3.14 Provisions and contingencies

The Company recognises 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
recognise 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 Standalone 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 or loss
(FVTPL), its transaction costs are recognised
in the Standalone 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
Standalone 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,
joint ventures and associates. Such
financial assets are subsequently
measured at fair value at each reporting
date. Fair value changes are recognised
in the Standalone Statement of Profit
and Loss. Dividend income on the
investments in equity instruments is
recognised as 'other income’ in the
Standalone 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 Standalone 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 expire;

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 recognise such
financial asset to the extent of its continuing
involvement in the financial asset. In that
case, the Company also recognises 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.

I n 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 Standalone
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 Standalone 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 Standalone 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 the
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 through 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 Standalone
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 judgements, 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 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

Notes:

(i) I n the preceding year, the Company had contributed more than 20% equity shares in IGREL Mahidad
Ltd. ("IGREL") in order to qualify for purchase of captive power. However, considering the terms of the
shareholders’ agreement, the management had concluded that IGREL was not an associate of the
Company. During the current year, the Company has made further investment in IGREL by way of 0.01 %
non-cumulative, optionally convertible redeemable preference shares. In view of this additional investment,
the management has reassessed the classification of investments made in IGREL and has now reclassified
the same as investments in associate.

(ii) The Joint venture of the Company has not commenced its business activities. The investment in the Joint
venture continues to be fully impaired based on the management’s assessment of its current status and
financial position.

Note: The OCRPS carry a non-cumulative dividend of 0.01% per annum, payable on the annual anniversary of
allotment net of applicable tax deducted at source. They are redeemable at the sole option of the Issuer within
20 years from allotment (extendable to 30 years by mutual consent), subject to the written consent of the
Issuer’s Senior Lenders.

The Company has made investments in 0.01% Non-Cumulative, Optionally Convertible, Participating
Redeemable Preference Shares ('OCRPS’) issued by its two associate companies with whom the Company
has entered into a long-term power purchase agreements. The transaction value of the OCRPS exceeds the fair
value at initial recognition and the difference is recognised as 'Power Advances’, a non-financial asset reflecting
prepaid consideration for captive power benefits under the integrated commercial arrangement. The amount
of 'Power Advances’ is amortised on a units-of-production method, on the basis of estimated total offtake
over the period of the underlying contract. The particulars and the movement in the amounts recognised in the
standalone financial statements are as under:

(*) Amount will be credited to Investor Education and Protection Fund as and when due.

(#) Includes dues to micro enterprises and small enterprises (see Note 41).

(@) The Company has utilised the Trade Receivable Discounting System (TReDS) platform for its MSME suppliers. As per
this arrangement, the financers make payments directly to such MSME suppliers and the Company settles the obligation
with the respective financers on due date. The nature and function of the liabilities remain the same even after factoring
as the Company is not legally released from its original obligation. Hence, the Company has continued to recognise the
liabilities which are factored and disclosed the same as a separate line item under 'Other current financial liabilities’.

The entire outstanding amounts of supplier credit has already been received by suppliers from the third-party financer and
the entire outstanding amount is unsecured. The credit period for participating suppliers ranges from 60-90 days, which is
comparable to the credit period offered by other suppliers. The interest paid during the year is included in 'Finance costs’
and the rate of interest is in the range of 5.55% p.a. to 6.75% p.a. (previous year 6.74% to 7.00% p.a.). There are no non¬
cash changes in the carrying amounts of the said financial liabilities.

Security:

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 was 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 redeemable non-convertible debentures were 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.

38 COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)
' 400.55 Crores (as at 31^st March, 2025: ' 557.75 Crores) including capital commitments for intangible assets of ' 14.05
Crores (as at 31^st March, 2025: ' 28.09 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 & Fluoropolymer. 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 segments".
The information is further analysed based on the different classes of products.

Note: I he Company has entered into a long-term Power Purchase Agreement ( PPA) with a power
generation company for purchase of power under captive regulation, wherein the power company shall
sell all the available capacity generated from the designated wind mills/solar to the Company. As per the
PPA, while the tariff per unit is fixed, it is linked to the number of units of delivered energy. Delivered Energy
units are variable in nature and are dependent on generation and supply. This results in the entire payment
made towards purchase of power by the Company as variable in nature. Accordingly, the Company at the
inception of PPA, cannot measure the lease liability at the present value of the lease payments that are not
paid at that date. Since the variable payments as per the PPA are made towards the purchase of power, the
same have been included under the natural head 'Power & fuel’.

44 FINANCIAL INSTRUMENTS:44.1 Capital management

The Company manages its capital structure with a view that it will be able to continue as going concern while
maximising the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of total equity of the Company and debt. The Company is not subject
to any externally imposed capital requirement. The Company has complied with the financial covenants in respect of
its borrowings.

The Company’s risk management committee reviews the capital structure of the Company. As part of this review, the
committee considers the cost of capital and risk associated with each class of capital.

(c) Compensated absences:

The Company’s employees are entitled to compensated absences which can be accumulated and encashed in
accordance with the Company’s policy. The liability towards compensated absences as at 31 March 2026 has
been determined based on an actuarial valuation carried out using the "Projected Unit Credit Method". The actuarial
valuation has resulted in a net increase in liability of ' 5.65 Crores for the year ended 31^st March, 2026 (31^st March,
2025: ' 1.34 Crores), which is net of ' 0.53 Crores (previous year: Nil) on account of adjustment arising from transfer
of employees to a subsidiary company.

