c) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity share having a par value of Rs. 2 per share. Each holder of equity share is entitled to one vote per share. All shares rank pari passu on repayment of capital and surplus assets in the event of liquidation. Dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except interim dividend.

d) Shares reserved for issue under "Employees Stock Option Scheme 2022 (ESOS 2022)"

The Company had reserved issuance of 1,088,500 Equity shares having face value of Rs. 2 each for offering to eligible employees of the Company under AETL Employees Stock Option Scheme 2022 (ESOS 2022) . The option would vest on graded basis over a maximum period of 5 years or such other period as may be decided by the Nomination and Remuneration Committee from the date of grant based on specific criteria. (refer note 43 & note 43A)

Nature and purpose of reserves Capital reserve

The reserve comprises of profits/gains of capital nature earned by the Company and credited directly to such reserve. Securities premium

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

Employee stock option reserve

This represents the fair value of options granted to eligible employees of the Company under the ESOS 2022 Scheme over the vesting period. This reserve will be utilised on exercise of options by the employees.

General reserve

General reserve is created out of the profits earned by the Company by way of transfer from surplus in the Statement of Profit and Loss. The Company can use this reserve for payment of dividend and issue of fully paid up and unpaid bonus shares.

Retained earnings

This reserve represents surplus of profit and loss account.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income and the period over which deferred income tax assets will be recovered. Any changes in future taxable income would impact the recoverability of deferred tax assets.

Given that the Company does not have any intention to dispose investments in subsidiaries in the foreseeable future, deferred tax asset on indexation benefit in relation to such investments has not been recognised.

37 EMPLOYEE BENEFITS

The Company contributes to the following post-employment plans in India.

(A) Defined Contribution Plans:

The Company makes contributions towards provident fund and superannuation fund which are in the nature of defined contribution post employment benefit plans. Under the plan, the Company is required to contribute a specified percentage of payroll cost to fund the benefits.

The Company recognised Rs 20.94 million for the year ended 31 March 26 (31 March 25: Rs. 18.89 million) towards provident fund and employee deposit linked insurance contribution, Rs 0.71 million for the year ended 31 March 26 (31 March 25: Rs 0.72 million) towards Employee State Insurance Scheme, Rs 2.80 million for the year ended 31 March 26 (31 March 25: Rs 1.27 million) towards National Pension Scheme and Rs 0.06 million for the year ended 31 March 26 (31 March 25: Rs 0.05 million) towards Labour Welfare Fund in the Statement of Profit and Loss.

The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(B) Defined Benefit Plan:

The Company provides for gratuity benefit, which is defined benefit plans, covering all its eligible employees. The Company has taken a Group Gratuity for its employees with the Life Insurance Corporation of India (LIC). Under gratuity policy, the eligible employees are entitled to receive gratuity payments upon their resignation or death (subject to completion of 4.5 years of employment) in lumpsum after deduction of necessary taxes.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31 March 26. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation and the plan assets as at balance sheet date:

The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

Compensated absences

The Company recognised Rs 10.29 million for the year ended 31 March 26 (31 March 25: Rs. 11.86 million) towards compensated absences.

Superannuation

The Company recognised Rs 3.75 million for the year ended 31 March 26 (31 March 25: Rs. 3.38 million) towards super-annuation fund contribution in the Statement of Profit and Loss.

(b) The Weighted average incremental borrowing rate ranges between 6.00% to 9.50% p.a. for local currency borrowings has been applied for measuring the lease liability at the date of initial application.

(c) The Company incurred Rs. 13.38 million for the year ended 31 March 26 (31 March 25: Rs. 13.42 million) towards expenses relating to leases in statement of profit and loss. Lease rent incurred not falling under the scope of Ind AS 116 amounted to Rs. 2.37 million for the year ended 31 March 26 (31 March 25: Rs. 2.17 million). (refer Note 35).

(d) Total cash outflow for leases for year ended 31 March 26 is Rs 10.22 million (31 March 25: Rs 9.80 million).

(e) General Description of leasing agreements:

- Leased Assets: Office premises and leasehold land

- Future Lease rentals are determined on the basis of agreed terms.

- At the expiry of lease terms, the Company has an option to return the assets or extend the term by giving notice in writing.

- Lease agreements are generally cancellable and are renewable by mutual consent on mutually agreed terms.

limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments.

Trade and other receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

At 31 March 26, the carrying amount of the Company's most significant customer accounted for Rs 159.28 million (31 March 25 - Rs 118.22 million)

B. Measurement of fair values

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

• Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 - Inputs are 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 are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The cost of unquoted investments included in Level 3 of fair value hierarchy approximate their fair value because there is a wide range of possible fair value measurements and the cost represents estimate of fair value within that range.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk

i. Risk management framework

The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company's risk management policies. The committee reports regularly to the board of directors on its activities.

The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The audit committee oversees how management monitors compliance with the company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit

The impairment loss at 31 March 26 and 31 March 25 related to certain customers that have defaulted on their payments to the Company and are not expected to be able to pay their outstanding balances, mainly due to economic circumstances.

Cash and cash equivalents

The Company held cash and cash equivalents of Rs 18.94 million at 31 March 26 (31 March 25: Rs 56.04 million). The cash and cash equivalents are held with bank and financial institution counterparties with good credit ratings.

Derivatives

There are no derivatives contracts outstanding as on 31 March 26.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposit and mutual funds which carry no/low mark-to-market risks. The Company monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

Currency risk

The Company is exposed to currency risk on account of its operations in other countries. The functional currency of the Company is Indian Rupee. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, the Company uses derivative instruments, i.e. foreign exchange forward contracts to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognized assets and liabilities.

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company's income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables

43A EMPLOYEE SHARE-BASED PAYMENT PLANS

a) Description of share-based payment arrangements:

As at 31 March 26, the Company has the following share-based payment arrangements for employees.

'AETL Employee Stock Option Scheme 2022 - ("AETL ESOS 2022")

AETL ESOS 2022, 2nd grant provides for the grant of 512,500 stock options to specified employees on 27 March 25. The AETL ESOS 2022 had been formulated by Board of Directors which was further adopted by Nomination and Remuneration committee. The Shareholders approved scheme on 19 August 2022. The plan entitles specified employees to purchase shares in the Company at the stipulated exercise price, subject to compliance with vesting conditions. As per the plan, holders of vested options are entitled to purchase one equity share of face value of Rs 2 each for every option as per the scheme.

512,500 Equity Shares of Face Value of Rs. 2 each are reserved for issue under AETL Employee Stock Option Scheme 2022 (AETL ESOS 2022)

48 INVESTMENT IN ADVANCED ENZYMES EUROPE B.V.

On 19 December 24, the Company invested Rs 478.18 million in Advanced Enzymes Europe B.V. ('AEEBV') (wholly owned subsidiary) by way of subscription to 3,623,163 equity shares. The value per equity share is EUR 1.48 and the face value of EUR 1 per share. Pursuant to this investment, the Company now holds 7,900,000 equity shares of AEEBV and the Company continues to be 100% shareholder of AEEBV.

49 PROPOSED DIVIDEND

The Board of Directors recommended a final dividend for the financial year 25-26 of Rs. 1.35/- (31 March 25: Rs. 1.20) per equity share of the face value of Rs. 2/- each, and the same will be paid after approval of shareholders in the Annual General Meeting of the Company.

52 THE CODE ON SOCIAL SECURITY 2020

On November 21,25, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment published draft Central Rules and Frequently Asked Questions (FAQs) to enable assessment of the financial impact due to changes in regulations.

The Company has assessed and disclosed the incremental impact of these changes on the basis of current remuneration structure. The current assessment is based on the best information available, consistent with the guidance provided by the Institute of Chartered Accountants of India. Considering the materiality and regulatory-driven, non-recurring nature of this impact, the Company has presented such incremental impact under "Exceptional Items" in the standalone financial statements for the year ended 31 March 26.

The incremental impact consisting of gratuity of Rs. 38.58 million in the standalone financial statements primarily arose due to change in wage definition. The Company continues to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects of the Labour Code and would accordingly take necessary steps for compliance thereof and also provide appropriate accounting effect on the basis of such developments, as needed.

53 SHARE APPLICATION MONEY PENDING ALLOTMENT

Share Application money pending allotment represents exercie money received from employees pursuant to exercise of vested stock options under the Company's Employee Stock Option Scheme ('ESOS' or "AETL ESOS 2022”) - 2nd grant, against which equity shares are pending allotment as at 31 March 26. The Company has received applications for allotment of equity shares, the details of which are below:

(a) 7,375 equity shares of Rs 2 each issued at par;

(b) 4,900 equity shares of Rs 2 each at premium of Rs 164 per share; and

(c) 6,725 equity shares of Rs 2 each at premium of Rs 219 per share.

The allotment is expected to be completed within the period prescribed under the applicable provisions of the Companies Act 2013 and terms of the scheme.

The Company has sufficient authorised share capital to cover the proposed allotment of shares.

55 OTHER STATUTORY INFORMATION

(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 does not have any transactions with companies struck off.

(iii) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

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

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company

(Ultimate Beneficiaries) or

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

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

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

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

(viii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(ix) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

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

(xi) Title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the respective entities in the Company.