Gujarat Alkalies & Chemicals Ltd Management Discussions

AN OVERVIEW OF ECONOMY - INDUSTRY STRUCTURE AND DEVELOPMENTS

GLOBAL ECONOMY #

India is estimated to be the fastest growing economy at 6.2 percent in 2025 and 6.3 percent in 2026 as per IMFs latest estimates. As per IMFs World Economic Outlook (WEO) April 2025, global economy would grow at 2.8 percent in 2025 and 3.0 percent in 2026. For advanced economies, growth under the reference forecast is projected to drop from 1.8 percent in 2024 to 1.4 percent in 2025 and 1.5 percent in 2026. The growth in emerging market and developing economies is forecasted to decline from 4.3 percent in 2024 to 3.9 percent in 2026. Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies. Core inflation is generally projected to decline more gradually in near future. The global economy is at a critical juncture, with significant internal and external imbalances and vulnerabilities.

INDIAN ECONOMY ##

Amid ongoing conflicts such as Israel-Gaza and Russia-Ukraine, geopolitical and trade headwinds remain strong. Although Indias economy is projected to grow by 6.2% in FY25 and 6.3% in FY26 - following a slight dip of 0.3% over 2024, it is likely to face challenges arising from geopolitical tensions, trade uncertainties, and potential commodity price shocks. Indias GDP is expected to reach the $4.19 trillion mark by 2025, reinforcing its position as the fourth-largest economy in the world.

Indias growth story continues to draw global attention, backed by strong fundamentals and consistent performance. Real GDP, which measures the economys output after removing the effects of inflation, expanded by 6.5 per cent in 2024 - 25. The Reserve Bank of India expects this pace to continue into 2025-26 navigating through the ongoing geological and trade risks. Other projections echo this optimism, with the United Nations forecasting growth of 6.3 per cent this year and 6.4 per cent next year, while the Confederation of Indian Industry places its estimate slightly higher at 6.40 to 6.70 per cent. $$ The chemical sector is a cornerstone of Indias industrial and economic landscape, with wide-ranging impacts across sectors including agriculture, manufacturing, healthcare, and exports to name a few. India stands as the 6 th largest producer of chemicals in the world and 3 rd in Asia, contributing 7% to Indias GDP. Chemicals and petrochemicals demand in India is expected to nearly triple and reach US$ 1 trillion by 2040. The Indian chemical industry is currently valued at US$ 220 billion and is expected to reach US$ 300 billion by 2030 and US$ 1 trillion by 2040. This industry remains an active hub of opportunities, even in an environment of global uncertainty. $$$ The Indian chemical industry is expected to further grow with a CAGR of 11-12% by 2027, increasing Indias share in the global specialty chemicals market to 4% from 3%. Covering more than 80,000 commercial products, Indias chemical industry is extremely diversified and can be broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilizers. The global chemical industry is undergoing a major transformation, driven by shifting supply chains, demand for specialty and green chemicals, and heightened focus on innovation and sustainability. Indias chemical sector, while significant in size and GDP contribution, remains fragmented and constrained by infrastructure gaps, regulatory inefficiencies, and low R&D intensity. Indias 3.5% share in global chemical value chains and its chemical trade deficit at USD 31 billion in 2023, underscores its high dependence on imported feedstock and specialty chemicals. However, with targeted reforms encompassing a comprehensive range of fiscal and non-fiscal interventions will enable India to have a USD 1 trillion chemical sector and achieve 12% GVC share by 2040, thus becoming a global chemical powerhouse.

The vision for 2030 is for India to become a global chemical manufacturing powerhouse with a 5-6% share of the global chemical value chain. The sector aims to double its current production levels and reduce the trade deficit significantly from USD 31 billion in 2023 to reach a Net Zero trade balance in Chemicals. The initiative will generate an additional export of USD 35-40 billion generating around 7 lakh skilled jobs. This growth will be supported by the development of world-class chemical clusters, advanced technology adoption, streamlined regulatory processes, and a highly skilled workforce, positioning India among the top global leaders in the chemical industry.

INDIAN ALKALI INDUSTRY AT A GLANCE

The installed capacity of Caustic Soda in the country is about 63.84 Lakhs MTPA as on 31.03.2025 as compared to 57.85 Lakhs MTPA as on 31.03.2024. Now, all the medium & large-scale Chlor-Alkali units have converted

# https://www.imf.org/external/datamapper/datasets/WEO

# https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

## https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154840&ModuleId=3

## https://www.pib.gov.in/PressReleasePage.aspx?PRID=2123826

$$ https://www.ibef.org/industry/chemical-industry-india

$$$ https://www.ibef.org/industry/chemical-industry-india

$$$ https://www.pib.gov.in/PressReleasePage.aspx?PRID=2141832

their plants to Membrane Cell Technology. The Membrane Cell process is energy efficient, as the power requirement is much less i.e. in the range of 2150-2200 kwh/MT, as compared to Mercury Cell Technology, where it is around

3150-3300 kwh/MT.

The additional capacity expansion during FY 2024-25 was approx. 6 Lakhs MTPA in India, by new start-up as well as expansion of existing Plants (Source: AMAI). The products of Chlor-alkali industry are the basic raw materials for various industries like Alumina, Paper & Pulp, Soap & Detergents, Dyes, Pharmaceuticals, Water Treatment chemicals, Pesticides and other Agrochemicals, etc.

THE CAUSTIC SODA MARKET SCENARIO

At present, there are 36 active Chlor-Alkali nits in India. The production of Caustic Soda during the FY 2024-25 has been about 50.54 Lakhs MT as against the total installed capacity of 63.84 Lakhs MTPA (as on 31.03.2025) i.e., capacity utilization is approx. 79. As against this, during the same period the Company has produced 7.53 Lakhs MT against the installed capacity of 8.50 Lakhs MTPA and achieved capacity utilization of 89 (including GNAL). Out of total 36 active Chlor-Alkali nits in India, the Company stands at Second position with a market share of about 16 having capacity utilization of 83 (including GNAL). the Company is the largest seller on Merchant Sales basis, during the FY 2024-25, among all Chlor-Alkali Players.

Out of India s total Caustic Soda capacity of 63.84 Lakhs MTPA as on 31.03.2025, West one alone has 40.47 Lakhs MTPA i.e. 63.39 while East one has 4.63 Lakhs MTPA i.e. 7.25, North one has 5.28 Lakhs MTPA i.e. 8.27 and South one has 13.46 Lakhs MTPA i.e. 21.08.

During FY 2024-25, the Caustic Soda (CSL, CSF & CSP)

Exports were about 5.98 Lakhs MT as compared to 4.76 Lakhs MT in FY 2023-24, i.e. an increase of about 26. During FY 2024-25, the Caustic Soda (CSL & CSF) imports were about 1.65 Lakhs MT as compared to 2.47 Lakhs MT in FY 2023-24 i.e. a decrease of about 33. Throughout the FY 2024-25, the prices of Chlor-Alkali products have been under pressure due to various geographical issues as well as moderate demand from all key segments. However, the Caustic Soda segment shows improvement and recovered from S 330 to 425 PMT, in rupee terms, it is now Rs.37000/MT from Rs.28000/MT or lower. As the Company is a multi-product Company, having more than 36 products in the basket, yet the major revenues are coming from Caustic Soda group and therefore market scenario of Caustic Soda and Chlorine market is of utmost important to the Company.

Looking to the market scenario, decent growth is expected in coming years, from all the key segments of Caustic Soda.

ABOUT THE COMPANY

The Company was established in 1973 and over a period of time, it has emerged as one of the largest producers of Caustic Soda in India with present installed production capacity of 8,49,750 lakhs MTPA (including GNAL) of

Caustic Soda as on 31 st March, 2025 and enjoys the economies of scale. The Company has about 16 share in the domestic Caustic Soda market.

The Company has implemented elaborate Environment Management System (EMS), uality Management System (MS), Occupational Health & Safety management System

(OH&S) & Energy Management System (EnMS) and has embarked on continual improvement. The Company has achieved ISO 9001:2015, ISO 14001:2015, 45001:2018 and

ISO 50001:2018 Integrated Management System Certificates. The uality Policy of the company reflects its emphasis and commitments. Since inception, your Company has from time to time, expanded its operations in Chlor-Alkali Sector and also diversified into several higher end products, through forward & backward integrations. The Company was the first Indian Company to replace the Mercury Cell Technology with environment friendly and energy efficient

Membrane Technology way back in the year 1989.

The Company has always ensured upgrading and adapting to eco-friendly & green technologies while it ensured the optimum capacity utilization during the FY 2024-25 at Vadodara Complex. The Company has achieved capacity utilization of 83 and in some other products viz. Chloromethanes (82), Hydrogen Peroxide (111), Phosphoric Acid (100), Food Grade Phosphoric Acid (99), Sodium Chlorate (107), Poly Aluminum Chloride (92), Potassium Carbonate (106) & Anhydrous Aluminum Chloride (83). Being a chemical manufacturing Company, the Company carries its passion for protecting the environment at every stage of its operations, keeping in view the interests of Customers, Shareholders, Employees,

Society, other Stakeholders and Mother Nature.

The Company s products basket comprises of Caustic

Soda (Lye, Flakes/ Prills), Chloromethanes, Liquid Chlorine, Hydrochloric Acid, Hydrogen Peroxide, Anhydrous Aluminum Chloride, Caustic Potash (Lye & Flakes), Potassium Carbonate (Granules & Powder), Aluminium Chloride,

Phosphoric Acid, Food Grade Phosphoric Acid, Chlorinated Paraffin, Poly Aluminium Chloride (various grades), Chlorotoluene, Sodium Chlorate, Hydrazine Hydrate etc. The major revenues are derived from Caustic Soda Group and therefore, Caustic Soda and Chlorine market scenario has a wide impact on the Company s performance. The Company s products are used by various industries like Textiles, Pulp & Paper, Alumina, Soaps & Detergents, Water Treatment, Petroleum, Plastics, Fertilizers, Pharmaceuticals,

Agrochemicals, Plant Protection, Dyes & Dyes Intermediates,

Refrigeration Gases, Epoxy etc. and it has marked its presence across the globe even against stiff international competition by exporting its world class products viz. Caustic

Soda Flakes, Caustic Soda Prills, Potassium Carbonate,

Potassium Hydroxide Flakes, Hydrogen Peroxide, Liquid

Chlorine, Phosphoric Acid, Aluminium Chloride, PAC, Hydrochloric Acid and CPW to Europe, West Asia, South East Asia, Africa, Middle East/Far East, SAARC countries etc. Production of Caustic Soda by electrolysis process is highly power intensive and the Company devised a sustainable strategy to meet its growing energy demands. Besides

90 MW Gas based Captive Co-generation Power Plant and participation in a 145 MW oint Captive Gas based Power Plant of GIPCL, the Company has taken major initiative for green energy by setting up Wind Farms for a total installed capacity of 171.45 MW as on 31 st March 2025. The Company has already installed 35 MW of Solar Power Plant. With this, the aggregate renewable energy capacity is 207.87 MW including 171.45 MW of Wind Power capacity generating more than 287 million units of renewable power during the year. The Company has also installed floating Solar Power Plant having capacity of 640 W and Solar Rooftop installations having 220 W Solar Rooftop installations at Dahej complex and 563 W Solar Rooftop Power Plants installed at Vadodara Complex.

BUSINESS, OPERATIONS & FINANCIAL PERFORMANCE

The total production (excluding power generation) has increased by 3.18 to 21,11,229 MT during the Financial Year 2024-25 from 20,46,173 MT in previous financial year. The production of Caustic Soda Lye, Caustic Soda Flakes,

Caustic Soda Prills, Chloromethanes, Potassium Hydroxide,

Caustic Potash Flakes, Purified Phosphoric Acid, and

Chlorotoluene has increased during the Financial Year

2024-25 as compared to the previous financial year. However, the production of Potassium Carbonate, Hydrogen Peroxide, Phosphoric Acid, Aluminium Chloride, Poly Aluminium Chloride, Chlorinated Parafin Wax and Stable

Bleaching Powder has decreased during the Financial

Year 2024-25 as compared to the previous financial year. During the Financial Year 2024-25, the Company on standalone basis has achieved Net External Sales of

Rs.3,959.50 Crores as against Rs. 3,702.77 Crores in the previous financial year.

The Other Operating Income, for the financial year 2024-25 had been Rs.113.41 Crores as against Rs.103.86 Crores in the previous year and the Other Income increased to Rs.92.14 Crores from Rs.90.07 Crores in the previous year.

The Other income includes Rs.18.87 Crores towards interest income and Rs.32.89 Crores towards dividend income.

The Earning Per Share was Rs.2.15 for FY 2024-25, as compared to negative Rs.18.01 for FY 2023-24. Cash Earning Per share was Rs.54.74 for FY 2024-25, as compared to Rs.24.72 for FY 2023-24. Book value of Share has decreased to Rs.626.02 per Share for FY 2024-25, as compared to Rs.639.82 per Share for FY 2023-24. The Return on Capital Employed was at 1.02 for FY 2024-25, as compared to negative 2.45 for FY 2023-24.

During the year total debt level has increased to Rs. 551.57

Crores as on 31.03.2025 as compared to Rs.543.43 Crores as on 31.03.2024, which resulted into Debt : Equity ratio to 0.12 : 1 as on 31.03.2025, as compared to 0.12 : 1 as on 31.03.2024.

The overall Raw Material expenses have decreased to Rs.1,638.75 Crores during the financial year as compared to Rs.1,650.98 Crores for the previous financial year, mainly due to decrease in procurement cost of major raw materials like Potassium Chloride, Salt, Rock Phosphate and

Toluene. Net External Electricity charges have decreased by

7.14 to Rs.967.69 Crores during the financial year from Rs.1,042.08 Crores in the previous financial year mainly due to cheaper power purchased from external sources. The cost of Fuel, Natural Gas and Water charges increased to Rs. 251.39 Crores during the financial year from Rs. 234.81 Crores in previous Financial Year. Employees remuneration has increased to Rs. 284.13 Crores during the financial year from Rs. 265.04 Crores in the previous financial year mainly due to Provisioning requirements and wages & pay revision of employees in the current year. Depreciation and amortization expense has increased to Rs. 392.30 Crores during the financial year from Rs. 377.41 Crores in the previous year due to depreciation on routine capex during current financial year. Other expenses have increased by 10.45 to Rs. 591.65 Crores during the financial year from Rs. 535.66 Crores in the previous financial year. The Finance cost has increased to Rs. 50.54 Crores during the financial year from Rs. 44.57 Crores in the previous financial year mainly due to unwinding interest and Financial Guarantee commission by Rs. 8.23 Crores on CCD issued by oint Venture which is partly offset by decrease in interest on term loan. EBITDA has increased to Rs. 452.56 Crores in Financial

Year 2024-25 from Rs. 226.10 Crores in the previous

Financial year.

The Profit after finance cost but before depreciation and amortization (Cash Profit) has increased to Rs. 402.02 Crores in Financial Year 2024-25 from Rs. 181.53 Crores in the previous Financial year. Profit before tax (PBT) has increased to Rs. 9.72 Crores during the Financial year 2024-25 from negative Rs. 195.88 Crores in previous Financial year.

Profit After Tax (PAT) has increased to Rs. 15.82 Crores during the year 2024-25 as compared to negative Rs. 132.24 Crores in previous Financial year.

At Consolidated Level, EBITDA has increased by 205.86 to Rs. 371.62 Crores during the financial year 2024-25 from Rs. 121.50 Crores in previous Financial year. Loss before tax has decreased by 76.30 to Rs. 71.22 Crores during the Financial year 2024-25 from Rs. 300.48 Crores in previous year. Loss after tax has decreased by 72.50 to

Rs. 65.12 Crores during the Financial year 2024-25 from Rs. 236.84 Crores in previous financial year.

KEY FINANCIAL RATIOS ey Financial Ratios (Standalone) for the Financial Year ended 31 st March, 2025, are provided here-below:

Ratio	Unit	FY 2024-25	FY 2023-24	% Inc. / (Dec.)
Debtors Turnover	Times	17.97	16.02	12.17
Inventory Turnover	Times	7.90	8.09	(2.35)
Interest Coverage	Times	8.95	5.07	76.53
Current Ratio	Times	1.13	1.23	(8.13)
Debt Equity Ratio	Times	0.12	0.12	-
Operating Profit Margin	_	11.43	6.11	5.32
Net Profit Margin	_	0.40	(3.57)	3.97
Return on Net Worth	_	0.34	(2.72)	3.06

Explanation for significant changes (i.e. more than 25) in above mentioned ratios as compared to previous Financial year:

Interest Coverage ratio has increased by 76.53 mainly due to increase in operating profit during current financial year. Explanation for Change in Return on Net Worth as compared to previous Financial year: Return on Net Worth has increased by 3.06 mainly due to increase in profit during current financial year.