Notes:

1) Debt consists of total borrowings and interest accrued thereon (Note 19 and 23), and excludes lease
liabilities (Note 42).

2) Cash and bank balances include cash & cash equivalents (Note 15) and other bank balances (Note 16)
(excluding margin money deposits, fixed deposits kept as security and balance in unclaimed dividend
account).

3) Total equity is defined as equity share capital (Note 17) and other equity (Note 18).

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 information and
present 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 payables,
trade and other receivables and loans 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 within approved policy parameters 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. ') 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.

(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 rates. The Company is exposed to interest rate risk through
the impact of rate changes on interest-bearing liabilities. The Company monitors movements in market
interest rates and evaluates its financing arrangements on an ongoing basis to manage the exposure to
fluctuations in interest rates. 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/others
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. Financial
assets such as bank fixed deposits carry fixed rates of interest and therefore are not exposed to
significant variability in cash flows due to changes in market interest rates.

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 2026 would decrease/increase by ' 0.90 crores
(net of tax) (for the year ended 31^st March 2025, decrease /increase by ' 1.77 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
prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific
to the individual instrument or its issuer, or factors affecting all similar instruments traded in the market.

The Company is exposed to equity price risk arising from its investments in equity instruments of
subsidiaries, associates and joint ventures. Further, during the year, the Company has invested in 0.01%
Non-cumulative, Optionally Convertible Redeemable Preference Shares (OCRPS) of associates for strategic
and long-term business purpose i.e. for power purchase. These investments are held for strategic and
long-term business purposes rather than for trading, and accordingly the Company does not actively trade
in such investments. In view of the strategic nature of the Company’s investments, management considers
the Company’s overall exposure to other price risks to be 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.

The Company’s exposure to credit risk in respect of investments in OCPRS is limited, having regard to the
long-term strategic nature of the arrangement and the associate relationship with the investee entities.

(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 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:

(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 recognized as loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is measured and recognized 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) recognized during the period is recognized 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 ' 505.25 crores (as at 31^st March, 2025: ' 462.62 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 committee of Board of Directors for
operations, 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.

Particulars of contractual maturities in respect of lease liabilities is as per Note 42.

The amounts of guarantees given on behalf of subsidiary, step-down subsidiary and other related parties
included in Note 45 represents the maximum amount the Company could be forced to settle for the full
guaranteed amount. Based on the expectation at the end of the reporting year, the Company considers that it is
more likely than not that such an amount will not be payable under the arrangement.

The above liabilities will be met by the Company from internal accruals, realization of current and non-current
financial assets (other than strategic investments). Further, the Company also has unutilised borrowing facilities.

ii) Fair Value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures
are required)

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial
statements are a reasonable approximation of their fair values since the Company does not anticipate that the
carrying amounts would be significantly different from the values that would eventually be received or settled.

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 of ' 14.65 Crores (as at 31^st March, 2025: 12.15 Crores) to GFCL
Solar and Green Hydrogen Products Limited are unsecured and given for general business purpose. The
intercorporate deposits are repayable on 27^th April, 2028 and carry interest @ 7.50% p.a.

(ii) The inter-corporate deposits outstanding of ' 29.17 Crores (as at 31^st March, 2025: 10.48 Crores) to Gujarat
Fluorochemicals FZE are unsecured and given for general business purpose. The inter-corporate deposits
are repayable on demand and carry interest @ 7.00% p.a.

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

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

Note:

1) The above inter-corporate deposit is given for general business purposes and is repayable at call.

2) During the year, the Company has recognised a provision for impairment of inter-corporate deposits
amounting to ' 9.00 crores (Previous year: Nil).

48 With respect to the fire incident in December 2021 at Ranjitnagar plant, the Company had recognized 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 of such amount as at 31^st March, 2026 is ' 39.09 Crores (as at 31 March 2025'41.87 crores).
The company has received ' 11.16 crores on 24^th April, 2026 towards full and final claim for loss of PPE. The insurance
company is in the process of determining the final claim amount for loss of profit. The difference, if any, which in the
opinion of management may not be significant, will be recognized upon the final determination of the claim amount.

49 Slump sale of Energy Undertaking during the financial year ended 31st March 2025:

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") dated 6^th January 2025. The consequent gain on slump sale of
' 1.22 Crores was disclosed under note 28 "Other income" in the previous year.

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 had ceased to be a subsidiary from that date.

50 CORPORATE SOCIAL RESPONSIBILITY (CSR)

The gross amount required to be spent by the Company during the year towards CSR is ' 21.15 Crores (31^st March, 2025:
' 22.87 Crores).

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

There is no Scheme of Arrangements 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 other
than investments made aggregating to ' 6.53 crores (previous year ' Nil) in Gujarat Fluorochemicals Singapore Pte.
Limited, wholly-owned subsidiary, in the ordinary course of business and in keeping with the applicable regulatory
requirements for onward funding to a step-down subsidiary of the Company, GFL GM Fluorspar SA (a wholly-
owned subsidiary of Gujarat Fluorochemicals Singapore Pte. Limited), towards meeting its business requirements.
Accordingly, no further disclosures in this regard are required.

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: