shares by INR 1,512.36 lakhs (March 31,2023: INR 1,134.80 lakhs).

Decrease in EV / EBITDA multiple by 5% would have equal and opposite impact on fair value of unquoted equity shares.

NOTE 42 - FINANCIAL RISK MANAGEMENT

I n the course of its business, the Company is exposed to a number of financial risks: credit risk, liquidity risk and market risk. This note presents the Company’s objectives, policies and processes for managing its financial risk. The key risks and mitigating actions are also placed before the Board of Directors of the Company. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company manages the risk through the finance department that ensures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The activities are designed to:

- protect the Company’s financial results and position from financial risks;

- maintain market risks within acceptable parameters, while optimising returns; and

- protect the Company’s financial investments, while maximising returns.

The note explains the Company’s exposure to financial risks and how these risks could affect the Company’s future financial performance.

(A) Credit Risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed.

Credit risk arises from cash and cash equivalents, balances with banks and financial institutions, contractual cash flows of debt investments, favourable derivative financial instruments, credit exposures to customers and other outstanding receivables such as security deposits, loans to employees etc.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information.

For banks and financial institutions, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit ratings assigned by the credit rating agencies. The Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, past experience, analysis of historical bad debts, ageing of financial assets and other factors. Individual risk limits are set and periodically reviewed on the basis of such information. For certain trade receivables, the Company also obtains security in the form of guarantees, deed of undertaking or letters of credit which can be called upon if the counterparty is in default under the terms of the agreement.

The Company has assessed its loans and other financials assets including security deposits and other receivables as high quality, negligible credit risk. The Company periodically monitors the recoverability and credit risks of its other financials assets. The Company evaluates 12 months expected credit losses for all the financial assets (other than trade receivable and contract assets) for which credit risk has not increased. In case credit risk has increased significantly, the Company considers lifetime expected credit losses for the purpose of impairment provisioning.

The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix by taking into consideration payment profiles of chemical sales over a period of 24 months and Environment and Biotech sales over a period of 36 months before the reporting date and the corresponding historical credit loss experience within this period. The historical loss rates are adjusted to reflect the current and forward looking information on macro economic factors affecting the ability of customers to settle receivables. The expected credit loss is based on aging of days, the receivables due and the expected credit loss rate. In addition, in case of event driven situation such as litigations, disputes, change in customer’s credit risk history, specific provision are made after evaluating the relevant facts and expected recovery. The provision matrix at the end of the reporting period is as follows:

NOTE 43 - CAPITAL MANAGEMENT (a) Risk Managements

The Company’s objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. For achieving this, the requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Apart from internal accrual, sourcing of capital is done through judicious combination of equity and borrowing. Debt (total borrowings lease liabilities) to equity ratio is used to monitor capital. No changes were

(iii) Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company’s operations. All extension options held are exercisable by the Company and termination rights are held by the Company and lessor both as per the respective lease agreements.

NOTE 54 -

On April 1, 2023, the Company had given a notice to Ahmedabad Municipal Corporation for closure of its Municipal Solid Waste (MSW) processing plant, effective from October 1, 2023. Accordingly, the Company had recognized impairment loss of Rs. 65.23 lakhs on property, plant and equipment and inventory write off of Rs. 60.57 lakhs pertaining to its Environment and Biotech segment for the quarter and year ended March 31,2023. Pursuant to the said notice, the operations were discontinued and the site was handed over to the concerned authority.

NOTE 55 - OTHER REGULATORY INFORMATION REQUIRED BY SCHEDULE III

(i) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formally the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder.

(ii) Borrowing secured against assets

The Company has sanctioned borrowing facility from banks on the basis of security of current and non current assets. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts. During the year, the Company did not have any borrowings from the financial institutions on the basis of security of current assets.

(vii) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(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) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

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

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

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

(x) Valuation of property, plant and equipment, right of use assets, intangible asset and investment property;

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.

(xi) Utilisation of borrowings availed from banks and financial institutions;

The borrowings obtained by the Company from banks and financial institutions, have been applied for the purpose for which such loans were taken.

(xii) Registration of charges or satisfaction with Registrar of Companies;

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond statutory period.

(xiii) Title deeds of immovable properties not held in name of the Company;

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 3 - Property, plant and equipment, Note 4 - Right-of-use assets and Note 5 - investment property are held in the name of the Company.

As per our report of even date. For and on behalf of the Board of Directors of Excel Industries Limited

For Price Waterhouse Chartered Accountants LLP ASHWIN C. SHROFF RAVI A. SHROFF HRISHIT A. SHROFF

Firm Registration No.: 012754N/N500016 Executive Chairman Managing Director Executive Director

DIN: 00019952 DIN: 00033505 DIN: 00033693

BHAVESH GADA

Partner N.R. KANNAN DEVENDRA P DOSI SURENDRA K. SINGHVI

Membership No.: 117592 Chief Executive Officer Chief Financial Officer Company Secretary

Place : Mumbai Place : Mumbai

Date: May 24, 2024 Date: May 24, 2024