n) Provisions, Contingent Liabilities and Contingent
Assets

A provision is recognised when the Company has
a present obligation as a result of past events
and it is probable that an outflow of resources will
be required to settle the obligation in respect of
which a reliable estimate can be made. Provisions
(excluding retirement benefits) are not discounted
to their present value and are determined based
on the best estimate required to settle the
obligation at the balance sheet date. These
are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that
arises from past events whose existence will 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 recognized because it is not probable
that an outflow of resources will be required
to settle the obligation. A contingent liability
is not recognized but its existence is disclosed
in the financial statements. Contingent assets
are not recognised and disclosed only when an
inflow of economic benefits is probable in the
financial statements.

o) Taxation

Tax expense comprise of current and deferred
tax. Current income tax comprises taxes on
income from operations in India. Income tax
payable in India is determined in accordance with
the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on temporary
differences between the carrying amounts of
assets and liabilities in the standalone financial
statements and the corresponding tax bases used
in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are
generally recognised for all deductible temporary
differences to the extent that it is probable that
taxable profits will be available against which
those deductible temporary differences can be
utilised. In addition, deferred tax liabilities are
not recognised if the temporary difference arises
from the initial recognition of goodwill.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have
been enacted or substantively enacted by the
balance sheet date.

Current and deferred tax are recognised in
statement of profit & loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity, in
which case, the current and deferred tax are also
recognised in other comprehensive income or
directly in equity respectively.

Advance taxes and provisions for current income
taxes are presented in the balance sheet after
off-setting advance taxes paid and income tax
provisions arising in the same tax jurisdiction
and the Company intends to settle the asset
and liability on a net basis. The Company offsets
deferred tax assets and deferred tax liabilities if
it has a legally enforceable right and these relate
to taxes on income levied by the same governing
taxation laws.

p) Earnings Per Share

Basic earnings per share are calculated by
dividing the net profit or loss for the period
attributable to equity shareholders (after
deducting preference dividends and attributable
taxes, if any) by the weighted average number
of equity shares outstanding during the period.
Partly paid equity shares are treated as fraction
of an equity share to the extent that they are
entitled to participate in dividends relative to
a fully paid equity share during the reporting
period. The weighted average number of equity
shares outstanding during the period is adjusted
for events such as bonus issue, bonus element
in right issue, share split and reverse share split
(consolidation of 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 or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of
all dilutive potential equity shares.

q) Non-Current Assets held for Sale

The Company classifies non-current assets (or
disposal group) as held for sale if their carrying
amounts will be recovered principally through a
sale rather than through continuing use. Actions
required to complete the sale should indicate
that it is unlikely that significant changes to the
sale will be made or that the decision to sell will
be withdrawn. Management must be committed
to the sale expected within one year from the
date of classification. The criteria for held for
sale classification is regarded met only when
the assets is available for immediate sale in its
present condition, subject only to terms that are
usual and customary for sales of such assets, its
sale is highly probable; and it will genuinely be
sold, not abandoned.

The Company treats sale of the asset to be highly
probable when:

• The appropriate level of management is
committed to a plan to sell the asset,

• An active programme to locate a buyer and
complete the plan has been initiated (if
applicable),

• The asset is being actively marketed for sale
at a price that is reasonable in relation to its
current fair value,

• The sale is expected to qualify for recognition
as a completed sale within one year from the
date of classification, and

• Actions required to complete the plan
indicate that it is unlikely that significant
changes to the plan will be made or that the
plan will be withdrawn.

Non-current assets held for sale are measured
at the lower of their carrying amount and the
fair value less costs to sell. Assets and liabilities
classified as held for sale are presented separately
in the balance sheet.

An impairment loss is recognised for any initial
or subsequent write-down of the assets to fair
value less cost to sell. A gain is recognised for any
subsequent increases in the fair value less cost to
sell of an assets but not in excess of the cumulative
impairment loss previously recognised, A gain or
loss previously not recognised by the date of sale
of the non-current assets is recognised on the
date of de-recognition.

Property, plant and equipment and intangible
assets once classified as held for sale are not
depreciated or amortised.

r) Operating Cycle

All assets and liabilities have been classified as
current or non-current as per the Company's
normal operating cycle and other criteria set out
in Schedule III to the Companies Act, 2013. Based
on the nature of product and the time between
acquisition of assets for processing and their
realization in cash and cash equivalents, the
Company has ascertained its operating cycle
as 12 months for the purpose of current/non-
current classification of assets and liabilities.

s) Cash Flow Statement

Cash flows are reported using the indirect
method, whereby profit / (loss) before tax is
adjusted for the effects of transactions of non¬
cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash
flows from operating, investing and financing

activities of the Company are segregated based
on the available information.

t) Use of Estimates:

The preparation of financial statements are in
conformity with the recognition and measurement
principles of Ind AS which requires management
to make critical judgments, estimates and
assumptions that affect the reporting of assets,
liabilities, income and expenditure.

Estimates and underlying assumptions are
reviewed on an ongoing basis and any revisions
to the estimates are recognised in the period
in which the estimates are revised, and future
periods are affected.

Key source of estimation of uncertainty at the
date of financial statements, which may cause
material adjustment to the carrying amount of
assets and liabilities within the next financial
year, is in respect of:

1. Useful lives of property, plant and equipment
(refer note no. 4b & 6,7 & 9)

2. Recognition of Revenue over a period of time
(refer note no. 4i & 27)

5. Recent Pronouncements

The Ministry of Corporate Affairs (MCA) notifies
new standards or amendments to the existing
standards under the Companies (Indian
Accounting Standards) Rules as issued from
time to time. For the year ended on March 31,
2025, the MCA has notified Ind AS 117 Insurance
Contracts and amendments to Ind AS 116 Leases,
relating to sale and leaseback transactions,
applicable to the Company effective from April
01, 2024. The Company has evaluated the new
pronouncements or amendments and there is no
material impact on its Financial Statements.

On May 7, 2025, MCA notifies the amendments
to Ind AS 21 - Effects of Changes in Foreign
Exchange Rates. These amendments aim to
provide clearer guidance on assessing currency
exchangeability and estimating exchange rates
when currencies are not readily exchangeable.
The amendments are effective for annual periods
beginning on or after April 1, 2025. The Company
is currently assessing the probable impact of
these amendments on its financial statements.

Compensated absences and earned leaves

The Company's current policy permits eligible employees to accumulate compensated absences up to a
prescribed limit and receive cash in lieu thereof in accordance with the terms of the policy.

Defined Benefit Plans

The Company operates a defined benefit plan in form of gratuity plan covering eligible employees, which
provide a lump sum payment to vested employees at retirement, death, incapacitation or termination of
employment, of an amount based on the respective employees salary and the tenure of employment.

Other long term employee benefit plan

Through its gratuity plans the Company is exposed to a number of risks, the most significant of which are
detailed below:

These plans typically expose the Company to actuarial risks such as investment risk, interest rate risk,
longevity risk and salary risk.

Investment risk

The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a
discount rate which is determined by reference to market yields at the end of the reporting period on government
bonds. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities
and other debt instruments.

Note 36: Employee Benefits (Contd.)

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an
increase in the return on the plan's debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after their employment. An increase in the life expectancy of the
plan participants will increase the plan's liability.

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the plan liability.

In respect of the Defined Benefit Obligation Plan and Compensated absences and earned leaves, the most
recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March
31,2025. 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.

Note 39: Financial Instruments (Contd.)

(b) Interest rate risk

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's policy is to maintain a balance of
fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined
by current market interest rates. The borrowings of the Company are principally denominated in Indian
Rupees and US dollars with mix of fixed and floating rates of interest. These exposures are reviewed by
appropriate levels of management at regular interval. The company have outstanding borrowings of
C220.74 Crore and C265.23 Crore at the end of March 31, 2025 and March 31, 2024 respectively.

As at March 31, 2025, NIL of the Company's Borrowings are at fixed rate of interest (March 31, 2024 : NIL).

The impact of increase / (decrease) of 50 basis points in interest rates would result in (decrease) / increase
of C1.37 Crore and C1.59 Crore in the Company's net profit before tax for the year ended March 31, 2025
and March 31, 2024 respectively.

(c) Commodity price risk

The Company is exposed to price volatality of certain commodities being raw materials for which the
Company has developed risk management framework aimed at prudently managing the risk arising from
volatility in commodity prices. The commodity risk is managed by entering into procurement contracts
for the commodities either in advance or on a back to back basis at or about the same price levels basis
which the sales orders are booked.

(d) Other price risk

The Company is not exposed to price risks arising from its investments.

39.3.2 Credit risk management

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to
the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk
of deterioration of creditworthiness as well as concentration of risks. Financial instruments that are subject to
concentrations of credit risk materially consists of trade receivables.

All trade receivables are subject to credit risk exposure. The Company's exposure to credit risk is influenced
mainly by the individual characteristics of each customer. The demographics of the customer, including the
default risk of the industry and country, in which the customer operates, also has an influence on credit risk
assessment. Credit risk is managed through established policies, controls relating to credit approvals and
procedures for continuously monitoring the creditworthiness of customers to which the Company grants credit
terms in the normal course of business. The Company does not have significant concentration of credit risk
related to trade receivables except the details given below for the customers contribute to more than 5% of
total outstanding accounts receivable as at any reporting period end.

At March 31, 2025, the Company has 6 customers (March 31, 2024: 5 customers) that owed the Company
amounting to C67.29 Crore (March 31, 2024: C79.51 Crore) aggregating to 36% (March 31, 2024: 33%) of the
total amount receivable.

Exposure to credit risk:

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk is C348.99 Crore and C322.76 Crore as at March 31, 2025 and March 31, 2024 respectively, being the
total of the carrying amount of balances with banks, bank deposits, trade receivables, other financial assets
and investments excluding investments in subsidiary companies, and these financial assets are of good credit
quality including those that are past due.

39.3.3 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 and banking facilities by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the Company's remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table
below include only principal cash flows in relation to non-derivative financial liabilities.

The remuneration of directors and key executives is determined by the remuneration committee having
regard to the performance of individuals and market trends.

Transactions / balances with related party having equal to / exceeding 10% of each nature of transactions
is considered as material and have been disclosed separately as above.

The Company has given guarantee to bankers for the loans taken by a subsidiary as mentioned in note 24.2.
Terms and conditions of transactions with Related Parties

Outstanding balances of related parties at the year end are unsecured and settlement occurs in cash.
There have been no guarantees provided or received for any related party receivables or payables. During
the current year, the Company has not recorded any impairment of receivables relating to amounts owed
by related parties. This assessment is undertaken each financial year through examining the financial
position of the related party and the market in which the related party operates.

45.1 a) The Company did not have any Benami property, where any proceeding has been initiated or pending

against the Company for holding any Benami property.

b) The Company did not have any transactions with companies struck off.

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

d) The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

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

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

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

(i) 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

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

h) The Company has no such transactions which are not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income
Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

45.2 The Ministry of Corporate Affairs (MCA) has issued a notification (Companies (Accounts) Amendments
Rules, 2021) which is effective from April 01, 2023, state that every Company registered in India which uses
accounting software for maintaining its books of account shall use only such accounting software which has a
feature of recording audit trail of each and every transaction, and further creating an edit log of each change
made in the books of account along with the date when such changes were made and ensuring that the audit
trail cannot be disabled.

The Company uses a SaaS ERP as a primary accounting software for maintaining books of account, which has
a feature of recording audit trail edit logs facility and that has been operative throughout the financial year
for the transactions recorded in the software impacting books of account at application level. The database
of the software is operated by third party software service provider hence audit trail at the database level
is not applicable. The audit trail has been preserved by the Company as per the statutory requirements for
record retention.

45.3 The Company evaluates events and transactions that occur subsequent to the balance sheet date but
prior to the approval of financial statements to determine the necessity for recognition and / or reporting of
subsequent events and transactions in the financial statements. As of May 21, 2025 there were no subsequent
events and transactions to be recognised or reported that are not already disclosed.

As per Ind AS 108 "Operating Segments" issued by the Institute of Chartered Accountants of India, if financial
statements contains standalone financial statements and consolidated financial statements, no separate
disclosure on segment information is required to be given in the standalone financial statements. Accordingly,
segment information has been given in the Consolidated Financial Statements of the Company.

Note 47: Proposed Dividend

The Board of Directors, in their meeting held on May 21, 2025 have recommended a final dividend of C1 per
share, subject to approval by shareholders of the Company.

Note 48: Approval of financial statements

The financial statements for the year ended March 31, 2025 were approved for issue by the Board of Directors
on May 21, 2025.

For and on behalf of the Board of Directors of GMM Pfaudler Limited

Prakash Apte Tarak Patel

Chairman Managing Director

DIN: 00196106 DIN: 00166183

Mumbai, May 21, 2025 Mumbai, May 21, 2025

Alexander Poempner Mittal Mehta

Chief Financial Officer Company Secretary

FCS 7848

Mumbai, May 21, 2025 Mumbai, May 21, 2025