Notes to Accounts of Gujarat Fluorochemicals Ltd.

Mar 31, 2025

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.

44.1 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 debt and total equity of the Company. 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.

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.

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 represent 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, realisation of current and non-current
financial assets (other than strategic investments). Further, the Company also has unutilised borrowing facilities.

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

---

Mar 31, 2024

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 pretax 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 profit or 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, 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.

This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. 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 profit or 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 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 forwardlooking estimates are updated.

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) Derecognition of financial liabilities :

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 Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

3.17 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 Company’s financial statements requires management to make judgements, estimations and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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) Fair value measurements and valuation processes :

Some of the Company’s assets are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. When the fair values of financial assets recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation technique that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values.

e) 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

benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed annually.

f) 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.

g) 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.

h) 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.

7.1 Fair Value of Investment Property

Fair valuation of Investment Property as at 31^st March, 2024 and 31^st March, 2023 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 are made 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 and the property; and

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

38. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) '' 71,722.66 Lakhs (as at 31^st March, 2023: '' 56,321.06 Lakhs).

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 business 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 is having only one reportable business segment under Ind AS 108 on "Operating segment". The information is further analysed based on the different classes of products.

43. Employee benefits

(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees. Contribution to Provident fund of '' 1,357.30 Lakhs (as at 31^st March, 2023: '' 1,154.53 Lakhs) is recognised as an expense and included in ''Contribution to Provident & Other funds’ in the Statement of Profit and Loss and '' 266.04 Lakhs (as at 31^st March, 2023: '' 187.43 Lakhs) 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, 2024 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. 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 optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt and total equity of the Company. 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.

44.3 Financial risk management

The Company’s financial assets comprise mainly of loans, cash and cash equivalents, other balances with banks, trade receivables and other receivables and financial liabilities comprise mainly of borrowings, trade payables, other payables and lease liabilities.

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 situation present.

44.4 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 : interest rate risk, currency risk and other price risk. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. Financial instruments affected by market risk include borrowings, investments, trade payables and trade receivables.

44.5 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 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.

44.5.1 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 INR 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.

A 10% strengthening of the INR against key currencies to which the Company is exposed would have led to additional impact in the Statement of Profit and Loss. A 10% weakening of the INR against these currencies would have led to an equal but opposite effect.

44.6.1 Interest rate sensitivity analysis

The sensitivity analysis below 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, 2024 would decrease/increase by '' 146.70 Lakhs (net of tax) (for the year ended 31^st March, 2023, decrease /increase by '' 51.62 Lakhs (net of tax)).

44.7 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. Other price risk arises from financial assets such as investments in quoted equity instruments and mutual funds. The Company does not have any quoted equity instrument and mutual funds as at end of the reporting period. Further, equity investments in subsidiaries and joint venture are held for strategic rather than trading purposes and the Company does not actively trade these investments. Thus, the exposure to risk of changes in market rate is minimal.

44.8 Credit risk management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, balances with banks, loans and other receivables.

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:

44.6 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 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 the most cost-effective hedging strategies are applied.

The Company is exposed to interest rate risk mainly on account of its borrowings, which have 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.

b) Loans and other receivables

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 Statement of Profit and Loss under the head ''Other expenses’/’Other income’.

c) Other financial assets

Credit risk arising from balances with banks is limited because the counterparties are reputed banks.

44.9 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.

44.9.1 Liquidity and interest 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.

44.10.2 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.

45. Related party disclosures

(A) Where control exists :

Ultimate controlling party

Mr. V. K. Jain

Holding company

Inox Leasing and Finance Limited

Subsidiary companies

Gujarat Fluorochemicals Americas LLC, U.S.A. (GFL Americas LLC)

Gujarat Fluorochemicals GmbH, Germany (GFL GmbH, Germany)

Gujarat Fluorochemicals Singapore Pte. Limited

GFL GM Fluorspar SA - wholly-owned subsidiary of GFL Singapore Pte. Limited

Gujarat Fluorochemicals FZE

GFCL EV Products Limited

GFCL Solar and Green Hydrogen Products Limited

IGREL Mahidad Limited (incorporated on 14^th March, 2024)

GFCL EV Products Americas LLC - wholly-owned subsidiary of GFCL EV Products Limited (incorporated on 28^th February, 2024)

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 Nil (previous year '' 2055.39 Lakhs) 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-

52. Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013 (Contd.)

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 :

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 D. K. JAIN V. K. JAIN

Partner Chairman Managing Director

Mem No:110051 DIN:00029782 DIN:00029968

Place: Pune Place: Noida Place: Noida

Dated: 6^th May, 2024

MANOJ AGRAWAL B. V. DESAI

Chief Financial Officer Company Secretary Place: Noida Place: Vadodara

Dated: 6^th May, 2024

---

Mar 31, 2023

7.1 Fair Value of Investment Properties

Fair valuation of Investment Properties as at 31^st March, 2023 and 31^st March, 2022 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 all Investment properties, fair value was determined based on the capitalisation of net income method where the market rentals of all lettable units of the properties 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 are made by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the valuer’s knowledge of the factors specific to the respective properties. 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 and the property; and

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

17.2 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.

17.3 During the year, the Company has paid '' 2 per equity share as final dividend for the year ended 31^st March, 2022 aggregating to '' 2,197.00 Lakhs and '' 2 per equity share as interim dividend aggregating to '' 2,197.00 Lakhs. In the preceding year, the Company had paid '' 2 per equity share as an interim dividend for the year ended 31^st March, 2022 aggregating to '' 2,197.00 Lakhs.

The Board of Directors at its meeting held on 5^th May, 2023 have recommended payment of final dividend of '' 2 per equity share for the financial year ended 31^st March, 2023 aggregating to '' 2,197.00 Lakhs. The above is subject to approval at the ensuing Annual General Meeting of the Company and is not recognised as a liability.

The cash flow hedge reserve represented the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments designated as cash flow hedge. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedge reserve will be reclassified to profit or loss when the hedged transaction affects the profit or loss, included as a basis adjustment to the non -financial hedged item, or when it becomes ineffective.

a) The term loan is 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.

b) The vehicle loans are secured by way of hypothecation of vehicles.

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

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

e) The redeemable non-convertible debentures are secured by way of an exclusive first Charge by hypothecation of movable assets 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. The carrying value of the assets hypothecated is '' 8,801.31 Lakhs as at 31^st March, 2023.

f) The term loans were secured by way of exclusive charge on specific movable fixed assets of the Company located at Dahej pertaining to CMS, CACL2 & TFE Plant, DPTFE Plant and FKM Plant , CPU COAL BASED & CPU CCGT 4 & 5 Common Plant Utility located at 12/A, GIDC Dahej Industrial Estate, Taluka - Vagra, District - Bharuch -392130, Gujarat.

g) The foreign currency term loan was secured by way of an exclusive first ranking security interest/mortgage/ hypothecation on movable and immovable assets including cash flow receivables and escrow account of 14 MW Wind Power Project at Mahidad. Further, the lender has exclusive first charge on movable fixed assets of AHF & HCFC plant located at Survey No 16/3, 26 & 27, Village - Ranjitnagar 389380, Taluka - Ghoghamba, District -Panchmahal, Gujarat.

37. Contingent liabilities ('' in Lakhs)
Sr. No.	Particulars	As at 31st March, 2023	As at 31 st March, 2022
a	In respect of Income Tax matters -
i)	Demand on account of additions made in assessment order for A.Y. 201718 on benchmarking of corporate guarantee, benchmarking on margin on sale of goods, disallowance of deduction u/s 80-IA, etc.	1,819.19	1,819.19
")	Demand on account of additions made in assessment order for A.Y. 201819 on benchmarking of investment in foreign subsidiaries, disallowance of deduction u/s 80-IA, etc.	2,192.19
in)	Penalty u/s 271AA(1) for failure to keep / maintain information and documents in respect of international transactions for A.Y. 2018-19.	1,464.82	-
iv)	Demand on account of addition made in assessment order for A.Y. 201516 on depreciation charged at higher rate on windmills.	-	26.83
	Total of Income tax matters	5,476.20	1,846.02
b	In respect of Excise Duty matters -
i)	Dispute for which the Company has received various show cause notices regarding input credit on certain items and freight charges recovered from buyers for supply of goods at buyers’ premises. The Company has filed the replies.	930.88	930.88
ii)	Demands on account of CENVAT credit availed on certain items, levy of excise duty on freight recovered from customers and credit transfer to Dahej Unit on inter unit transactions. The Company has filed appeals before CESTAT.	2,669.32	2,682.06
	Total of Excise Duty matters	3,600.20	3,612.94
c	In respect of Custom Duty matters -
i)	Demands for which the Company had received show cause notices regarding inadmissible EPCG benefit on consumables imported. The Company has filed replies in this regard.	11.82	11.82
ii)	Demands on account of differential custom duty on imported material on high seas basis. The Company has filed appeals before CESTAT and the matters are pending.	1,372.12	1,372.12
iii)	Demand due to failure to produce/late submission of Export obligation certificates. Matter is pending before Deputy Commissioner of Customs for examining the export obligation discharge certificate submitted.	1,240.12
iv)	Demands for which the Company had received show cause notice for wrong classification for import of flanges (part of wind operated electricity generator). The Company has filed reply in this regard.	55.63
	Total of Custom Duty matters	2,679.69	1,383.94
d	In respect of Sales Tax matters -
i)	Demands under VAT on account of disallowance of proportionate Input tax credit on Capital Goods.	6.00	6.00
ii)	Demands under CST on account of disallowance of proportionate Input tax credit on Capital Goods.	49.33	49.33
iii)	Demands under CST on account of non-submission of form C.	57.56	64.20
	The Company has filed appeals before appropriate appellate authorities against the said orders.
	Total of Sales Tax matters	112.89	119.53
e	In respect of GST matters
i)	Show cause notice for short payment of GST. 23.43		-
ii)	Show cause notice for penalty for short payment of GST on import services.	16.96	-
	Total of GST matters	40.39	-
	Total Contingent Liability in respect of taxation matters	11,909.37	6,962.43

('' in Lakhs)
Sr. No.	Particulars	As at 31st March, 2023	As at 31 st March, 2022
f	In respect of Other matters
i)	Details of corporate guarantees given to banks and financial institutions for loans taken by a subsidiary, step down subsidiary and fellow subsidiaries and working capital facilities of the Company used by fellow subsidiaries.	1,76,943.22	1,84,239.66
	Total Contingent Liability in respect of Other matters	1,76,943.22	1,84,239.66

Notes:

1 In respect of above Excise duty, Custom duty and Sales tax matters, the Company has paid an amount of '' 263.31 Lakhs (as at 31^st March, 2022: '' 163.45 Lakhs) and not charged to 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. Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) '' 56,321.06 Lakhs (as at 31^st March, 2022: '' 17,721.71 Lakhs).

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 business 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 is having only one reportable business segment under Ind AS 108 on "Operating segment". The information is further analysed based on the different classes of products.

B. Company as a lessor

a) Operating Lease for Investment Property :

Operating leases relate to investment property transferred and vested with the Company pursuant to demerger, with lease terms between 11 to 60 months and are usually renewable by mutual consent. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. Lessee does not have an option to purchase the property at the expiry of the lease period.

43. Employee benefits(a) Defined Contribution Plans:

The Company contributes to the Government managed provident & pension fund for all qualifying employees. Contribution to Provident fund of '' 1,154.53 Lakhs (as at 31^st March, 2022: '' 999.31 Lakhs) is recognised as an expense and included in ''Contribution to Provident & Other funds’ in the Statement of Profit and Loss and '' 187.43 Lakhs (as at 31^st March, 2022: '' 59.79 Lakhs) 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, 2023 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.

Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

This plan typically expose the Company to actuarial risks such as interest rate risk and salary risk

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: the present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, a variation in the expected rate of salary increase of the plan participants will change the plan liability.

(iv) Sensitivity Analysis

Significant actuarial assumptions for the determination of defined obligation are discount rate and expected salary increase. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

(c) Other short term and long term employment benefits:Annual leave and short term leave

The liability towards compensated absences (annual and short term leave) for the year ended 31^st March, 2023 based on actuarial valuation carried out by using Projected unit credit method resulted in increase in liability by '' 282.78 Lakhs (as at 31^st March, 2022: '' 114.20 Lakhs), which is included in the employee benefits in the Statement of Profit and Loss.

44. Financial instruments44.1 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 optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt and total equity of the Company. 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.

1) Debt is defined as non-current borrowings, current borrowings, current maturities of non-current borrowings and interest accrued thereon (Note 19 and 23), and excludes lease liability.

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 interim dividend payable account and unclaimed dividend account).

The Company’s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, trade receivables and other receivables and financial liabilities comprise mainly of borrowings, trade payables, other payables and lease liabilities.

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 seeks to minimise the effects of currency and interest rate risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company’s risk management policies approved by the Board of Directors of the Company, which provide written principles on foreign exchange risk, interest

rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments and the investment of the excess liquidity. Compliance with policies and exposure limits is reviewed internally on a continuous basis. 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 situation present.

44.4 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 : interest rate risk, currency risk and other price risk. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. Financial instruments affected by market risk include borrowings, investments, trade payables, trade receivables and derivative financial instruments.

44.5 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 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.

Foreign exchange transactions are covered within limits placed on the amount of uncovered exposure, if any, at any point in time. The aim of the Company’s approach to management of currency risk is to leave the Company with minimised residual risk.

44.5.1 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.

A 10% strengthening of the '' against key currencies to which the Company is exposed (net of hedge) would have led to additional impact in the Statement of Profit and Loss. A 10% weakening of the '' against these currencies would have led to an equal but opposite effect.

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 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 evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

As per the Company’s risk management policy to minimise the interest rate cash flow risk on foreign currency longterm borrowings, interest rate swaps are taken for most of the borrowings to convert the variable interest rate risk into rupee fixed interest rate. As at the year end, there are no foreign currency long-term borrowings. Bank overdraft/cash credit facility and certain short-term rupee loans and short-term foreign currency borrowings carry a floating rate of interest. The Company is exposed to interest rate risk mainly on account of its non-current borrowings, which have both fixed and floating interest rates. The financial assets i.e., bank fixed deposits are at a fixed rate of interest.

44.6.1 Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to floating interest rates for noncurrent borrowings at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. For floating rate borrowings, a 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

I f 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, 2023 would decrease/increase by '' 51.62 Lakhs (net of tax) (for the year ended 31^st March, 2022, decrease /increase by '' 191.11 Lakhs (net of tax)). This is mainly attributable to the Company''s exposure to interest rates on its floating rate borrowings.

44.6.2 Interest Rate Swap Contracts

Under interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Company to mitigate the risk of changing interest rates. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.

The interest rate swaps settle on quarterly basis. The floating rate on the interest rate swaps is the local interbank rate of India.

All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Company''s cash flow exposures resulting from variable interest rates on borrowing. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount accumulated in equity is reclassified to profit or loss over the period that floating rate interest payments on debt affect profit or loss.

The line-items in the standalone financial statements that include the above hedging instruments are "Other financial assets "and "Other financial liabilities".

44.7 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. Other price risk arises from financial assets such as investments in quoted equity instruments and mutual funds. The Company does not have any quoted equity instrument and mutual funds as at end of the reporting period. Further, equity investments in subsidiaries and joint venture are held for strategic rather than trading purposes and the Company does not actively trade these investments. Thus, the exposure to risk of changes in market rate is minimal.

44.8 Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, balances with banks, loans and other receivables.

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.

b) Loans and other receivables

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 Statement of Profit and Loss under the head ''Other expenses’/’Other income’.

c) Other financial assets

Credit risk arising from balances with banks is limited because the counterparties are banks.

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.

44.10 Fair Value Measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

The remuneration of directors and Key Management Personnel (KMP) is determined by the Nomination and Remuneration Committee having regard to the performance of individuals and market trends. As the liabilities for the defined benefit plans and other long term benefits are provided on actuarial basis for the Company, the amount pertaining to KMP are not included above. Contribution to Provident Fund (defined contribution plan) is '' 36.26 Lakhs (previous year '' 30.36 Lakhs) included in the amount of remuneration reported above.

Notes:

(a) Sales, purchases and service transactions with related parties are made at arm’s length price.

(b) Amounts outstanding are unsecured and will be settled in cash or receipts of goods and services.

(c) No expense has been recognised for the year ended 31^st March, 2023 and 31^st March, 2022 for bad or doubtful trade receivables in respect of amounts owed by related parties.

(d) During the previous year, the capital advance and interest thereon is transferred from Inox Green Energy Services Limited to Resco Global Wind Service Private Limited as a part of Business Transfer agreement.

(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 (31^st March, 2022: '' 3,500 Lakhs) to GFCL EV Products Limited were unsecured and given for business purpose. The inter-corporate deposits was repayable at call and carried interest @ 7.50% p.a.

(ii) The inter-corporate deposits outstanding of '' 630 Lakhs (31^st March, 2022: Nil) to GFCL Solar and Green Hydrogen Products Limited are unsecured and given for business purpose. The inter-corporate deposits are repayable after 2 years from date of deposit given and carry interest @ 7.50% p.a.

(iii) The inter-corporate deposits outstanding of '' 1,007.30 Lakhs (31^st March, 2022: Nil) 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. On 16^th December, 2021, there was a fire at the Company’s MPP Unit-2 plant at Ranjitnagar site in Gujarat. In this incident certain property, plant and equipment, inventory and other assets were damaged. The Company is adequately insured for the damaged facilities and also for loss of profits due to business interruption. The Company, on the basis of valid insurance contracts, had lodged claims with the Insurance Company. The survey and loss assessment by the insurance company is currently ongoing.

During the previous year ended 31^st March, 2022, the Company had derecognised the net book value of the damaged assets (including property, plant and equipment and inventories) of '' 4,256.98 Lakhs and expenses/loss pertaining to this incident (including estimated compulsory deductible by Insurance Company) amounting to '' 720.67 Lakhs had been expensed out. The Company had also recognised '' 2,788.73 Lakhs towards loss of profits due to business interruption. During the year, out of the total insurance claim lodged of '' 7,021.30 Lakhs (net of compulsory and other deductibles), the Company has received interim payment of '' 1,897.67 Lakhs from the Insurance Company and the balance amount of '' 5,123.63 Lakhs is included in "Other current financial assets" in the balance sheet. Differences, if any, will be recognised upon the final settlement of such claim.

49. Assets held for sale

Asset held for sale is in respect of an office building, which is expected to be sold within the period of 12 months.

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 '' 2,055.39 Lakhs during the year (previous year '' 5,135.30 Lakhs) 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:

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Mar 31, 2022

71 Fair Value of Investment Properties

Fair valuation of Investment Properties as at 31^st March, 2022 and 31^st March, 2021 have been arrived at on the basis of valuation carried out by an independent valuer, R.K Patel, who is a registered valuer as defined under Rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017 and is not related to the Company. In the opinion of management, he has appropriate qualifications and recent experience in the valuation of properties. For all investment properties, fair values have been determined based on the capitalised income projections, where the market rentals of all lettable units of the properties 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 made by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the valuer''s knowledge of the factors specific to the respective properties. 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 and the property; and

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

17.2 Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of C 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.

17.3 During the year, the Company has paid C 2 per equity share as interim dividend for the year ended 31^st March, 2022 aggregating to C 2,197.00 Lakhs.

The Board of Directors at its meeting held on 13^th May, 2022 have recommended a payment of final dividend of C 2 per equity share for the financial year ended 31^st March, 2022 aggregating to C 2,197.00 Lakhs. The above is subject to approval at the ensuing Annual General Meeting of the Company and is not recognised as a liability.

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments designated as cash flow hedge. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedge reserve will be reclassified to profit or loss when the hedged transaction affects the profit or loss, included as a basis adjustment to the non -financial hedged item, or when it becomes ineffective.

The tax rate used in the reconciliations above is the corporate tax rate of 25.168% payable under section 115BAA by corporate entities in India on taxable profits.

35.2 ''During the previous year, the Company had filed applications under Vivad se Vishwas Scheme in order to settle various income-tax matters for the assessment years 2007-08 to 2013-14, in respect of demerged Chemical Business Undertaking vested with the Company, which were being contested by the Income-tax Department before Hon''ble Supreme Court. The applications filed were accepted and accordingly the Company was required to pay 50% of disputed income-tax aggregating to C 2,944.18 Lakhs in respect of these years. The total impact of the settlement of C 68,974.22 Lakhs (mainly on account of reduction in MAT credit entitlement) was recognized and included in ''taxation pertaining to earlier years''.

Consequent to settlement of above income-tax matters and reversal of MAT credits, the Company has exercised the option under section 115BAA of the Income-tax Act, 1961 from the year ended 31^st March, 2021 and thus, applicable tax rate for the Company is 25.168% as against the earlier rate of 34.944%. Accordingly, the net deferred tax liability as on 1^st April, 2020 was also re-measured and the reduction of C 10,675.28 Lakhs in the deferred tax liability was recognized during the year ended 31^st March, 2021.

a) The foreign currency term loan is secured by way of an exclusive first ranking security interest/mortgage/hypothecation on movable and immovable assets including cash flow receivables and escrow account of 14 MW Wind Power Project at Mahidad. Further, the lender has exclusive first charge on movable fixed assets of AHF & HCFC plant located at Survey No 16/3, 26 & 27, Village Ranjitnagar 389380, Taluka Ghoghamba, District Panchmahal, Gujarat.

b) The term loan is 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.

36.1 Nature of securities and terms of repayment of secured term loans are as under

c) The vehicle loans are secured by way of hypothecation of vehicles.

d) The term loans are secured by way of exclusive charge on specific movable fixed assets of the Company located at Dahej pertaining to CMS, CACL2 & TFE Plant, DPTFE Plant and FKM Plant , CPU COAL BASED & CPU CCGT 4 & 5 Common Plant Utility located at 12A, GIDC Estate, Village - Dahej, Taluka - Vagra, District - Bharuch, Gujarat.

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

37. Contingent Liabilities			(H in Lakhs)
Sr. No.	Particulars	As at 31st March, 2022	As at 31st March, 2021
a	In respect of Income Tax matters -
i)	Demand on account of Addition made in assessment order for A.Y.2017-18 on Benchmarking of corporate guarantee, Benchmarking on Margin on sale of goods, Disallowance of deduction u/s 80-IA, etc.	1,819.19
ii)	Demand on account of addition made in assessment order for A.Y. 2015-16 on depreciation charged at higher rate on windmills. The Company has filed appeal before CIT(A), Vadodara.	26.83
	Total of Income Tax Matters	1,846.02	-
b	In respect of Excise Duty matters -
i)	Dispute for which the Company has received various show cause notices regarding input credit on certain items and freight charges recovered from buyers for supply of goods at buyers'' premises. The Company has filed the replies or is in the process of filing replies.	930.88	930.88
ii)	Demands on account of Cenvat credit availed on certain items, levy of excise duty on freight recovered from customers and credit transfer to Dahej Unit on inter unit transactions. The Company has filed appeals before CESTAT.	2,682.06	2,682.06
	Total of Excise Duty Matters	3,612.94	3,612.94
c	In respect of Custom duty matters -
i)	Demands for which the Company had received show cause notices regarding inadmissible EPCG benefit on consumables imported. The Company has filed replies in this regard.	11.82	11.82
ii)	Demands on account of differential custom duty on imported material on high seas basis. The Company has filed appeals before CESTAT and the matters are pending.	1,372.12	1,372.12
	Total of Custom Duty Matters	1,383.94	1,383.94
d	In respect of Sales Tax Matters -
i)	Demands under VAT on account of disallowance of proportionate Input tax credit on Capital Goods.	6.00	6.00
ii)	Demands under CST on account of disallowance of proportionate Input tax credit on Capital Goods.	49.33	49.33
iii)	Demands under CST on account of non-submission of C forms.	64.20	52.87
	The Company has filed appeals before appropriate appellate authorities against the said orders.
	Total of Sales Tax Matters	119.53	108.20
	Total Contingent Liability in respect of Taxation Matters	6,962.43	5,105.08
e	In respect of Other Matters
i)	Details of corporate guarantees/securities given to banks and financial institutions for loans taken by a step down subsidiary and fellow subsidiaries, lien on investments of the Company and working capital facilities of the Company used by fellow subsidiaries.	1,84,239.66	1,27,244.00
	Total Contingent Liability in respect of Other Matters	1,84,239.66	1,27,244.00

Notes:

1 In respect of above Excise duty, Custom duty and Sales tax matters, the Company has paid an amount of C 163.45 Lakhs (as at 31^st March, 2021: C 156.81 Lakhs) and not charged to Statement of Profit and Loss.

2 In respect of above matters, no additional provision is considered necessary as the Company expects favorable 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) C 17,721.71 Lakhs (as at 31^st March, 2021: C 8,168.52 Lakhs).

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 business segment of ''Chemicals'' comprising of Refrigeration gases, Caustic soda, Chloromethane, Polytetrafluoroethylene (PTFE), Fluoropolymers, Fluoromonomers, Specialty Fluorointermediates, Specialty Chemicals and allied activities. Electricity generated by captive power plant is consumed in chemical business and not sold outside. Hence the Company is having only one reportable business segment under Ind AS 108 on "Operating segment”. The information is further analysed based on the different classes of products.

B. Company as a lessor

Operating leases relate to investment properties transferred and vested with the Company pursuant to demerger, with lease terms between 11 to 60 months and are usually renewable by mutual consent. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. Lessee does not have an option to purchase the property at the expiry of the lease period.

43. Employee Benefits(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees. Contribution to Provident fund of C 999.31 Lakhs (as at 31^st March, 2021: C 849.11 Lakhs) is recognized as an expense and included in ''Contribution to Provident & Other funds'' in the Statement of Profit and Loss and C 59.79 Lakhs (as at 31^st March, 2021: Nil) 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, 2022 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.

Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

This plan typically expose the company to actuarial risks such as interest rate risk and salary risk

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: the present value of the defined benefit plan liability is calculated by reference to the future salaries of plan

participants. As such, a variation in the expected rate of salary increase of the plan participants will change the plan

liability.

43. Employee Benefits (Contd.)

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.

(c) Other short term and long term employment benefits

Annual leave and short term leave

The liability towards compensated absences (annual and short term leave) for the year ended 31^st March, 2022 based on actuarial valuation carried out by using Projected unit credit method resulted in increase in liability by C 114.20 Lakhs (as at 31^st March, 2021: C 70.21 Lakhs), which is included in the employee benefits in the Statement of Profit and Loss.

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 white maximising the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt and total equity of the Company. 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. The Company has a target gearing ratio of less than 100 % determined as the proportion of net debt to equity.

44.3 Financial risk management

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 seeks to minimize the effects of currency and interest rate risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the Board of Directors of the Company, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments and the investment of the excess liquidity. Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Company doesn''t enter into or trade financial instruments including derivative financial instruments for speculative purpose.

44.4 Market Risk

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company enters into the variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk including:

1. Interest rate swaps to mitigate the risk of rising interest rates

2. Principal only swaps, currency swaps, options and forwards contracts to mitigate foreign currency risk of foreign currency borrowings and receivables & payables in foreign currency.

44.5 Foreign Currency Risk Management

The Company is subject to the risk that changes in foreign currency values 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.

Foreign exchange transactions are covered within limits placed on the amount of uncovered exposure, if any, at any point in time. The aim of the Company''s approach to management of currency risk is to leave the Company with minimised residual risk.

44.5.1 Foreign Currency Sensitivity Analysis

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

The following table details the Company''s sensitivity to a 10% increase and decrease in INR 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 loans, receivables and payables in currency other than the functional currency of the Company.

44.6 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 because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

As per the Company''s risk management policy to minimize the interest rate cash flow risk on foreign currency long-term borrowings, interest rate swaps are taken for most of the borrowings to convert the variable interest rate risk into rupee fixed interest rate. Thus, there are no major interest rate risks associated with foreign currency long-term borrowings. The short-term foreign currency borrowings are at fixed rate of interest. Bank overdraft/cash credit facility and certain short-term rupee loans carry a variable rate of interest. The Company is exposed to interest rate risk mainly on account of its non-current borrowings, which have both fixed and floating interest rates. 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.

44.6.1 Interest Rate Sensitivity Analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for floating rate non-current borrowings at the end of the reporting period. For floating rate borrowings, 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s profit/loss for the year ended 31^st March, 2022 would decrease/increase by H 191.11 Lakhs (net of tax) (for the year ended 31^st March, 2021, decrease /increase by H 8.56 Lakhs (net of tax)). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

44.6.2 Interest Rate Swap Contracts

Under interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Company to mitigate the risk of changing interest rates. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.

The interest rate swaps settle on quarterly basis. The floating rate on the interest rate swaps is the local interbank rate of India.

All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Company''s cash flow exposures resulting from variable interest rates on borrowing. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount accumulated in equity is reclassified to profit or loss over the period that floating rate interest payments on debt affect profit or loss.

44. Financial instruments (Contd.)

The line-items in the standalone financial statements that include the above hedging instruments are “Other financial assets “and “Other financial liabilities”.

44.7 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. Other price risk arises from financial assets such as investments in quoted equity instruments and mutual funds. The Company does not have any quoted equity instrument as at end of the reporting period. Further, equity investments in subsidiaries and joint venture are held for strategic rather than trading purposes and the Company does not actively trade these investments. In respect of debt mutual funds, the exposure to risk of changes in market rates is low since the underlying investments are debt instruments. Thus, the exposure to risk of changes in market rate is minimal.

44.8 Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, balances with banks, loans and other receivables.

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.

b) Loans and other receivables

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 parties. 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 Statement of Profit and Loss under the head ''Other expenses''/''Other income''.

c) Other financial assets

Credit risk arising from balances with banks, investment in mutual funds and derivative financial instruments is limited because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the various credit rating agencies. There are no collaterals held against such investments.

44.9 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 longterm 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.

48. On 16^th December, 2021, there was a fire at the Company''s MPP Unit-2 plant at the Ranjitnagar site in Gujarat. In this incident, certain property, plant and equipment, inventory and other assets were damaged. The Company is adequately insured for the replacement value of the damaged facilities and also for loss of profits due to business interruption. The Company, on the basis of valid insurance contracts, has lodged initial claims with the insurance company in March 2022. The survey and loss assessment by the insurance company is currently ongoing.

The Company has derecognized the net book value of the assets (including property, plant and equipment and inventories) damaged of C 4,256.98 Lakhs and has also recognised C 2,788.73 Lakhs towards loss of profits due to business interruption. Expenses/loss pertaining to this incident (including estimated compulsory deductible by the insurance company) amounting to C 720.67 Lakhs has been expensed out and included in the “Other Expenses”. The amount of C 6,832.87 Lakhs recognized towards insurance claim lodged in respect of this fire incident is included in “Other current financial assets”. Difference, if any, will be recognized upon the final settlement of such claim.

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.

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 C 5,135.30 Lakhs during the year 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 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.

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Mar 31, 2021

6.1 Fair Value of Investment Properties

Fair valuation of Investment Properties as at 31^st March, 2021 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 all Investment properties, fair value was determined based on the capitalisation of net income method where the market rentals of all lettable units of the properties 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 made by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the valuer''s knowledge of the factors specific to the respective properties. 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 and the property; and

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

The cash flow hedge reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments designated as cash flow hedge. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedge reserve will be reclassified to profit or loss when the hedged transaction affects the profit or loss, included as a basis adjustment to the non -financial hedged item, or when it becomes ineffective.

The Company has elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019 with effect from 1^st April 2020. Thus, for the financial year 2020-21 the applicable tax rate for the company is 25.168% as against the earlier rate of 34.944%.

36.2 The Company has filed applications under Vivad se Vishwas Scheme in order to settle various income-tax matters for the assessment years 2007-08 to 2013-14, in respect of demerged Chemical Business Undertaking vested with the Company, which were being contested by the Income-tax Department before Hon''ble Supreme Court. The applications filed were accepted and accordingly the Company was required to pay 50% of disputed income-tax aggregating to H 2,944.18 lakhs in respect of these years. The total impact of the settlement of H 68,974.22 lakhs (mainly on account of reduction in MAT credit entitlement) is recognized and included in ‘tax pertaining to earlier years''.

36.2 (Contd..)

Consequent to settlement of above income-tax matters and reversal of MAT credits, the Company now proposes to exercise the option under section 115BAA of the Income-tax Act, 1961 from the current financial year ending 31^st March 2021 and thus, applicable tax rate for the Company will be 25.168% as against the earlier rate of 34.944%. Accordingly, the net deferred tax liability as on 1^st April 2020 is also re-measured and the reduction of H 10,675 lakhs in the deferred tax liability is recognized during the year.

36.3 Refer Note 1 and 51 for the demerger of the Chemical Business Undertaking transferred and vested with the Company w.e.f. 1^st April, 2019. After recording the assets and liabilities, acquired on demerger, at book values, the Company has reassessed and recomputed the deferred tax assets/liabilities which has resulted in increase in deferred tax liability by H 2,591.39 lakhs, on account of non-availability of benefits u/s 80IA of the Income-tax Act to the Company in respect of the demerged captive power plants, which was charged to the statement of profit and loss and included in ''tax pertaining to earlier years''. Further, on receipt of ITAT orders during the year, the Company is entitled to net incremental tax benefit of H 3,712.97 lakhs for earlier periods in respect of the demerged Chemical Business Undertaking vested with the Company which is also included in ‘tax pertaining to earlier years''.

a) ICICI Bank Limited: The foreign currency term loan from ICICI Bank Limited is secured by way of an exclusive first ranking security interest/mortgage/hypothecation on movable and immovable assets including cash flow receivables and escrow account of 14 MW Wind Power Project at Mahidad. Further, the lender has exclusive first charge on movable fixed assets of AHF & HCFC plant located at Survey No 16/3, 26 & 27, Village Ranjitnagar 389380, Taluka Ghoghamba, District Panchmahal, Gujarat.

b) The Hongkong and Shanghai Banking Corporation Limited: The foreign currency term loan from The Hongkong and Shanghai Banking Corporation was secured by way of first charge on pari-passu basis with Mizuho Bank Limited on immovable & movable assets of 36 MW Wind Power Project at Mahidad, Gujarat, and on movable fixed assets of DPTFE plant at Plot No 12A, GIDC Estate, Village-Dahej, Taluka-Vagra, District-Bharuch, Gujarat. Further, the lender had assignment of rights on pari-passu basis with Mizuho Bank Limited under the project agreements with respect to 36 MW Wind Power Project at Mahidad.

c) Mizuho Bank Limited: The foreign currency term loan from Mizuho Bank Limited, was secured by way of first charge on pari-passu basis with The Hongkong and Shanghai Banking Corporation Limited on immovable & movable assets of 36 MW Wind Power Project at Mahidad, Gujarat and on movable fixed assets of DPTFE plant at Plot No 12A, GIDC Estate, Village-Dahej, Taluka-Vagra, District-Bharuch, Gujarat. Further, the lender had assignment of rights on pari-passu basis with The Hongkong and Shanghai Banking Corporation Limited under the project agreements with respect to 36 MW Wind Power Project at Mahidad.

d) Kotak Mahindra Bank Limited: The term loan from Kotak Mahindra Bank Limited is 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.

e) Daimler Financial Services India Pvt. Limited: The vehicle loans from Daimler Financial Services India Pvt. Limited are secured by way of hypothecation of vehicles.

f) Kotak Mahindra Bank Limited: The working capital term loan from Kotak Mahindra Bank Limited is secured by way of first charge of hypothecation of movable fixed assets pertaining to A & H Plant at Plot No 12A, GIDC Estate, Village-Dahej, Taluka-Vagra, District-Bharuch, Gujarat.

g) HDFC Bank Limited: The term loan from HDFC Bank Ltd, is secured by way of exclusive first charge of hypothecation of specific tangible movable assets pertaining to CMS, CACL2 & TFE Plant at Plot No 12A, GIDC Estate, Village-Dahej, Taluka-Vagra, District-Bharuch, Gujarat.

h) Axis Finance Limited: The term loan from Axis Finance Limited was secured by way of first charge of lien on FMP/other select debt mutual funds of the Company.

i) HDFC Bank Limited: The term loan from HDFC Bank Limited is secured by way of exclusive charge on specific movable fixed assets of the Company pertaining to DPTFE Plant and FKM Plant, located at Dahej Plant, 121A, GIDC Dahej Industrial Estate, Taluka Vagra, District - Bharuch, Guiarat.

1 In respect of above Excise duty, Custom duty and Sales tax matters, the Company has paid an amount of H 156.81 Lakhs (as at 31^st March 2020: H 146.81 Lakhs) and not charged to 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 futher 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.

39. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) H 8,168.52 Lakhs (as at 31^st March 2020: H 9,263.41 Lakhs).

40. 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 business segment of ''Chemicals'' -comprising of Refrigeration gases, Caustic soda, Chtoromethane, potytetraftuoroethytene (PTFE), Ftuoropotymers, Ftuoromonomers, Specialty Ftuorointermediates, Specialty Chemicals and allied activities. Etectricity generated by captive power ptant is consumed in chemicat business and not sotd outside. Hence the Company is having onty one reportabte business segment under Ind AS 108 on "Operating segment”. The information is further anatysed based on the different ctasses of products.

43.LeasesA. Company as a lessee

(a) The Company''s significant leasing arrangements are in respect of leasehold lands. The Company has also taken certain plants and commercial premises on lease.

Effective 1^st April, 2019, the Company adopted Ind AS 116 "Leases" and applied the standard to all lease contracts existing on 1^st April, 2019 (transferred and vested with the Company on demerger - see Note 1 and 51) using the modified retrospective method. Consequently, the Company recorded the lease liability at the present value of the remaining lease payments discounted at the incremental borrowing rate as on the date of transition and had measured right of use asset an amount equal to lease liability. The Company was not required to restate the comparative information.

(b) On transition to Ind AS 116, the opening balances in ''Prepayment - leasehold lands'' (transferred and vested with the Company on demerger - see Note 1 and 51) were reclassifed as right-of-use assets.

The lease arrangements of the Company comprises of lease arrangments transferred and vested with the Company pursuant to demerger (see Note 1 and 51). The following is the summary of practical expedients elected on initial application of Ind AS 116:

1) Applied a single discount rate to a portfolio of leases with reasonably similar charactertistics.

2) Applied the exemption not to recognize right-of-use assets and liabilities for leases expiring within 12 months of lease term on the date of initial application.

3) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

4) Applied the practical expedient to apply Ind AS 116 to the contracts that were previously identified by the demerged company, as leases applying Ind AS 17: Leases and hence not reassessed whether a contract is, or contains, a lease at the date of the intial application.

The weighted average incremental borrowing rate applied to lease liabilities as at 1^st April, 2019 was 10% p.a.

The difference between the operating lease commitments disclosed applying Ind AS 17 as at 31^st March, 2019, discounted to the present value at the date of initial application of Ind AS 116, and the value of the lease liability as at 1^st April, 2019 (transferred and vested with the Company, pursuant to demerger), was on account of exclusion of short term leases.

B. Company as a lessor

Operating leases relate to Investment Properties transferred and vested with the Company pursuant to demerger, with lease terms between 11 to 60 months and are usually renewable by mutual consent. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. Lessee does not have an option to purchase the property at the expiry of the lease period.

As a lessor, the transition to Ind AS 116 ''Leases'' from Ind AS 17 ''Leases'' effective from 1^st April, 2019 does not have any impact on the financial statements of the Company. The Company has used the practical expedient to apply Ind AS 116 to the contracts that were previously identified as leases applying Ind AS 17: Leases, by the demerged company, and hence not reassessed whether a contract is, or contains, a lease at the date of the intial application.

44. Employee Benefits(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees. Contribution to Provident fund of H 849.11 Lakhs (as at 31^st March 2020: H 846.39 Lakhs) is recognized as an expense and included in ''Contribution to Provident & Other funds'' in the Statement of Profit and Loss.

(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, 2021 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.

Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

This plan typically expose the company to actuarial risks such as interest rate risk and salary risk

a) Interest risk: a decrease in the bond interest rate will increase the plan liability.

b) Salary risk: the present value of the defined benefit plan liability is calculated by reference to the future salaries of plan

participants. As such, a variation in the expected rate of salary increase of the plan participants will change the plan

liability.

(c) Other short term and long term employment benefits

Annual leave and short term leave

The liability towards compensated absences (annual and short term leave) for the year ended 31^st March, 2021 based on actuarial valuation carried out by using Projected unit credit method resulted in increase in liability by H 70.21 lakhs (as at 31^st March 2020: H 292.58 lakhs), which is included in the employee benefits in the Statement of Profit and Loss.

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 Company consists of net debt and total equity of the Company. 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. The Company has a target gearing ratio of less than 100 % determined as the proportion of net debt to equity.

45.3 Financial risk management

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 seeks to minimize the effects of currency and interest rate risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the Board of Directors of the Company, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments and the investment of the excess liquidity. Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Company doesn''t enter into or trade financial instruments including derivative financial instruments for speculative purpose.

45.4 Market Risk

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Company enters into the variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk including:

1. Interest rate swaps to mitigate the risk of rising interest rates

2. Principal only swaps, currency swaps, options and forwards contracts to mitigate foreign currency risk of foreign currency borrowings and receivables & payables in foreign currency.

45.5 Foreign Currency Risk Management

The Company is subject to the risk that changes in foreign currency values 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 in to foreign currency forward contracts, options and swaps.

Foreign exchange transactions are covered within limits placed on the amount of uncovered exposure, if any, at any point in time. The aim of the Company''s approach to management of currency risk is to leave the Company with minimised residual risk.

45.5. 1 Foreign Currency Sensitivity Analysis

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

The following table details the Company''s sensitivity to a 10% increase and decrease in INR 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 loans, receivables and payables in currency other than the functional currency of the Company.

A 10% strengthening of the INR against key currencies to which the Company is exposed (net of hedge) would have led to additional gain in the Statement of Profit and Loss. A 10% weakening of the INR against these currencies would have led to an equal but opposite effect.

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 because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

As per the Company''s risk management policy to minimize the interest rate cash flow risk on foreign currency long term borrowings, interest rate swaps are taken for most of the borrowings to convert the variable interest rate risk into rupee fixed interest rate. Thus, there is no major interest rate risks associated with foreign currency long term borrowings. The short term foreign currency borrowings are at fixed rate of interest. Certain rupee term loans and short term loans carry variable rate of interest. The financial assets i.e. bank fixed deposits are at a fixed rate of interest. Thus, the Company has no significant exposure to the risk of changes in the interest rate.

45.6. 1 Interest Rate Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for floating rate liabilities at the end of the reporting period. For floating rate liabilities in foreign currency, a 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s profit/loss for the year ended 31^st March, 2021 would decrease/increase by H 8.56 Lakhs (net of tax) (for the year ended 31^st March, 2020, decrease/increase by H 89.73 Lakhs (net of tax)). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

45.6. 2 Interest Rate Swap Contracts

Under interest rate swap contracts, the Company agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Company to mitigate the risk of changing interest rates. The fair value of interest rate swaps at the end of the reporting period is determined by discounting the future cash flows using the curves at the end of the reporting period and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.

The interest rate swaps settle on quarterly basis. The floating rate on the interest rate swaps is the local interbank rate of India.

AH interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the company''s cash flow exposures resulting from variable interest rates on borrowing. The interest rate swaps and the interest payments on the loan occur simultaneously and the amount accumulated in equity is reclassified to profit or loss over the period that floating rate interest payments on debt affect profit or loss.

The line-items in the Standalone balance sheet that include the above hedging instruments are "Other financial assets"and "Other financial liabilities".

45.7 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. Other price risk arises from financial assets such as investments in equity instruments and mutual funds. The Company is exposed to equity price risks arising from equity and equity based investments. Equity investments in subsidiaries and Joint Ventures are held for strategic rather than trading purposes and the Company does not actively trade these investments. In respect of debt mutual funds, the exposure to risk of changes in market rates is low since the underlying investments are debt instruments. The Company is exposed to price risk arising from investments in other equity based investments.

45.7. 1 Equity Price Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to equity price risks for equity oriented investments at the end of the reporting period.

If equity prices had been 5% higher/lower, profit/loss for the year ended 31^st March, 2021 would increase/decrease by H 3.12 Lakhs (for the year ended 31^st March, 2020 : increase/decrease by H 485.94 Lakhs) as a result of the change in fair value of equity investments which are designated as FVTPL.

45.8 Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, balances with banks, loans and other receivables.

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 receivables

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 parties. 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 Statement of Profit and Loss under the head ‘Other expenses''/''Other income''.

45. Financial instruments: (Contd..)

c) Other financial assets

Credit risk arising from balances with banks, investment in mutual funds and derivative financial instruments is limited because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the various credit rating agencies. There are no collaterals held against such Investments.

45.9 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 longterm 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.

The remuneration of directors and Key Management Personnel (KMP) is determined by the Nomination and Remuneration Committee having regard to the performance of individuals and market trends. As the liabilities for the defined benefit plans and other long term benefits are provided on actuarial basis for the Company, the amount pertaining to KMP are not included above. Contribution to Provident Fund (defined contribution plan) is H 22.80 lakhs (as at 31^st March 2020: H 23.23 lakhs) included in the amount of remuneration reported above.

Notes

(a) Sales, purchases and service transactions with related parties are made at arm''s length price.

(b) Amounts outstanding are unsecured and will be settled in cash or receipts of goods and services.

(c) No expense has been recognised for the year ended 31^st March, 2021 and 31^st March, 2020 for bad or doubtful trade receivables in respect of amounts owed by related parties.

50. Corporate Social Responsibility (CSR)

MCA has notified amendments relating to Corporate Social Responsibility (CSR) under Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 dated 22nd January 2021 where a company is mandatorily required to utilise the amount quantified for CSR activities as per provisions of the Companies Act, 2020, failing which the same needs to be transferred within a specified period to a fund specified in Schedule VII to the Companies Act, 2013. Consequent to these changes, the Company is now required to recognise a provision in the financial statements towards unspent amount of CSR obligations. Further, as per the legal opinion obtained by the Company, such mandatory obligation towards expenditure to be incurred on CSR in respect of the profits of the Chemical Business Undertaking (referred and vested in this Company as per note 1) is also on this Company.

51. Demerger of Chemical Business during the previous year

The Scheme of Arrangement (“the Scheme”) for the demerger of Chemical Business Undertaking from Gujarat Ftuorochemicats Limited, now known as GFL Limited (“the demerged company”) to Inox Ftuorochemicats Limited, now known as Gujarat Ftuorochemicats Limited (“the resutting company” or “the Company”) and the respective sharehotders of the two companies, under Sections 230 to 232 of the Companies Act, 2013 and att other appticabte provisions of the Companies Act, 2013 was approved by Honourabte Nationat Company Law Tribunat, Ahmedabad Bench on 4^th Juty 2019. The said NCLT Order was fited by both the companies with the Registrar of Companies on 16^th Juty, 2019 i.e. making the Scheme operative. Accordingty, att the assets and tiabitities pertaining to the Chemicat Business Undertaking, as defined in the Scheme, inctuding emptoyees and investment in subsidiaries and joint venture pertaining to the said Chemicat Business, stood transferred and vested into the Company from its Appointed Date i.e. 1^st Aprit 2019. Certain assets, particutarty the immovabte properties, are in the process of being registered in the name of the Company.

The demerger was accounted as per ''pooting of interest'' method in accordance with Appendix C of Ind AS 103 - Business Combinations, being common controt business combination.

Accordingty, fottowing effects were given in the books of account of the Company:

(i) Att the assets and tiabtities pertaining to the Chemciat Business Undertaking, transferred to and vested in the Company, were recorded at their respective carrying vatues as appearing in the books of the demerged company.

(ii) The Company had issued 10,98,50,000 futty paid-up equity shares of H 1 each to the sharehotders of the demerged company, for every one futty paid-up equity share of H 1 each hetd by them in the demerged company.

(iii) The pre-demerger sharehotding of the demerged company in the Company comprising of 1,00,000 futty paid-up equity share of H 1 each, were cancetted and the amount was credited to the capitat reserve.

(iv) The identity of the reserves transferred by the demerged company was preserved and were carried in the same form and manner by the Company.