3.14 Provisions and contingencies

The Company recognizes provisions when a
present obligation (legal or constructive) as a
result of a past event exists and it is probable that
an outflow of resources embodying economic
benefits will be required to settle such obligation
and the amount of such obligation can be reliably
estimated. Provisions are reviewed at each
balance sheet date and are adjusted to reflect the
current best estimate.

The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account the risks
and uncertainties surrounding the obligation.
If the effect of time value of money is material,
provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage of
time is recognised as a finance cost.

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 beyond the control of
the Company or a present obligation that is not
recognised because it is not probable that an
outflow of resources will be required to settle
the obligation. Contingent liability also arises in
extremely rare cases where there is a liability
that cannot be recognised because it cannot
be measured reliably. The Company does not
recognize a contingent liability but discloses its
existence in the financial statements.

Contingent assets are not recognised in the
financial statements. However, it is disclosed only
when an inflow of economic benefits is probable

3.15 Financial instruments

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially
measured at fair value, except for trade receivables
which are initially measured at transaction price.
Transaction costs that are directly attributable to
the acquisition or issue of financial assets and
financial liabilities (other than financial assets
and financial liabilities at fair value through profit
or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value
through profit or loss are recognised immediately
in the Statement of Profit and Loss.

A] Financial assets

a) Initial recognition and measurement:

Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the instrument. On initial
recognition, a financial asset is recognised at
fair value except for trade receivables which
are initially measured at transaction price. In
case of financial assets which are recognised
at fair value through profit and loss (FVTPL),
its transaction costs are recognised in the
Statement of Profit and Loss. In other cases,
the transaction costs are attributed to the
acquisition value of the financial asset.

b) Effective interest method:

The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period. The effective

interest rate is the rate that exactly discounts
estimated future cash receipts (including all
fees and points paid or received that form
an integral part of the effective interest rate,
transaction costs and other premiums or
discounts) through the expected life of the
debt instrument, or, where appropriate, a
shorter period, to the net carrying amount on
initial recognition.

Income is recognised on an effective interest
basis for debt instruments other than those
financial assets classified as at FVTPL.
Interest income is recognised in profit or loss
and is included in the "Other income" line
item.

c) Subsequent measurement:

For subsequent measurement, the Company
classifies a financial asset in accordance
with the below criteria:

i. The Company’s business model for
managing the financial asset and

ii. The contractual cash flow
characteristics of the financial asset.

Based on the above criteria, the Company
classifies its financial assets into the
following categories:

i. Financial assets measured at
amortised cost:

A financial asset is measured at the
amortised cost if both the following
conditions are met:

a) The Company’s business
model objective for managing
the financial asset is to hold
financial assets in order to collect
contractual cash flows, and

b) 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.

Such financial assets are subsequently
measured at amortised cost using
the effective interest method. The
amortised cost of a financial asset is
also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI
if both of the following conditions are
met:

a) The Company’s business model
objective for managing the
financial asset is achieved both by
collecting contractual cash flows
and selling the financial assets,
and

b) 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.

Investments in equity instruments,
classified under financial assets, are
initially measured at fair value. The
Company may, on initial recognition,
irrevocably elect to measure the
same either at FVTOCI or FVTPL. The
Company makes such election on an
instrument-by-instrument basis. Fair
value changes on an equity instrument
are recognised as other income in the
Statement of Profit and Loss unless the
Company has elected to measure such
instrument at FVTOCI.

This category does not apply to any of
the financial assets of the Company.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL
unless it is measured at amortised cost
or at FVTOCI as explained above.

This is a residual category applied to
all other investments of the Company
excluding investments in subsidiaries
and joint ventures. Such financial
assets are subsequently measured at
fair value at each reporting date. Fair
value changes are recognised in the
Statement of Profit and Loss. Dividend
income on the investments in equity
instruments are recognised as 'other
income’ in the Statement of Profit and
Loss.

d) Foreign exchange gains and losses:

The fair value of financial assets denominated
in a foreign currency is determined in that
foreign currency and translated at the spot
rate at the end of each reporting period.

For foreign currency denominated financial
assets measured at amortised cost and
FVTPL, the exchange differences are
recognised in the Statement of Profit and
Loss except for those which are designated
as hedging instruments in a hedging
relationship

e) Derecognition:

A financial asset (or, where applicable, a
part of a financial asset or part of a group
of similar financial assets) is derecognised
(i.e. removed from the Company’s Balance
Sheet) when any of the following occurs:

The contractual rights to cash flows from the
financial asset expires;

i. The Company transfers its contractual
rights to receive cash flows of the
financial asset and has substantially
transferred all the risks and rewards of
ownership of the financial asset;

ii. The Company retains the contractual
rights to receive cash flows but assumes
a contractual obligation to pay the cash
flows without material delay to one or
more recipients under a 'pass-through’
arrangement (thereby substantially
transferring all the risks and rewards of
ownership of the financial asset);

iii. The Company neither transfers nor
retains substantially all risk and rewards
of ownership and does not retain control
over the financial asset.

In cases where Company has neither
transferred nor retained substantially all of
the risks and rewards of the financial asset,
but retains control of the financial asset,
the Company continues to recognize such
financial asset to the extent of its continuing
involvement in the financial asset. In that
case, the Company also recognizes an
associated liability.

The financial asset and the associated
liability are measured on a basis that reflects

the rights and obligations that the Company
has retained.

On derecognition of a financial asset, the
difference between the asset’s carrying
amount and the sum of the consideration
received and receivable and the cumulative
gain or loss that had been recognised in other
comprehensive income and accumulated in
equity is recognised in profit or loss if such
gain or loss would have otherwise been
recognised in profit or loss on disposal of
that financial asset.

f) Impairment of financial assets:

The Company applies expected credit
losses (ECL) model for measurement
and recognition of loss allowance on the
following:

i. Trade receivables

ii. Financial assets measured at amortised
cost (other than trade receivables)

In case of trade receivables, the Company
follows a simplified approach wherein an
amount equal to lifetime ECL is measured
and recognised as loss allowance.

In case of other assets (listed as ii above),
the Company determines if there has been
a significant increase in credit risk of the
financial asset since initial recognition.
If the credit risk of such assets has not
increased significantly, an amount equal to
12-month ECL is measured and recognised
as loss allowance. However, if credit risk has
increased significantly, an amount equal to
lifetime ECL is measured and recognised as
loss allowance.

Subsequently, if the credit quality of the
financial asset improves such that there is
no longer a significant increase in credit risk
since initial recognition, the Company reverts
to recognising impairment loss allowance
based on 12-month ECL.

ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the
cash flows that the entity expects to receive
(i.e. all cash shortfalls), discounted at the
original effective interest rate.

12-month ECL are a portion of the lifetime
ECL which result from default events that are
possible within 12 months from the reporting
date. Lifetime ECL are the expected credit
losses resulting from all possible default
events over the expected life of a financial
asset.

ECL are measured in a manner that they
reflect unbiased and probability weighted
amounts determined by a range of outcomes,
taking into account the time value of money
and other reasonable information available
as a result of past events, current conditions
and forecasts of future economic conditions.

As a practical expedient, the Company
uses a provision matrix to measure lifetime
ECL on its portfolio of trade receivables.
The provision matrix is prepared based on
historically observed default rates over the
expected life of trade receivables and is
adjusted for forward-looking estimates. At
each reporting date, the historically observed
default rates and changes in the forward¬
looking estimates are updated, if required.

ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
expense/ income in the Statement of Profit
and Loss under the head 'Other expenses’ /
'Other income’.

B] Financial liabilities and equity instruments

Debt and equity instruments issued by a
Company entity are classified as either
financial liabilities or as equity in accordance
with the substance of the contractual
arrangements and the definitions of a
financial liability and an equity instrument.

i. Equity instruments:

An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Equity instruments issued by a Company
entity are recognised at the proceeds
received, net of direct issue costs.

Repurchase of the Company’s own equity
instruments is recognised and deducted
directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue
or cancellation of the Company’s own equity
instruments.

ii. Financial Liabilities:

a) Initial recognition and measurement:

Financial liabilities are recognised
when the Company becomes a party
to the contractual provisions of the
instrument. Financial liabilities are
initially measured at fair value.

b) Subsequent measurement:

Financial liabilities are subsequently
measured at amortised cost using the
effective interest rate method. Financial
liabilities carried at fair value through
profit or loss are measured at fair value
with all changes in fair value recognised
in the Statement of Profit and Loss.

The Company has not designated any
financial liability as at FVTPL.

c) Foreign exchange gains and losses:

For financial liabilities that are
denominated in a foreign currency and
are measured at amortised cost at
the end of each reporting period, the
foreign exchange gains and losses are
determined based on the amortised cost
of the instruments and are recognised
in profit or loss.

The fair value of financial liabilities
denominated in a foreign currency is
determined in that foreign currency and
translated at the closing rate at the end
of the reporting period. For financial
liabilities that are measured as at FVTPL,
the foreign exchange component forms
part of the fair value gains or losses and
is recognised in Statement of Profit and
Loss.

d) Financial guarantee contracts:

A financial guarantee contract is a
contract that requires the issuer to
make specified payments to reimburse
the holder for a loss it incurs because
entity on whose behalf the guarantee is
issued by the Company, fails to make
payments when due in accordance with
the terms of a debt instrument.

Financial guarantee contracts issued
by the Company are initially measured
at their fair values and are subsequently

measured (if not designated as at Fair
value though profit or loss) at the higher
of:

• the amount of impairment
loss allowance determined in
accordance with requirements
of Ind AS 109; and

• the amount initially recognised
less, when appropriate, the
cumulative amount of income
recognised.

e) Derecognition:

A financial liability is derecognised
when the obligation under the liability
is discharged or 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 between the
carrying amount of the financial liability
derecognised and the consideration
paid is recognised in the Statement of
Profit and Loss.

3.16 Earnings per share

Basic earnings per share is computed by dividing
the net profit for the period attributable to the equity
shareholders of the Company by the weighted
average number of equity shares outstanding
during the period. The weighted average number
of equity shares outstanding during the period and
for all periods presented is adjusted for events,
such as bonus shares, other than the conversion
of potential equity shares that have changed the
number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings
per share, the net profit for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
is adjusted for the effects of all dilutive potential
equity shares.

4. CRITICAL ACCOUNTING JUDGEMENTS,
ASSUMPTIONS AND USE OF ESTIMATES

The preparation of the Company’s financial statements
requires management to make judgments, estimates
and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes
that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.

The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that
period or in the period of revision or future periods if the
revision affects both current and future periods.

Following are the critical judgements, assumptions
and use of estimates that have the most significant
effects on the amounts recognised in these financial
statements:

a) Useful lives of Property, plant & equipment (PPE),
Investment property and intangible assets:

The Company has adopted useful lives of PPE,
Investment property and intangible assets
as described in Note 3.3, 3.4 and 3.5 above.
Depreciation and amortisation are based on
management estimates of the future useful lives
of the PPE, Investment property and intangible
assets. Estimates may change due to technological
developments, competition, changes in market
conditions and other factors and may result in
changes in the estimated useful life and in the
depreciation and amortisation charges. The
Company reviews the estimated useful lives of
PPE, Investment property and intangible assets at
the end of each reporting period.

b) Leasehold land:

In respect of leasehold lands, considering the
terms and conditions of the leases, particularly in
respect of the transfer of substantially all risks and
rewards incidental to ownership of an asset, it is
concluded that they are in the nature of leases.

c) Investments in subsidiaries:

In the process of testing of impairment of
investment in a subsidiary where there are
indications, the Company is required to estimate

the value in use which is based on the future cash
flows, after taking into account past experience
and management’s best estimate about future
developments. The Company uses judgement in
selecting and estimating such inputs based on
historical data and existing market conditions as
well as forward looking estimates at the end of
each reporting period.

d) Defined employee benefit obligation:

The cost of post-employment benefits is
determined using actuarial valuations. An actuarial
valuation involves making various assumptions
that may differ from actual developments in
the future. These include the determination of
the discount rates; future salary increases and
mortality rates. Due to the complexities involved
in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in
these assumptions. All assumptions are reviewed
annually.

e) Expected credit losses on financial assets:

The impairment provisions of financial assets and
contract assets are based on assumptions about
risk of default and expected timing of collection.
The Company uses judgment in making
these assumptions and selecting the inputs
for the impairment calculation, based on the
Company’s past history of collections, customer’s
creditworthiness, existing market conditions as
well as forward looking estimates at the end of
each reporting period.

f) Recognition and measurement of provisions and
contingencies:

Provisions and liabilities are recognised in the
period when it becomes probable that there
will be a future outflow of funds resulting from

past operations or events and the amount of
cash outflow can be reliably estimated. The
timing of recognition and quantification of the
liability requires the application of judgement
to existing facts and circumstances, which can
be subject to change. The carrying amounts of
provisions and liabilities are reviewed regularly
and revised to take account of changing facts
and circumstances. In the normal course of
business, contingent liabilities may arise from
litigations and other claims against the Company.
Judgment is required to determine the probability
of such potential liabilities actually crystallising. In
case the probability is low, the same is treated as
contingent liabilities. Such liabilities are disclosed
in the notes but are not provided for in the financial
statements.

g) Income taxes:

Provision for current tax is made based on
reasonable estimate of taxable income computed
as per the prevailing tax laws. The amount of such
provision is based on various factors including
interpretation of tax regulations, changes in
tax laws, acceptance of tax positions in the tax
assessments etc.

h) Classification of investment:

The Company has contributed more than
20% equity shares in one company in order to
qualify for purchase of captive power. As per the
shareholders’ agreement, the Company does
not have any right to appoint or nominate any
director on the board of the said company and
also does not have any right to participate in the
financial and operating policy decisions. Hence,
the management has concluded that the said
company is not an associate of the Company.

7.1 Fair value of investment property

Fair valuation of investment property as at 31^st March, 2025 and 31^st March, 2024 has been arrived at on the basis
of valuation carried out by an independent valuer not related to the Company. The valuer is registered with the
authority which governs the valuers in India, and in the opinion of management he has appropriate qualifications
and recent experience in the valuation of properties. For the investment property, the fair value was determined
based on the capitalisation of net income method where the market rentals of all lettable units of the property are
assessed by reference to the rentals achieved in the lettable units as well as other lettings of similar properties in
the neighbourhood. The capitalisation rate adopted is determined by reference to the yield rates observed by the
valuers for similar property in the locality and adjusted based on the valuer’s knowledge of the factors specific to the
property. Thus, the significant unobservable inputs are as follows:

1. Monthly market rent, taking into account the difference in location, and individual factors, such as frontage and
size, between the comparable property and the property; and

2. Capitalisation rate, taking into account the capitalisation of rental income potential, nature of the property and
prevailing market conditions.

17.1 Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of ' 1 per share. Each shareholder is eligible for
one vote per share held and entitled to receive dividend as declared from time to time. In the event of liquidation of the
Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, in proportion
of their shareholding.

17.2 During the year, the Company has paid ' 3 per equity share as final dividend for the year ended 31^st March, 2024
aggregating to ' 32.96 Crores. In the preceding year, the Company had paid ' 2 per equity share as final dividend for
the year ended 31^st March, 2023 aggregating to ' 21.97 Crores.

The Board of Directors at its meeting held on 27^th May, 2025 have recommended payment of final dividend of ' 3
per equity share for the financial year ended 31^st March, 2025 aggregating to ' 32.96 Crores. The above is subject to
approval at the ensuing Annual General Meeting of the Company and is not recognised as a liability.

a) The vehicle loans are secured by way of hypothecation of respective vehicles purchased from the vehicle
loans.

b) The term loan is secured by way of first pari passu charge on specific movable fixed assets of the Company
pertaining to CMS, CACL2, TFE Plant, D PTFE Plant and FKM Plant located at 12/A, GIDC Dahej Industrial Estate,
Taluka - Vagra, District - Bharuch - 392130, Gujarat.

c) The term loan is secured by way of exclusive charge on specific movable fixed assets of the Company located
at Dahej pertaining to Fluoropolymers Plant, Common Utility Plant, AHF Plant, CPU Coal Based, CPU CCGT 4 &
5 Plant located at 12/A, GIDC Dahej Industrial Estate, Taluka - Vagra, District - Bharuch - 392130, Gujarat and
Speciality Chemicals Plant located at Survey No 16/3, 26 & 27, Village-Ranjitnagar 389380, Taluka-Ghoghamba,
District - Panchmahal, Gujarat.

d) The term loan was secured by way of first pari passu charge on specific movable fixed assets of the Company
pertaining to CMS, CACL2 & TFE Plant located at 12/A, GIDC Dahej Industrial Estate, Taluka - Vagra, District -
Bharuch - 392130, Gujarat.

e) The term loan was secured by way of first and exclusive charge by way of hypothecation of movable fixed
assets pertaining to Chloralkali Plant at Plot No 12A, GIDC Estate, Village-Dahej, Taluka-Vagra, District-Bharuch,
Gujarat.

f) The redeemable non-convertible debentures are secured by way of an exclusive first Charge by hypothecation
of movable assets of AHF & HCFC plant, ETP Plants and Common Utilities located at Survey No 16/3, 26 &
27, Village-Ranjitnagar 389380, Taluka-Ghoghamba, District-Panchmahal, Gujarat. As at 31^st March 2025, the
carrying value of the assets hypothecated is ' 68.51 crores which is more than 1.25 times the principal and
interest amount of the said secured non-convertible debentures.

g) The redeemable non-convertible debentures were secured by way of an exclusive first Charge by hypothecation
of movable assets of 14 MW Wind Power Project at Mahidad and AHF & HCFC plant located at Survey No 16/3,
26 & 27, Village-Ranjitnagar 389380, Taluka-Ghoghamba, District-Panchmahal, Gujarat. As at 31^st March 2024,
the carrying value of the assets hypothecated is ' 81.88 crores which is more than 1.25 times the principal and
interest amount of the said secured non-convertible debentures.

1) In respect of above Income tax, Excise duty, Customs duty and Sales tax matters, the Company has paid an amount
of ' 15.46 Crores (as at 31^st March 2024: ' 2.29 Crores) and not charged to the Standalone Statement of Profit and
Loss.

2) In respect of above matters, no additional provision is considered necessary as the Company expects favourable
outcome. Further it is not possible for the Company to estimate the timing and amounts of further cash outflows, if
any, in respect of these matters.

3) The Code on Social Security 2020 has been notified in the Official Gazette on 29^th September, 2020, which could
impact the contributions by the Company towards certain employment benefits. However, the date from which
the Code will come into effect has not been notified. The Company will assess and give appropriate impact in the
financial statements in the period in which the Code comes into effect.

38 COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
' 557.75 Crores (as at 31^st March, 2024: ' 717.23 Crores) including capital commitments for intangible assets of ' 28.09
Crores (as at 31^st March, 2024: ' 43.40 Crores).

39 SEGMENT INFORMATION

Information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and
assessment of segment performance focuses on single operating segment of 'Chemicals’ comprising of Bulk Chemicals,
Fluorochemicals & Fluoropolymers. Electricity generated by captive power plant is consumed in chemical business and
not sold outside. Hence, the Company has only one reportable business segment under Ind AS 108 "Operating segment".
The information is further analysed based on the different classes of products.

(a) Defined contribution plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees.
Contribution to Provident fund of ' 17.73 Crores (as at 31^st March, 2024: ' 13.57 Crores) is recognised as an expense
and included in Contribution to Provident & Other funds’ in the Standalone Statement of Profit and Loss and ' 0.66
Crores (as at 31^st March, 2024: ' 2.66 Crores) is included in pre-operative expenses.

(b) Defined benefit plans:

The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the
payment of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled
to the specified benefit. The level of benefits provided depends on the employee’s length of services and salary
at retirement age. The Company’s defined benefit plan is unfunded. There are no other post retirement benefits
provided by the Company.

The most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at 31^st
March, 2025 by Mr. Charan Gupta, fellow member of the Institute of the Actuaries of India. The present value of the
defined benefit obligation, the related current service cost and past service cost, were measured using the projected
unit credit method.

44.3 Financial risk management

The Company’s principal financial liabilities comprise of borrowings, trade, other payables and lease liabilities. The
main purpose of these financial liabilities is to finance the Company’s operations including acquisition of PPE and
ROU. The Company’s principal financial assets include loans, trade and other receivables, cash and cash equivalents
and other bank balances. The Company also holds investments at FVTPL.

The Company’s corporate finance function provides services to the business, coordinates access to financial market,
monitors and manages the financial risks relating to the operations of the Company through internal risk reports
which analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency
risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company doesn’t enter into or trade,
financial instruments including derivative financial instruments for speculative purpose. The Board of directors of the
Company has taken all necessary actions to mitigate the financial risks identified on the basis of current information
and circumstances.

(I) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risks: foreign currency risk, interest rate risk and
other price risk. Financial instruments affected by market risk include borrowings, investments, trade and other
payables, trade and other receivables, security deposits given, loans given to subsidiary etc.

i) Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to
changes in foreign exchange rates. The Company is subject to the risk that changes in foreign currency
values will impact the Company’s export revenues, imports of material/capital goods, services/royalty and
borrowings etc. Exchange rate exposures are managed by entering into foreign currency forward contracts,
options and swaps, as and when required.

The aim of the Company’s approach to management of currency risk is to leave the Company with
minimum residual risk, after considering the net foreign currency exposure.

Foreign currency sensitivity analysis

The Company is mainly exposed to foreign exchange risk arising from currency exposures, with respect to
US Dollar and Euro.

The following table details the Company’s sensitivity to a 10% increase and decrease in ' against the
relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally
to key management personnel and represents management’s assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes unhedged external borrowings,
payables, receivables and loans in currency other than the functional currency of the Company.

10% appreciation of the respective foreign currencies with respect to functional currency (i.e. INR) of the
Company would have led to additional impact in the Standalone Statement of Profit and Loss. A 10%
depreciation of the respective foreign currencies would have led to an equal but opposite effect.

through the impact of rate changes on interest-bearing liabilities. The Company manages its interest rate
risk by monitoring the movements in the market interest rates closely. Hedging activities are also evaluated
regularly to align with interest rate views and defined risk appetite, ensuring that the most cost-effective
hedging strategies are applied.

The Company is exposed to interest rate risk mainly on account of term loans from banks having both
fixed and floating interest rates. Bank cash credit facilities, certain short-term rupee loans and short-term
foreign currency borrowings carry a floating rate of interest. The risk is managed by the Company by
maintaining an appropriate mix between fixed and floating-rate borrowings. The financial assets i.e., bank
fixed deposits are at a fixed rate of interest.

Interest rate sensitivity analysis

The sensitivity analysis has been determined based on the exposure to floating interest rates at the end
of the reporting year for non-current borrowings. For floating rate borrowings, the analysis is prepared
assuming that the amount of the liability at the end of the reporting year was outstanding for the whole
year. If interest rates had been 50 basis points higher or lower and all other variables were held constant,
the Company’s profit/loss for the year ended 31^st March 2025 would decrease/increase by ' 1.77 crores
(net of tax) (for the year ended 31^st March 2024, decrease /increase by ' 1.47 Crores (net of tax)).

(iii) Other price risks

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market
traded price. The Company is exposed to equity price risks arising from equity investments. Investments
in equity instruments are in subsidiaries, joint venture and other company which are held for strategic
purposes rather than trading purposes. The Company does not actively trade in these investments. The
Company’s investment in mutual funds are in debt funds. Hence the Company’s exposure to other price
risk is minimal.

(II) Credit risk management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Company. The Company is exposed to credit risk for trade receivables, cash and cash equivalents,
investments, other bank balances, loans, other financial assets and financial guarantees.

Credit risk arising from balances with banks is limited because the counterparties are reputed banks. Further,
investments in mutual funds are in debt funds of reputed mutual fund houses.

a) Trade receivables

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy,
procedures and control relating to customer credit risk management. The average credit period on sales of
products is less than 90 days. The concentration of credit risk is limited due to the fact that the customer
base is large and diverse. There is no external customer representing more than 10% of the total balance
of trade receivables. All trade receivables are reviewed and assessed for default on a quarterly basis.

For external trade receivables, as a practical expedient, the Company computes credit loss allowance
based on a provision matrix. The provision matrix is prepared based on historically observed default rates
over the expected life of trade receivables and is adjusted for forward-looking estimates. The provision
matrix at the end of the reporting period is as follows:

(ii) Interest rate risk management

Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rate. The Company is exposed to interest rate risk

b) Loans and other financial assets

The Company applies Expected Credit Losses (ECL) model for measurement and recognition of loss
allowance on the loans given by the Company to the external party. ECL is the difference between all
contractual cash flows that are due to the Company in accordance with the contract and all the cash flows
that the Company expects to receive (i.e., all cash shortfalls), discounted at the effective interest rate.

The Company determines if there has been a significant increase in credit risk of the financial asset
since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal
to 12-month ECL is measured and recognised as loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is measured and recognised as loss allowance.

12-month ECL are a portion of the lifetime ECL which result from default events that are possible within
12 months from the reporting date. Lifetime ECL are the expected credit losses resulting from all possible
default events over the expected life of a financial asset.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined
by a range of outcomes, taking into account the time value of money and other reasonable information
available as a result of past events, current conditions and forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as expense/income
in the Standalone Statement of Profit and Loss under the head 'Other expenses’/’Other income’.

c) Guarantees provided by the Company

The maximum amount of exposure in respect of guarantees/securities provided by the Company for fund-
based and non-fund-based facilities availed by the subsidiary, step-down subsidiary and other related
parties amounts to ' 462.62 crores (as at 31^st March, 2024: ' 1,613.14 crores) - see Note 45. Based on
the past trends and expectation and conditions available at the end of the reporting period, the Company
considers that it is more likely than not that such an amount will not be payable under the guarantees
provided.

(III) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established
an appropriate liquidity risk management framework for the management of the Company’s short, medium and
long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and
actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Liquidity risk table

The following table details the remaining contractual maturity for its financial liabilities with agreed repayment
periods from the reporting date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.

47 (b) Disclosure required under section 186(4) of the Companies Act, 2013
A) In respect of related parties:

(i) The inter-corporate deposits outstanding Nil (as at 31^st March, 2024: ' 45.00 Crores) to GFCL EV Products
Limited were unsecured and given for business purpose. The inter-corporate deposits was repayable after
2 years from the respective date of deposits and carried interest @ 7.50% p.a. The inter-corporate deposits
have been entitrely repaid during the year.

(ii) The inter-corporate deposits outstanding of ' 12.15 Crores (as at 31^st March, 2024: '9.30 Crores) to GFCL
Solar and Green Hydrogen Products Limited are unsecured and given for business purpose. The inter¬
corporate deposits are repayable on 27^th April, 2026 and carry interest @ 7.50% p.a.

(iii) The inter-corporate deposits outstanding of ' 10.48 Crores (as at 31^st March, 2024: ' 10.23 Crores) to
Gujarat Fluorochemicals FZE are unsecured and given for business purpose. The inter-corporate deposits
are repayable on demand and carry interest @ 7.00% p.a.

(iv) For details of Investments made - see Note 9

(v) For Corporate guarantees/securities given by the Company - see Note 45

48 With respect to the fire incident in December 2021 at Ranjitnagar plant, the Company had recognised a total amount of
' 70.21 Crores towards insurance claim lodged in that year. After the receipt of interim claim amount, sale of related scrap
etc. the balance amount as at 31^st March, 2025 is ' 41.87 Crores (as at 31^st March, 2024'47.76 crores). The insurance
company is in the process of determining the final claim amount. Difference, if any, which in the opinion of management
may not be significant, will be recognised upon the final determination of the claim amount.

49 SLUMP SALE OF ENERGY UNDERTAKING:

Pursuant to the approval of the Board of Directors of the Gujarat Fluorochemicals Limited ("the Company") at their meeting
held on 26^th December, 2024, the Company has sold its Energy Undertaking (57 MW captive wind power plant) to IGREL
Mahidad Limited, a wholly-owned subsidiary of the Company, on a slump-sale basis for a lump sum consideration of
' 200.00 Crores vide Business Transfer Agreement ("BTA") on 6^th January, 2025. The consequent gain on slump sale of
' 1.22 Crores is shown under note 28 "Other income".

Subsequently on 11^th February 2025, IGREL Mahidad Limited has allotted additional equity shares to the Company and
also to an external investor and consequently, the Company’s holding in IGREL Mahidad Limited is reduced to 26.25% and
it has ceased to be a subsidiary from that date. Further, as per the shareholders’ agreement, the Company does not have
any right to appoint or nominate any director on the board of the IGREL Mahidad Limited and also does not have any right
to participate in the financial and operating policy decisions of that company. Hence, the management has concluded that
the said company is not an associate of the Company.

b) Details of benami property held

No proceedings have been initiated or are pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made thereunder.

c) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies
Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

d) Compliance with approved Scheme(s) of Arrangements

During the year, there is no Scheme of Arrangement that has been approved by the Competent Authority in terms of
sections 230 to 237 of the Companies Act, 2013.

e) Undisclosed income

There is no income surrendered or disclosed as income during the current or preceding 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), that has not been recorded in the books of account.

f) Details of crypto currency or virtual currency

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

g) Utilisation of borrowed funds and share premium

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 or entity, including foreign entities ("Intermediaries") with the
understanding (whether recorded in writing or otherwise) that the Intermediary shall, whether, directly or indirectly
lend or invest in other persons/ entities identified in any manner whatsoever by or on behalf of the Company ('ultimate
beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities ("Funding Party"),
with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

h) In case of borrowings from banks or financial institutions

i) Utilisation of borrowed funds

At the balance sheet date, the Company has used the borrowings from banks and financial institutions for the
specific purpose for which it was taken.

ii) Security of current assets against borrowings

The Company does not have any borrowings from banks on the basis of security of current assets.

iii) Wilful defaulter

The Company is not declared wilful defaulter by any bank or financial institution or other lender.

iv) Registration of charges or satisfaction with Registrar of Companies

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

i) Loans and advances granted to related party

The company has not granted any loans or advances in the nature of loans without specifying any terms or period
of repayment either severally or jointly with any other person. The company has granted loans repayable on demand
and the details are as under:

As per our report of even date attached

FOR PATANKAR & ASSOCIATES FOR GUJARAT FLUOROCHEMICALS LIMITED

Chartered Accountants
Firm's Reg. No: 107628W

SANDESH S MALANI V. K. JAIN DR. BIR KAPOOR

Partner Managing Director Dy. Managing Director

Membership No. 110051 DIN: 00029968 DIN: 01771510

Place: Pune Place: Noida Place: Noida

Dated: 27^th May, 2025

MANOJ AGRAWAL B. V. DESAI

Chief Financial Officer Company Secretary

Place: Noida Place: Vadodara

Dated: 27^th May, 2025