Notes to Accounts of Laxmi Organic Industries Ltd.

Mar 31, 2025

recognised for future operating losses.
Provisions are reviewed at each balance
sheet date and adjusted to reflect the current
best estimates.

B. Contingent liabilities

Contingent liabilities are disclosed in respect
of possible obligations that arise from past
events, whose existence would be confirmed
by the occurrence or non-occurrence of
one or more uncertain future events not
wholly within the control of the Company.
A contingent liability also arises, in rare
cases, where a liability cannot be recognised
because it cannot be measured reliably.

C. Contingent assets

Contingent asset is not recognised unless it
becomes virtually certain that an inflow of
economic benefits will arise. When an inflow
of economic benefits is probable, contingent
assets are disclosed in the financial
statements.

Contingent liabilities and contingent assets
are reviewed at each balance sheet date.

k) Employee share - based payment plans (''ESOP''):

j) Provisions, contingent liabilities and contingent
assets:

A. Provisions

The Company recognises a provision when: it
has a present legal or constructive obligation
as a result of past events, it is likely that
an outflow of resources will be required to
settle the obligation, and the amount has
been reliably estimated. Provisions are not

The Company recognises compensation expense
relating to share based payments in accordance
with Ind AS 102-Share based Payment. For
share entitlement granted by the Company to its
employees, the estimated fair value as determined
on the date of grant, is charged to the Statement
of Profit and Loss on a straight-line basis over the
vesting period and assessment of performance
conditions if any, with a corresponding increase
in equity. The increase in equity recognised in
connection with share-based payment transaction
is presented as a separate component in equity
under "Share based payment reserve". The
amount recognised as an expense is adjusted to
reflect the actual number of stock options that
vest. The cumulative accumulation in the Share
based payment reserve in respect of options
exercised are transferred to Securities Premium.

l) Fair value measurement:

The Company measures financial instruments
such as, derivatives at fair value at each balance
sheet date. Fair value is the price that would be

received to sell an asset or paid to transfer a
liability in an orderly transaction between market
participants at the measurement date. The fair
value measurement is based on the presumption
that the transaction to sell the asset or transfer
the liability takes place either:

• In the principal market for the asset or
liability, or

• In the absence of a principal market, in the
most advantageous market for the asset or
liability

The principal or the most advantageous market
must be accessible to the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.

A fair value measurement of a non-fiinancial asset
takes into account a market participant''s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest
level input that is significant to the fair value
measurement as a whole:

• Level 1 - Quoted (unadjusted) market prices
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 or
indirectly.

• Level 3 - inputs that are unobservable for the
asset or liability.

For assets and liabilities that are recognised in the
Financial Statements at fair value on a recurring
basis, the Company determines whether transfers

have occurred between levels in the hierarchy by
re-assessing categorisation at the end of each
reporting period and discloses the same.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above.

m) Financial instruments

A. Financial assets:

i. Initial recognition and measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or
loss, transaction costs that are attributable
to the acquisition of the financial asset.

Financial assets are classified, at initial
recognition, as financial assets measured at
fair value or as financial assets measured at
amortised cost. However, trade receivables
that do not contain a significant financing
component are measured at transaction
price.

ii. Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in two broad
categories:

• Financial assets at fair value

• Financial assets at amortised cost

Where assets are measured at fair value,
gains and losses are either recognised
entirely in the statement of profit and loss
(i.e. fair value through profit or loss), or
recognised in other comprehensive income
(i.e. fair value through other comprehensive
income).

A financial asset that meets the following
two conditions is measured at amortised
cost (net of any write down for impairment)
unless the asset is designated at fair value
through profit or loss under the fair value
option.

• Business model test: The objective
of the Company''s business model is
to hold the financial asset to collect
the contractual cash flows (rather

than to sell the instrument prior to its
contractual maturity to realise its fair
value changes).

• Cash flow characteristics test: The
contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.

A financial asset that meets the
following two conditions is measured at
Fair Value through other comprehensive
income unless the asset is designated
at fair value through profit or loss under
the fair value option.

• Business model test: The financial
asset is held within a business model
whose objective is achieved by both
collecting contractual cash flows and
selling financial assets.

• Cash flow characteristics test: The
contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.

Even if an instrument meets the two
requirements to be measured at
amortised cost or fair value through other
comprehensive income, a financial asset is
measured at fair value through profit or loss
if doing so eliminates or significantly reduces
a measurement or recognition inconsistency
(sometimes referred to as an ''accounting
mismatch'') that would otherwise arise from
measuring assets or liabilities or recognising
the gains and losses on them on different
bases.

All equity investments in scope of Ind AS
109 are measured at fair value. Equity
instruments, which are held for trading,
are classified as at fair value through profit
and loss ("FVTPL"). For all other equity
instruments, the Company may make an
irrevocable election to present in other
comprehensive income subsequent changes
in the fair value. The Company makes such
election on an instrument-by instrument
basis. The classification is made on initial

recognition and is irrevocable. If the Company
decides to classify an equity instrument as
at fair value through other comprehensive
income ("FVTOCI"), then all fair value changes
on the instrument, excluding dividends, are
recognised in the OCI. There is no recycling
of the amounts from OCI to statement of
profit and loss, even on sale of investment.
However, the Company may transfer the
cumulative gain or loss within equity. Equity
instruments included within the FVTPL
category are measured at fair value with
all changes recognised in the statement of
profit and loss.

All other financial assets are measured at fair
value through profit or loss.

iii. Derecognition of financial instruments

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is primarily derecognised
(i.e. removed from the Company''s balance
sheet) when:

• The rights to receive cash flows from
the asset have expired, or

• The Company has transferred its rights
to receive cash flows from the asset
or has assumed an obligation to pay
the received cash flows in full without
material delay to a third party under a
''pass-through'' arrangement and either:

a) the Company has transferred
substantially all the risks and
rewards of the asset, or

b) the Company has neither
transferred nor retained
substantially all the risks and
rewards of the asset but has
transferred control of the asset.

When the Company has
transferred its rights to receive
cash flows from an asset or
has entered into a pass-through
arrangement, it evaluates if and
to what extent it has retained the
risks and rewards of ownership.
When it has neither transferred
nor retained substantially all of
the risks and rewards of the asset,
nor transferred control of the
asset, the Company continues to
recognise the transferred asset
to the extent of the Company''s
continuing involvement. In
that case, the Company also
recognises an associated liability.
The transferred asset and the
associated liability are measured
on a basis that reflects the rights
and obligations that the Company
has retained.

Continuing involvement that
takes the form of a guarantee
over the transferred asset is
measured at the lower of the
original carrying amount of the
asset and the maximum amount
of consideration that the Company
could be required to repay.

iv. Impairment of financial assets

The Company assesses impairment based
on expected credit losses (ECL) model to the
financial assets measured at amortised cost.

Expected credit losses are measured through
a loss allowance at an amount equal to:

• the twelve months expected credit
losses (expected credit losses that
result from those default events on the
financial instrument that are possible
within twelve months after the reporting
date); or

• full lifetime expected credit losses
(expected credit losses that result from
all possible default events over the life
of the financial instrument).

• The Company follows ''simplified
approach'' for recognition of impairment
loss allowance on:

• Trade receivables or contract revenue
receivables; and

• All lease receivables

Under the simplified approach, the Company
does not track changes in credit risk. Rather,
it recognises impairment loss allowance
based on lifetime ECLs at each reporting
date, right from its initial recognition.

The Company uses a provision matrix to
determine impairment loss allowance on the
portfolio of trade receivables. The provision
matrix is based on its historically observed
default rates over the expected life of the
trade receivable and is adjusted for forward
looking estimates. At every reporting date,
the historical observed default rates are
updated and changes in the forward-looking
estimates are analysed.

For recognition of impairment loss on
other financial assets and risk exposure,
the Company determines that whether
there has been a significant increase in
the credit risk since initial recognition. If
credit risk has not increased significantly,
twelve months ECL is used to provide for
impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used.
If, in a subsequent period, credit quality of
the instrument improves such that there is
no longer a significant increase in credit risk
since initial recognition, then the Company
reverts to recognising impairment loss
allowance based on twelve months ECL.

For assessing increase in credit risk and
impairment loss, the Company combines
financial instruments on the basis of shared
credit risk characteristics with the objective
of facilitating an analysis that is designed to
enable significant increases in credit risk to
be identified on a timely basis.

B. Financial liabilities

i. Initial recognition and measurement

All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of directly
attributable transaction costs.

The Company''s financial liabilities include
trade and other payables, loans and
borrowings including bank overdrafts, and
derivative financial instruments.

ii. Subsequent measurement

The measurement of financial liabilities
depends on their classification, as described
below:

a. Financial liabilities at fair value through
profit or loss

b. Financial liabilities at fair value through
profit or loss include financial liabilities
held for trading and financial liabilities
designated upon initial recognition as at
fair value through profit or loss.

Financial liabilities are classified as
held for trading if they are incurred
for the purpose of repurchasing in the
near term. This category also includes
derivative financial instruments entered
into by the Company that are not
designated as hedging instruments in
hedge relationships as defined by IND
AS 109. Separate embedded derivatives
are also classified as held for trading
unless they are designated as effective
hedging instruments.

Gains or losses on liabilities held for
trading are recognised in the statement
of profit and loss.

Financial liabilities designated upon
initial recognition at fair value through
profit or loss are designated at the
initial date of recognition, and only if the
criteria in Ind AS 109 are satisfied.

iii. Loans and borrowings:

After initial recognition, interest-bearing loans
and borrowings are subsequently measured
at amortised cost using the effective interest
rate (EIR) method.

Gains and losses are recognised in profit or
loss when the liabilities are derecognised as
well as through the EIR amortisation process.

Amortised cost is calculated by taking
into account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation
is included as finance costs in the Statement
of Profit and Loss.

iv. Financial guarantee contracts:

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified
debtor fails to make a payment when due
in accordance with the terms of a debt
instrument. Financial guarantee contracts
are recognised initially as a liability at fair
value, adjusted for transaction costs that
are directly attributable to the issuance of
the guarantee. Subsequently, the liability is
measured at the higher of the amount of loss
allowance determined as per impairment
requirements of Ind AS 109 and the amount
recognised less cumulative amortisation.

v. Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged
or is cancelled or expires. When an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as the derecognition
of the original liability and the recognition
of a new liability. The difference in the
respective carrying amounts is recognised in
the statement of profit and loss.

vi. Offsetting of financial instruments

Financial assets and financial liabilities
are offset and the net amount is reported
in the balance sheet if there is a currently
enforceable legal right to offset the
recognised amounts and there is an intention
to settle on a net basis, to realise the assets
and settle the liabilities simultaneously.

C. Derivative financial instruments and hedge
accounting

Initial recognition and subsequent
measurement

The Company uses derivative financial
instruments, such as forward currency
contracts, interest rate swaps and forward
commodity contracts, to hedge its foreign
currency risks, interest rate risks and
commodity price risks, respectively.

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.

The purchase contracts that meet the
definition of a derivative under IND AS 109 are
recognised in the statement of profit and loss

n) Revenue

A. Revenue from operations:

The Company earns revenue primarily from
sale of chemicals.

Revenue is recognised at the transaction
price upon transfer of control of promised
products or services to customers in an
amount that reflects the consideration which
the Company expects to receive in exchange
for those products or services.

Revenue is recognised to the extent that it
is probable that the economic benefits will
flow to the Company and the revenue can
be reliably measured, regardless of when the
payment is being made.

Revenue is recognised at point in time when
the performance obligation with respect to
sale of chemicals or rendering of services
to the customer which is the point in time
when the customer receives the goods and
services.

Revenue from related parties is recognised
based on transaction price which is at arm''s
length.

Revenue is measured at the transaction price
received or receivable, after the deduction of
any trade discounts, volume rebates, sales
return on transfer of control in respect of
ownership to the buyer which is generally
on dispatch of goods and any other taxes or
duties collected on behalf of the government
which are levied on sales such as Goods
and Services Tax (GST). Discounts given
include rebates, price reductions and other
incentives given to customers. No element
of financing is deemed present as the sales
are made with a payment term which is
consistent with market practice.

Revenue from services is recognised when
all relevant activities are completed and the
right to receive income is established. This is
applicable in case of job work services given
by the Company to the customers.

The Company disaggregates revenue from
sale of goods or rendering of services
with customers by product classification,
geographical region and customer category.

B. Other operating income & Other income

• Eligible export incentives are recognised in
the year in which the conditions precedent
are met and there is no significant
uncertainty about the collectability. In
respect of incentives attributable to the
export of goods, the Company following the
accounting principle of matching revenue
with the cost has recognised export incentive
receivable when all conditions precedent to
the eligibility of benefits have been satisfied
and when it is reasonably certain of deriving
the benefit. Since these schemes are meant
for neutralisation of duties and taxes on
inputs pursuant to exports, the same are
grouped under material costs.

The other export incentives that do not arise
out of neutralisation of duties and taxes are
disclosed under other operating revenue.

• Revenue in respect of Insurance /other
claims, commission etc. are recognised
only when it is reasonably certain that the
ultimate collection will be made.

• Interest income is recognised on time
proportion basis taking into account the
amount outstanding and the rate applicable.

• Dividend income is recognised when the
right to receive the same is established.

• Current investments are marked to market
at the end of the relevant period and the
resultant gains or losses are recognised in
the Income statement.

• For all debt instruments measured either at
amortised cost or at fair value through other
comprehensive income, interest income is
recorded using the effective interest rate
(EIR). EIR is the rate that exactly discounts
the estimated future cash payments
or receipts over the expected life of the
financial instrument or a shorter period,
where appropriate, to the gross carrying
amount of the financial asset or to the
amortised cost of a financial liability. When
calculating the effective interest rate, the
Company estimates the expected cash flows
by considering all the contractual terms
of the financial instrument (for example,
prepayment, extension, call and similar

options) but does not consider the expected
credit losses. Interest income is included in
finance income in the statement of profit and
loss.

• Insurance claim are accounted when the
right to receive is established and the claim
is admitted by the surveyor

o) Employee benefits

All employee benefits payable wholly within
twelve months rendering services are classified
as short-term employee benefits. Benefits such
as salaries, wages, short-term compensated
absences, performance incentives etc., and
the expected cost of bonus, ex-gratia are
recognised during the period in which the
employee renders related service.

Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation, other than the
contribution payable to the provident fund.
The Company recognises contribution
payable to the provident fund scheme as
an expense, when an employee renders the
related service.

Gratuity, a defined benefit obligation is
provided on the basis of an actuarial
valuation made at the end of each year/
period on projected unit credit method.

The cost of providing benefits under the
defined benefit plan is determined using the
projected unit credit method with actuarial
valuations being carried out at each balance
sheet date, which recognises each period
of service as giving rise to additional unit of
employee benefit entitlement and measure
each unit separately to build up the final
obligation.

Re-measurements, comprising of actuarial
gains and losses, the effect of the asset
ceiling, excluding amounts included in net
interest on the net defined benefit liability and
the return on plan assets (excluding amounts
included in net interest on the net defined
benefit liability), are recognised immediately
in the balance sheet with a corresponding
debit or credit to other comprehensive
income in the period in which they occur.
Re-measurements are not reclassified to the

statement of profit and loss in subsequent
periods. Past service cost is recognised in
the statement of profit and loss in the period
of plan amendment.

The Company recognises the following
changes in the net defined benefit obligation
under employee benefit expenses in the
statement of profit and loss:

• Service costs comprising current service
costs, past-service costs, gains and losses
on curtailments and non-routine settlements.

• Net interest expense or income.

Long-term employee benefits

Compensated absences which are not expected
to occur within twelve months after the end of
the period in which the employee renders the
related services are recognised as a liability at the
present value of the defined benefit obligation at
the balance sheet date.

Termination benefits

Termination benefits are payable as a result
of the Company''s decision to terminate
employment before the normal retirement date,
or whenever an employee accepts voluntary
redundancy in exchange for these benefits. The
Company recognises these benefits when it has
demonstrably undertaken to terminate current
employees'' employment in accordance with a
formal detailed plan that cannot be withdrawn, or
to provide severance indemnities as a result of an
offer made to encourage voluntary redundancy.
Benefits that will not be paid within twelve months
of the balance sheet date are discounted to their
present value.

Termination benefits are recognised as an
expense in the period in which they are incurred.

p) Income Taxes:

Tax expenses comprise current tax and deferred
tax:

i. Current tax:

Tax on income for the current period is
determined on the basis of estimated
taxable income and tax credits computed
in accordance with the provisions of the
relevant tax laws and based on the expected
outcome of assessments/ appeals.

Current income tax relating to items
recognised directly in equity is recognised in
equity and not in the statement of profit and
loss. Management periodically evaluates
positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.

The income tax expense or credit for the
period is the tax payable on the current
period''s taxable income based on the
applicable income tax rate for each
jurisdiction adjusted by changes in deferred
tax assets and liabilities attributable to
temporary differences and to unused tax
losses. The current income tax charge is
calculated on the basis of the tax laws
enacted or substantively enacted at the
end of the reporting period in the countries
where the Company and its subsidiaries and
associates operate and generate taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation
is subject to interpretation. It establishes
provisions where appropriate on the basis
of amounts expected to be paid to the tax
authorities.

ii. Deferred tax:

Deferred tax is provided using the balance
sheet approach on temporary differences
at the reporting date between the tax
bases of assets and liabilities and their
carrying amount in the standalone financial
statement for financial reporting purposes at
the reporting date.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets
are reassessed at each reporting and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.

Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is

realised or liability settled, based on the tax
rates (tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised
outside the statement of profit and loss is
recognised outside the statement of profit
and loss. Deferred tax items are recognised
in correlation to the underlying transaction
either in other comprehensive income or
directly in equity.

Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
income tax liabilities and the deferred taxes
relate to the same taxable entity and the
same taxation authority.

The break-up of major components of
deferred tax assets and liabilities as at
balance sheet date has been arrived at
after setting off deferred tax assets and
liabilities where the Company have a legally
enforceable right to set-off assets against
liabilities and where such assets and
liabilities relate to taxes on income levied by
the same governing taxation laws.

For items recognised in OCI or equity,
deferred / current tax is also recognised in
OCI or equity.

iii. MAT credit:

Minimum Alternate Tax (MAT) paid in a year
is charged to the statement of profit and loss
as current tax. The Company recognises
MAT credit available as a deferred tax asset
only to the extent that there is reasonable
certainty that the Company will pay normal
income tax during the specified period, i.e.,
the period for which MAT credit is allowed
to be carried forward. The MAT credit to the
extent there is reasonable certainty that the
Company will utilise the credit is recognised
in the statement of profit and loss and
corresponding debit is done to the deferred
tax asset as unused tax credit.

q) Leases

As a lessee

The Company recognises a right-of-use asset and

a lease liability at the lease commencement date.

The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at
or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it
is located, less any lease incentives received.

The right-of-use assets are subsequently
depreciated using the straight-line method from
the commencement date to the earlier of the
end of the useful life of the right-of-use asset
or the end of the lease term. In addition, the
right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
re-measurements of the lease liability. The lease
liability is initially measured at amortised cost at
the present value of the lease payments that are
not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if
that rate cannot be readily determined, using the
incremental borrowing rate.

Short-term leases and leases of low-value assets
the Company has elected not to recognise right-
of-use assets and lease liabilities for short-term
leases that have a lease term of twelve months or
less and leases of low-value assets. The Company
recognises the lease payments associated with
these leases as an expense in statement of profit
and loss.

r) Research and development:

Revenue expenditure on research and
development is charged to statement of profit
and loss in the year in which it is incurred. Capital
expenditure on research and development is
considered as an addition to property, plant &
equipment / intangible assets.

s) Earnings per share:

Earnings per share are calculated by dividing
the net profit or loss before OCI for the year by
the weighted average number of equity shares
outstanding during the period. For the purpose
of calculating diluted earnings per share, the net
profit or loss before OCI for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
are adjusted for the effects of all dilutive potential
equity shares.

t) Dividend distribution

Dividend distribution to the equity holders is
recognised as a liability in the Company''s annual
accounts in the year in which the dividends are
approved by the Company''s equity holders.

u) Trade payables & trade receivables

A payable is classified as a ‘trade payable'' if it is in
respect of the amount due on account of goods
purchased or services received in the normal course
of business. These amounts represent liabilities for
goods and services provided to the Company prior to
the end of the financial year which are unpaid. These
amounts are unsecured and are usually settled as
per the payment terms stated in the contract. Trade
and other payables are presented as current liabilities
unless payment is not due within twelve months after
the reporting period. They are recognised initially
at their fair value and subsequently measured at
amortised cost using the EIR method.

A receivable is classified as a ‘trade receivable''
if it is in respect of the amount due on account
of goods sold or services rendered in the
normal course of business. Trade receivables
are recognised initially at transaction value and
subsequently measured at amortised cost using
the EIR method, less provision for impairment.

v) Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision Maker (CODM) of the
Company. The CODM is responsible for allocating
resources and assessing performance of the
operating segments of the Company.

w) Business Combinations

Business Combinations are accounted for using
Ind AS 103 ''Business Combination''. Acquisitions
of businesses are accounted for using the
acquisition method unless the transaction is
between entities under common control.

Business Combinations arising from transfer
of interests in entities that are under common
control, are accounted using pooling of interest
method wherein, assets and liabilities of the
combining entities are reflected at their carrying
value. No adjustment is made to reflect fair values,
or recognise any new assets or liabilities other than
those required to harmonise accounting policies.

(b) During the previous year, the Company acquired land and buildings as part of its expansion plans. Buildings requiring
modification and alterations to prepare them for their intended use are classified as Capital Work in Progress (CWIP).
There are no buildings acquired during the current year.

(c) During the previous year, depreciation on assets utilised in association with the expansion plans was recorded as project
expenses pending allocation amounting to '' 10.32 Mn and charged to Capital Work in Progress (CWIP).

(d) Additions to the gross block and accumulated depreciation as of April 01, 2023, represent the amounts recorded
pursuant to the amalgamation of Yellow Stone Fine Chemicals Private Limited (YFCPL), a wholly-owned subsidiary, with
the Company. This amalgamation, being a business combination under common control, has been accounted for in
accordance with Appendix C of Ind AS 103. Furthermore, additions to the gross block and accumulated depreciation for
the financial year ended March 31,2024, reflect the combined effect of capital additions made by both the Company and
the transferor entity, YFCPL.

(e) Impairment assessment by the Management of certain tangible assets, intangible assets and Capital work-in-progress
(CWIP) related to Electro Chemical Fluorination (ECF) used for manufacturing chemicals

The Company has carried out a review of recoverable amount in respect of certain tangible assets, intangible assets and
capital work-in-progress (CWIP) considering decline in performance, among other internal factors. The assessment was
based on the management''s business plans and projections which were approved by the Board of Directors. The key
assumptions used for computation of value-in-use were sales growth rate, gross profit margins, long-term growth rate (cash
flows beyond the 5 years period are extrapolated using the estimated long-term growth rate) and the risk-adjusted pre-tax
discount rate. The discount rates were derived from the Company''s weighted average cost of capital, taking into account the
cost of capital, to which specific market-related premium adjustments are made. The Company had performed sensitivity
analysis by changing the variables independently, keeping the other variables constant, based upon which, there would be
no material impairment charge which would impact the decision of the users of the standalone financial statements.

The carrying value of above mentioned assets is as follows:

(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 Mn.

The Offer comprised of a fresh issue of 2,30,76,923 equity shares aggregating to '' 3,000.00 Mn and an offer for sale of
2,30,76,923 equity shares aggregating to '' 3,000.00 Mn 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 Mn ("Pre-IPO Placement").

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

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

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

Further the actual utilisation towards repayment of loan was lower by '' 63.94 Mn 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 purpose exceeding 25%. This has resulted in general corporate purpose increasing from '' 637.29 to '' 744.76 Mn.

*#Balance of IPO proceeds as at March 31, 2025 and as at March 31, 2024 which are kept in fixed deposit and bank
balance are shown under Bank Balances other than cash and cash equivalents (refer note 10B).

(c) Qualified Institutional Placement

On October 10, 2023, the Company had completed the Qualified Institutional Placement offer ("QIP") of 96,25,579
equity shares of face value of '' 2/- each at a price of '' 269.20/- per share (including a premium of '' 267.20/- per share)
aggregating to '' 2,591.21 Mn.

Total securities premium received from QIP placement is '' 2,571.95 Mn and was reduced by the Company''s share of QIP
related expenses of '' 105.37 Mn which resulted into net receipt of securities premium of '' 2,485.82 Mn.

Notes:

Description of nature and purpose of each reserve:

(a) Capital Reserve:

I t represents the gains of capital nature which mainly include the excess of value of net assets acquired over
consideration paid by the Company for business amalgamation transactions in earlier years.

(b) Capital Redemption Reserve:

This reserve was created for issue of bonus shares. The bonus shares were issued in FY 2019-20.

(c) Securities Premium:

Securities premium includes the premium received on issue of equity shares. It is utilised in accordance with the
provisions of the Companies Act, 2013.

(d) Amalgamation Adjustment Deficit Account

The difference between the carrying values of net identifiable assets and liabilities of transferor companies transferred
to the Company pursuant to schemes of amalgamation and the value of investments in the books of the Company
has been disclosed as Amalgamation Adjustment Deficit Account as per the provisions of Appendix C of Ind AS 103.

(e) Share based payment reserve:

This represents the fair value of the stock options granted by the Company under the 2020 Plan accumulated over
the vesting period. The reserve will be utilised on exercise of the options.

(f) General Reserve:

General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation
purposes. General reserve is created by a transfer from one component of equity to another and is not an item of
other comprehensive income.

(g) Retained earnings (Including Other Comprehensive Income)

Retained earnings represent the amount of accumulated earnings.

(c) Other tax proceedings

(i) The Senior Intelligence Officer, Directorate of Revenue Intelligence of the Bangalore Zonal Unit conducted a search at
the Acetyl Intermediates Manufacturing Facility on February 11, 2021 (the "Search") on the grounds that the Company
was availing a lower rate of basic customs duty at the rate of 2.5% for importing denatured ethyl alcohol and claimed
that the Company was liable to pay 5% as basic customs duty. Officials of the Company were questioned and certain
documents were recovered. Pursuant to the Search, the Company, had paid an amount of '' 35.00 Mn under protest.
Earlier, the Company on January 24, 2021 had also filed a writ petition before the High Court of Bombay challenging the
above matter. The matter is currently pending. Accordingly, the total amount is neither quantifiable nor demanded.

(ii) The Income Tax department conducted the survey under the Income Tax Act, 1961 at the registered office of the
Company from August 9, 2024 till August 10, 2024. There has been no demand raised by the Income Tax department
pursuant to the survey. Accordingly, there is no impact on the standalone financial statements of the Company for
the year ended March 31,2025.

(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). There is a risk of change
in regulations requiring higher gratuity pay-outs (e.g.
Increase in the maximum limit of gratuity of '' 2.00 Mn)

(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.

38 EMPLOYEE STOCK OPTION PLAN

(a) Employee Stock Option Plan 2020:

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"). 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 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 6,33,251 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.

41 FAIR VALUE HIERARCHY

This section explains the judgements 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).

42 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 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.

(a) 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.

(i) 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 functional 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 (US$), Euro (EUR) and Chinese Yuan Renminbi (CNY).

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

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.

The Company manages its interest rate risk by having an agreed portfolio of fixed and variable rate borrowings. Out of the
total borrowings, the amount of floating interest loan is '' 500.00 Mn (March 31, 2024: '' 1303.40 Mn). With all the other
variables remaining constant, the following table demonstrates the sensitivity to a reasonable change in interest rates on
the borrowings:

(C) Credit risk

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 minimise the concentration of risks and therefore mitigate
financial loss due to counter party''s potential failure.

(d) Liquidity risk

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
31,2025 and March 31,2024. 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 en

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Mar 31, 2024

(c) During the year, the Company acquired land and buildings as part of its expansion plans. Buildings requiring modification and alterations to prepare them for their intended use are classified as Construction Work in Progress (CWIP)

(d) Depreciation on assets utilised in association with the expansion plans is recorded as project expenses pending allocation, amounting to '' 10.32 Mn, and charged to Construction Work in Progress (CWIP).

(a) Refer Note 5(K) relating to the business combination under common control between the Company and AHPL and YCPL. Since the merger is covered by Appendix C of INDAS 103, the carrying value of assets and liabilities are merged in these financials from the date when control is established i.e October 02, 2021. Accordingly, the addition on account of business combination represents the effect thereof as per the carrying value of the said assets existed as at October 02,2021 in the books of the transferor company.

1.5 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 transferred 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. During the current year company has provided 100% against the same (Refer Note 2.5).

(a) Laxmi Organic Industries (Europe) B.V. had 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 from time to time and current validity is expiring on August 28, 2024. The above preference share carry dividend coupon rate of 4% per annum. On March 22, 2024 share has been split into 10 share of Euro 2,00,000 each.

(b) The Company has made the following investments:

i Radiances Sunrise Seven Private Limited

The Company had been supplementing its incremental energy requirements by sourcing power from renewable sources. To this end, the Company has executed a Share Subscription and Shareholder''s Agreement dated February 09, 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 had subscribed 15,12,000 equity shares of '' 10 each of Radiances MH Sunrise Seven Private Limited on June 30, 2022.

ii Yellowstone Fine Chemicals Private Limited Right Issue of Equity shares:

During the year, the Company has subscribed to the Rights issue of YFCPL and the Company has purchased 2,84,000 equity shares of '' 10 each at premium of '' 1052.50 per share aggregating to '' 30,17,50,000. Consequently, the total number of equity shares has been increased from 51,00,000 to 53,84,000.

Compulsory Convertible Preference shares (CCPS)

During the year, the Company has invested additional 35,00,000 Compulsory convertible Preference shares (CCPS) of Yellowstone Fine Chemicals Private Ltd of '' 10 each at an issue price of '' 65 per share (including a premium of '' 55 per share) in two tranches as follows. Consequently, the total number of CCPS has been increased from 3,65,00,000 to 4,00,00,000 CCPS.

During the year, the Company has vide letter dated January 01 2024, waived the right of redemption.

iii The Company is in the process of striking of the Wholly owned subsidiary namely, Yellowstone Specialty Chemicals Private Limited

iv During the year the Company has received approval from the ministry of corporate affairs confirming the stricking-off of Laxmi Life Sciences Private Ltd.

(c) In the financial year 2021-22, the Company had 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 Private Ltd. (YFCPL) as per the terms of Share Purchase Agreement dated August 04, 2021. Consequently, Laxmi Italy Srl became a step-down subsidiary of the Company.

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.

All the shares are at face value of '' 2/- each in current and previous year.

B Initial Public Offer

In 2020-21, the Company had completed the Initial public offer ("The Offer / IPO") 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 Mn.

The Offer comprised of a fresh issue of 2,30,76,923 equity shares aggregating to '' 3,000.00 Mn and an offer for sale of 2,30,76,923 equity shares aggregating to '' 3,000.00 Mn 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 Mn ("Pre-IPO Placement").

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

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

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

Further the actual utilisation towards repayment of loan was lower by '' 63.94 Mn 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 purpose exceeding 25%. This has resulted in general corporate purpose increasing from '' 637.29 to '' 744.76 Mn. During the current year, there is an increase in the available funds for general corporate purpose of '' 0.26 Mn resulting in total of '' 745.02 which is fully utilised in current year.

*There has been a saving in the original estimate of IPO issue expenses (Company’s share) of '' 43.58 Mn which has resulted in increase in total available fund net off expenses from '' 4,799.94 Mn to '' 4,843.52 Mn. This amount is adjusted in general corporate purposes. Further the actual utilisation towards repayment of loan was lower by '' 63.94 Mn 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 purpose exceeding 25%. This has resulted in general corporate purpose increasing from '' 637.29 to '' 744.76 Mn.

(*#) Balance of IPO proceeds as at March 31,2024 and as at March 31,2023 which are kept in fixed deposit and bank balance are shown under Other bank balances.

C Qualified Institutional Placement

In October 10, 2023, the Company had completed the Qualified Institutional Placement offer (""QIP") of 96,25,579 equity shares of face value of '' 2/- each at a price of '' 269.20/- per share (including a premium of '' 267.20/- per share) aggregating to '' 2,591.21 Mn.

Total securities premium received from QIP placement is '' 2,571.95 Mn and is reduced by the Company’s share of QIP related expenses of '' 105.49 Mn resulted into net receipt of securities premium of '' 2,485.72 Mn.

**There has been a saving of '' 5.08 Mn in the original estimate of QIP issue expenses which has resulted in the increase in total available fund (net off expenses) from '' 2,480.64 Mn to '' 2,485.72 Mn. This amount is utilised for general corporate purposes, which has resulted in increase from '' 500.97 Mn to '' 506.05 Mn.

D 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.

G 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.

H On January 30, 2019 the Company had 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.

I On January 01, 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 Mn. The buy back was completed by utilising the balance in Securities Premium and General Reserve. The Company had cancelled 50,29,010 equity shares of face value of '' 10/- each and has created Capital Redemption Reserve amounting to '' 50.29 Mn by debiting the balance in General Reserve.

J 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.

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, which has been filed with the Registrar of Companies on September 30, 2022, to make the Scheme effective. All the assets and liabilities, both movable and immovable, all other interest, rights and power of every kind, and all its debts, liabilities, including contingent liabilities, duties and obligations have been transferred to and vested in the LOIL with effect from the Appointed Date, October 02, 2021. Accordingly, the Scheme has been given effect to in these accounts. Since the Business Combination is of entities under common control in accordance with the Appendix C of INDAS 103, the financial information in the financial statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. However, if business combination had occurred after that date, the prior period information shall be restated only from that date of business combination i.e. October 01, 2021. Accordingly, the Company has accounted for the Scheme in its books of accounts with effect from October 01,2021 as required by Appendix C of Ind AS 103 "Business Combination

Issue Of Shares/Consideration: Since AHPL and YCPL are the wholly owned subsidiaries of the Company, there was no exchange/issue of shares by the Company to AHPL and YCPL.

Salient Features of the Scheme of Merger by Absorption

(i) Brief of Acetyls Holding Private Limited(AHPL)

Acetyls Holding Private Limited(''the Company’) has been incorporated on May 23, 2019 under the Companies Act, 2013 (the Act). The Company primarily provides administrative (services) to its group company. The Company commenced business operations on May 23, 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 02, 2021. Subsequently, at a board meeting held on November 02, 2021, the Board of Directors approved the scheme of merger and swap ratio, identifying the effective date for merger as October 02, 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.

(ii) Brief of Yellowstone Chemicals Private Limited

Yellowstone Chemicals Private Limited(''the Company’) has been incorporated on June 12, 2019 under the Companies Act, 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 02, 2021. Subsequently, at a board meeting held on November 02, 2021, the Board of Directors approved the scheme of merger and swap ratio, identifying the effective date for merger as October 02, 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 02, 2021.

(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 01,2021 as explained in para 5(K) above.

1 With effect from October 02, 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 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.

Description of nature and purpose of each reserve :General Reserve:

General reserve is created from time to time by way of transfer of profits from retained earnings for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Securities Premium:

This represents premium received on allotment of equity shares.

Capital Reserve:

It represents the gains of capital nature which mainly include the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transactions in earlier years

Capital Redemption Reserve:

This reserve was created for issue of bonus shares. The bonus shares were issued in FY 2019-20.

Share Option Outstanding Account:

This represents the fair value of the stock options granted by the Company under the 2020 Plan accumulated over the vesting period. The reserve will be utilised on exercise of the options.

A) Term loan includes :

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

Tenure of loan: max 60 months with moratorium of 6 months.

Repayment: First 4 quarterly instalment of 3.22%, next 13 quarterly instalments of 6.22% and final instalment of 6.26% of loan amount.

Interest : Linked with HDFC Bank 1 year MCLR 0 bps

Tenure of loan: max 60 months (Previous year - loan under moratorium)

ii) Rupee term loans from (Axis Bank Ltd):

Tenure of loan: max 72 months with moratorium of 18 months.

Repayment: 18 equal quarterly instalments.

Interest : Linked with Axis Bank 1 year MCLR 0 bps

Tenure of loan: max 72 months (Previous year - loan under moratorium)

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.

C) Government grant:

There are multiple interest free sales tax loans which are repayable in five installments from their due date . The Company has fully repaid '' 3.24 Mn as at March 31, 2024 (outstanding March 31,2023: '' 3.24 Mn). The first installment date was May 2009 and last terminal date is May 2023.

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

(i) Defined contribution plans:

The Company’s state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the service.

(ii) Defined benefit plans:

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 Mn ( March 31, 2023 : '' 2.00 Mn) 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). There is a risk of change in regulations requiring higher gratutiy pay-outs (e.g. Increase in the maximum limit of gratuity of '' 2.00 Mn)

(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 which are secured by first Pari-passu charge, by way of hypothecation on current assets and second pari-passu charge, by way of mortgage on fixed assets.

Quarterly returns or Statements of current assets filed by the Company with banks for the year 2023-24 are in agreement with the books of accounts which is detailed in Statement A.

b) Utilisation of Borrowings taken from Bank and Financial Institution

The Company have used the borrowings for the purpose it was availed for.

c) Foreign Currency Term Loan

The loan from Citibank was structured with 15 equal quarterly installments in foreign currency, starting from October 2019. Interest payable at 3 months USD Libor plus 175 basis points per annum. The Company converted this External Commercial Borrowing (ECB) into an Indian Rupee (?) loan under a Currency Swap (CCY SWAP) on April 02, 2019, at a fixed interest rate of 7.90% per annum. The final installment was repaid on April 19, 2024.

(iv) Other tax proceedings -

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, had paid an amount of '' 35.00 Mn 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.

| 27. | 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.

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. The plan is administered by the Nomination and Remuneration Committe 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 14,06,250 equity shares were granted under Laxmi - Employee Stock Option Plan 2020 ("ESOP-2020").

Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during a period. The measure of volatility used in the Model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time which is considered as equivalent to the life to expiration. In the instinct case, the volatility of the Company is computed based on the average volatility of the comparable companies listed on stock exchange.

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.

| 34. | 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).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis as at March 31,2024 and March 31,2023.

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) and Chinese Yuan Renminbi (CNY).

Foreign currency sensitivity analysis:

The Company is mainly exposed to USD and EURO fluctuations

The following table details the Company’s sensitivity to a 1% increase and decrease in the Rupee against the relevant foreign currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items as tabulated above and adjusts their translation at the period end for 1% change in foreign currency rates. A positive number below indicates an increase in profit before tax or vice-versa.

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 interestbearing 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.

The Company manages its interest rate risk by having an agreed portfolio of fixed and variable rate borrowings. Out of the total borrowings, the amount of fixed interest loan is '' 53.98 Mn and floating interest loan is '' 1303.40 Mn (March 31, 2023: Fixed interest loan '' 21.66 Mn and Floating interest loan '' 1400 Mn). With all the other variables remaining constant, the following table demonstrates the sensitivity to a reasonable change in interest rates on the borrowings:

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 minimise 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 31,2024 and March 31,2023. 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.

| 37. | The Board of Directors at their meeting held on May 21,2024 has recommended dividend of '' 0.60 per equity share (30%) 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.

~38T| 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.

| 39. | The specialty intermediates unit at Mahad suffered unprecedented flooding in July 2021. During the year, the Company has on receipt basis accounted for Loss of Profit of '' 190 Mn on account of Loss of production and consequent loss of revenue and disclosed under "Other Operating Income".

| 40. | UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

i The Company has not 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(is), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary 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).

ii The Company has not received any fund from any person(s) or entity(is), 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.

| 41. | The Board of Directors at its meeting held on May 21, 2024 have approved the Scheme of Amalgamation for merger of Yellowstone Fine Chemicals Private Limited ("Transferor Company", a wholly owned subsidiary of LOIL) with the Company under section 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules and regulations made thereunder ("Scheme"). The Appointed Date for the Scheme is April 1, 2024. The Company is in the process of filing the first motion application for approval of the Scheme with the Mumbai Bench of the National Company Law Tribunal ("NCLT"). The Scheme as aforesaid is subject to necessary approvals by shareholders and creditors of the Company and Transferor Company and NCLT Mumbai Bench and such other statutory and regulatory approvals as may be required.

| 42. | Analytical Ratios as per requirements of Schedule III are given in Statement C

| 43. | MAINTENANCE OF BOOKS OF ACCOUNTS AND BACK-UP

As per the MCA notification dated 05 August 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain back-up on daily basis of books of account and other relevant books and papers maintained in electronic mode that should be accessible in India at all the time. Also, the Companies are required to create backup of books of account on servers physically located in India on a daily basis.

The books of account of the Company are maintained in electronic mode and these are readily accessible in India at all times. Currently, the Company is maintaining back-up of books of account on server physically located in India on daily basis.

Audit Trail:

The Company has been maintaining its books of account in the SAP S4 HANA which has feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to

sub rule (!) of Rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021. However, the audit trail feature is not enabled for direct changes to data in the underlying database. There were no instance of audit trail feature being tampered with in respect of the accounting software.

Presently, privileged access to database of accounting softwares mentioned above continues to be restricted to limited set of users who necessarily require this access for maintenance and administration of the database.

| 44. | SUBSEQUENT EVENT

There are no subsequent event after the year end March 31, 2024 till the date of signing of this standalone financial statement.

| 45. | ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III TO THE COMPANIES ACT, 2013

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company has not been declared as wilful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or any other lender or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

(iii) The Company has no 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.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company does not have any charges pending satisfaction with ROC beyond the statutory period.

46. The balance sheet, statement of profit and loss, statement of cash flow , statement of changes in equity, statement of material accounting policies and the other explanatory notes forms an integral part of the financial statements of the Company for the year ended March 31,2024.

| 47. | The Standalone financial statement were authorised for issue in accordance with a resolution of the Board of Director''s in its meeting held on May 21,2024.

| 48. | Figures of the previous period have been regrouped wherever necessary including to conform to current year’s classification

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Mar 31, 2023

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.

After 36 months but with in 120 months post allotment of OCRPS, the issuer 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 issuer, 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 issuer opt to convert one tranche there is no restriction to apply for redemption in second tranch and vice versa

On conversion the entire amount of OCRPS shall be adjusted against the allotment of Equivalent number of equity shares of the YFCPL to Laxmi.

The pricing of equity shares on conversion of OCRPS shall be ? 65 as determined by the valuer vide report dated November 1, 2022.

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.

which has been filed with the Registrar of Companies on September 30, 2022, to make the Scheme effective. All the assets and liabilities, both movable and immovable, all other interest, rights and power of every kind, and all its debts, liabilities, including contingent liabilities, duties and obligations have been transferred to and vested in the LOIL with effect from the Appointed Date, October 2, 2021. Accordingly, the Scheme has been given effect to in these accounts. Since the Business Combination is of entities under common control in accordance with the Appendix C of INDAS 103, the Financial information in the Financial Statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the preceding period in the Financial Statements, irrespective of the actual date of the combination. However, if business combination had occurred after that date, the prior period information shall be restated only from that date of business combination i.e October 2, 2021. Accordingly, the Company has accounted for the Scheme in its books of accounts with effect from October 2, 2021 as required by Appendix C of Ind AS 103 “Business Combination”

Issue Of Shares/Consideration: Since AHPL and YCPL are the wholly owned subsidiaries of the Company, there was no exchange/issue of shares by the Company to AHPL and YCPL.

Salient Features of the Scheme of Merger by Absorption

(i) Brief of Acetyls Holding Private Limited(AHPL)

Acetyls Holding Private Limited(‘the Company’) has been incorporated on May 23, 2019 under the Companies Act, 2013 (the Act). The Company primarily provides administrative (services) to its group Company. The Company commenced business operations on May 23, 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.

(ii) Brief of Yellowstone Chemicals Private Limited

Yellowstone Chemicals Private Limited(‘the Company’) has been incorporated on June 12, 2019 under the Companies Act,

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.

25. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
Particulars	April - March 2023	April - March 2022
(i) Contingent liabilities
(a) Liabilities Disputed - Appeals filed with respect to:
(i) Disputed indirect taxes matters (Net of Amount paid under protest of f 6.49 million (PY: f 6.49 million )	219.98	313.20
(ii) Disputed direct taxes matters - on account of disallowances/additions and default of TDS	383.02	7.03
(iii) Other dispute - with MSEDCL (Net of amount paid under protest of f 2.30 million (PY: f 2.30 million)	4.53	4.53
(b) Guarantees:
(i) Furnished by banks on behalf of the Company	239.16	66.64
(c) Other money for which the Company is contingently liable:
Standby letter of credit given on behalf of wholly owned subsidiaries	-	79.58
(ii) Commitments (Net of advances):
(a) Capital Commitments - Estimated amount of contracts remaining to be executed on capital account	141.47	878.08
(b) Export obligation - under Advance License Scheme on duty free import of specific raw materials remaining outstanding	100.32	782.61
(iii) Letters of Credit	1,223.69	1,714.36

(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.

---

Mar 31, 2022

Notes

A) (*)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 Company is negotiating with the concerned party for the lease renewal.

There is a dispute with regards to the title and the lease agreement which is subjudice before the Debt Recovery Appellate Tribunal (DRAT) on account of action by the Lessor’s Bankers. The Company, however has a physical possession of the Distillery Plant and is operating presently.

(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, 2020 till August 28, 2022. 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 Acetyls Holding Private Limited

The Company completed the acquisition of 100% equity share capital of “Acetyls Holding Private Limited" on October 01, 2021 in accordance with terms of the Share Purchase Ageement dated December 09, 2020 and Prospectus dated March 18, 2021. With this acquisition, “Acetyles Holding Private Limited" and its wholly owned subsidiary namely “Yellowstone Chemicals Private Limited" became subsidiaries of the Company w.e.f. October 01, 2021. The outstanding advance paid against purchase of these shares as on March 31,2021 has been adjusted appropriately.

ii 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 04, 2021. Consequently, Laxmi Italy Srl became a step-down subsidiary of the Company.

iii Laxmi USA LLC

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

(c) In FY21, the Company has made the following investments:

Yellowstone Specialty Chemicals Private Limited

The subsidiary was incorporated on April 24, 2020 and the payment for the aforesaid equity share subscription was made on the same day.

Cleanwin Energy One LLP

The Company has been supplementing its incremental energy requirements by sourcing power from renewable sources. To this end, the Company on January 25, 2021, acquired 26% stake in Cleanwin Energy One LLP (“Cleanwin") for supply of 5 MW electricity generated through wind turbines at a concessional rate with a minimum entitlement of 51% of power generated in lieu of share of profits."

(a) 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.

(*) Split of shares

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.

(b) Initial Public Offer

Last financial year, the Company has completed the Initial public offer (“The Offer / IPO”) 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.

*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, 2022 and as at March 31, 2021 which are kept in fixed deposit and bank balance are shown under Other bank balances (Refer note 2.4 ).

The above figures of ? 4,799.94 million does not include ? 43.07 million held in escrow account towards issue expenses as per prospectus.

(e) 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.

h) 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.

i) 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.

j) On January 01, 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.

k) 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.

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

Notes:

A) Term loan includes :

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

Tenure of loan: max 60 months (During the year the loan is fully repaid)

Repayment: 18 equal quarterly installments after a moratorium period of 6 months from the date of 1st disbursement Interest :

Linked with HDFC Bank 1 year MCLR 25 bps for ? 500 million

Linked with HDFC Bank 1 year MCLR 70 bps for ? 200 million and,

Linked with HDFC Bank 1 year MCLR 65 bps for ? 400 million which the Company has availed in the month of Nov 2019

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

Tenure of loan : max 60 months (During the year the loan is fully repaid.)

Repayment : 18 equal quarterly installments after a moratorium period of 6 months from the date of 1^st disbursement with first payment starting from September 30, 2020

Interest : Linked with 1 year MCLR 115 bps for sanctioned term loan of ? 750 million

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 02, 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

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 entire current assets of the Company.

C) Vehicle loan:

Vehicle loan is secured against the same vehicle for which loan is taken

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 ? 6.48 million as at March 31, 2022 (March 31, 2021: ? 9.72 million). The first installment date was May 2009 and last terminal date is May 2023.

F) Borrowing classified as current liabilities

One of the objects of the IPO of the Company is repayment of the relevant long term loans of the Company. Accordingly, to the extent that loans are being repaid out of the IPO proceeds, the same are re-classified as current liabilities.

H) 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, the disclose w.r.t documents submitted to lenders is tabulated hereinder:-

Quarterly returns or Statements of current assets filed by the Company with banks or financial institutions are not in agreement with the books of accounts as per the details and for the reasons detailed in Statement A.

I) Registration of charges or satisfaction with Registrar of Companies

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 ? 2915.60 million for which charge was pending creation as at balance sheet date, however the same was created on April 22, 2022, for which ROC filing is under process.

J) Disclosure of repayments

During the 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.

(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, 2021 : ? 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.

(c) 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.

(iv) Other tax proceedings -

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 ? 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.

Volatility is a measure of the amount by which a price has fluctuated or is expected to fluctuate during a period. The measure of volatility used in the Model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time which is considered as equivalent to the life to expiration. In the instinct case, the volatility of the Company is computed based on the average volatility of the comparable companies listed on stock exchange.

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).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring

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.

The Company manages its interest rate risk by having an agreed portfolio of fixed and variable rate borrowings. Out of the total borrowings, the amount of fixed interest loan is ? 98.66 million and floating interest loan is ? 62.42 million (March 31,2021: Fixed interest loan ? 176.53 million and Floating interest loan ? 1,393.34 million). With all the other variables remaining constant, the following table demonstrates the sensitivity to a reasonable change in interest rates on the borrowings:

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, 2022 and March 31, 2021. 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.

‘including current maturities and non-current borrowing reclassified to current liabilities pursuant to the receipt of IPO proceeds (Refer Note 7.1 F) as at March 31,2022 and as at March 31,2021.

Note - The above maturity profile does not includes contractual maturities of lease liability and the same is given in Note 30(d).

‘Gross debt as at March 31,2021 include long term debt which is being repaid out of IPO proceeds and has been classified as current liabilities (Refer note 7.1 F) and Cash and cash equivalent does not includes unutilised IPO proceeds lying in bank and fixed deposits.

36 The Board of Directors at their meeting held on May 04, 2022 has recommended dividend of ? 0.70 per share 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 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 31,2022.

38 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.

39 Compliance with approved Scheme(s) of Arrangements

During the year under review, the Company has completed the acquisition of 100% equity share capital of Acetyls Holding Private Limited (AHPL) in accordance with terms of the Share Purchase Agreement dated December 09, 2020 and Prospectus dated March 18, 2021. With this acquisition, AHPL and its wholly owned subsidiary Company, namely, Yellowstone Chemicals Private Limited (YCPL) have become subsidiaries of the

Company w.e.f. October 01, 2021. Subsequently, the Company has filed a scheme of Merger by Absorption of AHPL and YCPL with the Company to NCLT, Mumbai on November 25, 2021 and the Appointed Date of Merger is October 02, 2021. The proposed Merger by Absorption seeks to achieve operational and economic synergies that will be beneficial to the interest of shareholders, creditors and other stakeholders of all Companies. The Company has complied with all the directions issued by NCLT. In respect of the scheme of Merger, and thereafter the regulators, Official Liquidator (OL) and Registrar of Companies (ROC), have filed their reports before the NCLT and have no adverse observation. The Regional Director (RD) is expected to file its report with NCLT on the on or before May 05, 2022, being the date fixed for NCLT hearing (subject to further adjournments, if any). Pending final clearance of NCLT no effects are given in these Financial Statements.

40 Utilisation of Borrowed funds and share premium:

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.

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 A 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.

41 ANALYTICAL RATIOS AS PER REQUIREMENTS OF SCHEDULE III ARE GIVEN IN STATEMENT-C.

42 Figures of the previous period have been regrouped/ reclassified wherever necessary including to conform to current period’s classification in order to comply with the requirements of amended Schedule III to the Companies Act, 2013 effective April 01,2021.