RESEARCH AND DEVELOPMENT

The R&D Centre reflects the Company s commitment to continuous innovation, focusing on new product development, import substitution, process optimization, cost reduction, water treatment, effluent management, and waste utilization. Current R&D efforts include the development of products such as Dibenzyl Ether, Benzotrichloride, Sodium Benzoate, Benzamide, and 1,2,4-Triazole. The team is also working on identifying substitutes for imported/alternate raw materials like Rock phosphate, Isoamyl Alcohol, Alamine-336, antifoams, and other auxiliary chemicals used in the Phosphoric Acid

Plant.

Significant process improvements have been achieved through the regeneration of spent catalysts such as alumina and palladium in the Hydrogen Peroxide Plant, resulting in notable cost savings.

To support sustainability, R&D collaborates with premier institutes like IIT Bombay and BITS Pilani (Goa Campus) on projects focused on the utilization and reduction of solid waste, with the aim of developing eco-friendly value-added products.

In-house cooling water treatment formulations have been successfully implemented across various plants. These formulations enhance cycles of concentration, conserve water, control corrosion, and improve heat transfer efficiency contributing to longer equipment life. Technical support is also provided for system monitoring and stabilization in key projects, including the Hydrazine Hydrate, Caustic Soda, and Phosphoric Acid Plants.

EXPANSION AND DIVERSIFICATION

The Company has continued with its endeavors to enhance its product portfolio with new products and consolidate its existing portfolio with higher production. The capacity utilization of plants put up in recent past has continued increasing. The capacity utilization in new Chloromethanes Plant at Dahej has increased from 62 in the FY 24 to 75 FY 25, whereas in Purified Phosphoric Acid Plant it has increased from 31 in FY 24 to 99 in FY 25. The production in Caustic Soda expansion plant has been maintained around 80 despite challenges in chlorine off-take. The Hydrazine Hydrate Plant remains under stabilization with steady stream of production, though at a reduced rate. The Company, as a long-term strategic measure, to enhance its in-house chlorine consumption, had taken up a 30 TPA Chlorotoluenes Project at Dahej to produce mix of benzyl chloride, benzaldehyde and benzyl alcohol. The plant was successfully commissioned on 29 th March 2025 in the august presence of Hon ble Chief Minister of Gujarat. The first dispatch from the plant was made on 21.04.2025. The Company has also put up and commissioned a unit to convert PAC liquid to 30 TPD of PAC powder at Vadodara during February 2025.

The project for debottlenecking of existing Caustic Soda Prills Plant at Dahej to enhance production from 120 MT/ day to about 200 MT/day is near its completion and is expected to be commissioned in 2 of FY 2025-26. The Company is also putting up an additional 200 TPD Caustic Soda Flaking unit for further flexibility in approaching market for caustic soda. The Company has taken up the in-house production of additional 90 120 MT per day of Hydrochloric Acid for captive consumption as well as in-house usage of chlorine.

In its endeavours to enhance the product portfolio with added variants of existing products, the Company has already started producing 35 Hydrogen Peroxide and 35 Hydrochloric Acid at Dahej. The Company has also planned to produce downstream products of Chlorotoluenes and Sodium Chlorate at Dahej Complex.

PROJECT "AHVAAN"

The Company has launched Project Ahvaan which will run for next twelve months. As the name suggests, this program is a clarion call to all the employees to help realize the vision. Project Ahvaan will initially focus on driving significant improvement in profitability via procurement transformation, power and fuel cost reduction, manufacturing and commercial excellence. This will be followed by developing a long term growth Strategy, digital roadmap and developing a blueprint for future ready organisation to realize our vision. We have partnered with M/S AT earney, a globally renowned management consulting firm, to support us in this transformation. Their experience in steering large-scale transformations and driving measurable impact will be instrumental in shaping our path forward. Project Ahvaan will touch each & every function, at all the levels. It is not about reviewing past practices, but collectively finding avenues to build a robust organization for the future. nder this initiative, the Company has aspires to achieve revenue of Rs. 10,000 Crore plus and 20 plus

EBITDA by FY 2031.

SHORT TERM/ LONG TERM POWER ARRANGEMENTS

The Company, due to its power intensive operations, has taken up a drive to optimize its power cost. As a part of these initiatives: (a) A Group Captive 75 MW Solar Power Plant with GIPCL and GSFC has been taken up, which shall provide low cost renewable power for reducing power cost. This solar power plant has been already commissioned in phasewise manner, 25 MW in April 2025 and balance 50 MW in une 2025. (b) The Company has made arrangements for sourcing Renewable Power in short / medium terms from M/s. NTPC Vidut Vyapar Nigam

Limited (NVVNL), M/s. Tata Power and M/s. Kreate Energy for supply of solar power helping the Company reduce its power cost. (c) The Company has formed an SPV with M/s Aditya Birla Renewable Energy for sourcing 62.7 MW hybrid power for captive use. The project is expected to be commissioned by December 2025. (d) The Company had also invited Expression of Interest from reputed RE developers for installation of 75 MW hybrid Power Plant in SPV mode for captive use. Subsequently, the Requests for Proposal were sent to qualified interest parties. The proposals received from the parties are under evaluation. The Company intends to finalize and sign the required agreements in 2 of FY 2025-26. (e) The Company is further working on sourcing additional renewable energy for which an MO has been signed with GMDC for exploring the possibility of putting up more renewable assets in SPV mode. Additionally, efforts are being made for optimizing the steam cost for the Company.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The operations of the Company are under one segment only i.e., Chemical Manufacturing. The total production (excluding power generation) of the Company has increased by 3.17 to 21,11,229 MT during the FY 2024-25 from 20,46,173 MT in previous FY 2023-24. Product-wise production details are given in back side of the cover page of the Annual Report. Further, the quantitative product-wise data relating to production and sales for last ten years are also given in the Annual Report.

OPPORTUNITIES & THREATS, RISKS & CONCERNS

The strengths of the Company are economies of scale, state of the art eco-friendly technologies, extensive usage of renewable energy, integrated downstream plants, strong network for Marketing and Distribution, In-house Research and Development facilities, proximity to major raw material source and markets etc. Economic power supply has remained a major area of concern for the Company, during the year under review, the weighted average cost of electrical power continued remaining high because of higher fuel cost (natural gas & coal) and reduced availability of wind power, leading to increased dependence on grid power sourced from DISCOMs.

DISPUTE WITH DELHI JAL BOARD

An investigation was conducted by the Director General of the Competition Commission of India (CCI) against the Company, for alleged contravention of the provisions of Section 3(1) read with 3(3)(d) of the Competition Act, 2002, in respect of sales of chemical products to Delhi al Board (DB). The Competition Commission of India vide its order dated 05.10.2017 imposed penalty Rs.1.88 Crores. The Company had filed an Appeal before the NCLAT Challenging the order of the CCI. The Hon ble

NCLAT through its order dated 04.12.2017 granted stay on the operation of the impugned order of the CCI subject to a deposit of 10 of the penalty amount. The Delhi al Board has filed its Reply to the Appeal. The Company has also filed its Rejoinder to the Reply of the DB. The Company had submitted convenience compilation and Note of Submission before NCLAT. The Delhi al Board had also submitted their Note of Submission. The matter is at the stage of final arguments. The Company will strongly defend the case. The Company believes that it had not indulged in any such activity.

EXTERNAL COMMERCIAL BORROWING (ECB) LOAN

To part finance the cost of the expansion, the Company has from time to time availed following financial assistance by way of External Commercial Borrowing (ECB) and Rupee Term Loan with a view to minimize the interest outgo.

These ECB Loans are not hedged, there being natural hedge available due to exports and considering low risk profile of the Company :

1. ECB loan of S 68.70 Million equivalent to Rs.500.22 crores (Rs.362.35 Crores in F.Y. 2020-21 and Rs

137.87 Crores in F.Y. 2021-22) Crores from State Bank of India.

2. Rupee Term Loan of Rs. 75 crores in F.Y. 2024-25 from Gujarat State Financial Services Ltd.

RISK MANAGEMENT

The Board of Directors of the Company at its Meeting held on 11.02.2016 had constituted Risk Management Committee of Directors. The Board at its Meeting held on 10.11.2016 has renamed "Risk Management Committee" as "Risk

Management-cum-Safety Committee as recommended by the Audit Committee.

The Company has constituted Internal Risk Management Committee comprising of Senior Executives of the Company who are heading respective departments viz. Finance,

Manufacturing, Marketing, Purchase, Project, Safety, Information Technology, HR, Secretarial and Legal functions etc. The Managing Director is the Chairman of the Internal

Risk Management Committee. The Internal Risk Management

Committee reports to the Managing Director and the risks identified by the said Committee along with proposed mitigation actions are discussed periodically on quarterly basis with the Managing Director. Out of the various risks identified by the Internal Risk Management Committee, the Audit Committee has identified certain critical risks, which are reviewed by the Risk Management-Cum-Safety Committee, the Audit Committee and by the Board of Directors periodically. A Report on the steps taken to mitigate those critical risks is also submitted to the Risk

Management-Cum- Safety Committee, Audit Committee and the Board of Directors.

Pursuant to provisions of Regulations 17 & 21 of Listing Regulations and Sections 134 & 177 of the Companies Act, 2013 (the Act) and other applicable provisions, if any, of the Listing Regulations and the Act, the Board of Directors of the Company at its meeting held on 2 nd November, 2018 has framed and approved Risk Management Policy of the Company. The Company has further amended its Risk

Management Policy in line with amendments under SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021.

As on 31 st March, 2025, below were the Members of the

Risk Management Committee:

1. Shri Nitin Shukla, Chairman 2. Dr. Chinmay Ghoroi 3. Shri Rajiv Lochan ain and

4. Smt Avantika Singh Aulakh, IAS.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has in place adequate internal financial controls commensurate with the size and nature of its business. The Company periodically reviews the internal financial controls in the light of new statutes, changes in business models, adoption of new technology solutions and suggestions for improvements received from employees. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

For all amendments to Indian Accounting Standards (Ind AS) and the new standards notified, the Company carries out a detailed analysis and presents the impact on accounting policies, financial results including revised disclosures to the Audit Committee. The approach and changes in policies are also validated with the Statutory Auditors.

The Company has a stated process and periodicity for physical verification of its inventory and fixed assets. Any variances are analysed and accounted post necessary approvals.

The Company gets its financial statements reviewed every quarter by its Statutory Auditors. The accounts of GNAL are audited and certified by their Statutory Auditors for consolidation.

None of the auditors of the Company have reported any fraud as specified under second proviso of section 143 (12) of the Companies Act, 2013 including any statutory modifications or re-enactments thereof for the time being in force.

OUTLOOK

The Company deals in marketing of Caustic Soda (Lye,

Flakes/ Prills), Chloromethanes, Liquid Chlorine, Hydrochloric Acid, Hydrogen Peroxide, Anhydrous Aluminum Chloride, Caustic Potash (Lye & Flakes), Potassium Carbonate

(Granules & Powder), Aluminium Chloride, Phosphoric Acid, Food Grade Phosphoric Acid, Chlorinated Paraffin,

Poly Aluminium Chloride (various grades), Chlorotoluene,

Sodium Chlorate, Hydrazine Hydrate etc.

Plants are integrated in such a way that, part of finished product of one plant is being consumed as raw material in other plant to produce further value added products. The company thus advantage of its forward integration philosophy.

As, more than 60 of the total production capacity of India is located in Western region, it has been observed that - there is 22-23 surplus supply available than the actual current demand in the region.

In order to balance the Western market, we used to cater the market of Eastern India. Accordingly, we have successfully executed supplies of CS Lye to M/s. National Aluminium Company Ltd. (NALCO) and M/s. Vedanta

Ltd., M/s. Utkal Alumina International Ltd. as well as M/s.

Hindalco Industries Ltd. in the tune of approx. 155018 MT i.e. 149886 MT through Rail Racks and 5132 MT through

Ship/Coastal (including GNAL).

In addition to this, we have executed CSL bulk Exports of about 27585 MT to bridge the demand-supply gap in Western India during FY 2024-25, as compared to 34736

MT during FY 2023-24.

Out of total eight active Chloromethanes manufacturers in India, the Company is the market leader with a market share of about 19.65, having capacity utilization of 80 i.e. 1.29 Lakhs MT of Chloromethanes produced during the FY 2024-25, as against the total installed capacity of

1.61 Lakhs MTPA.

India has successfully transitioned into a net exporter with the commissioning of the Company new Chloromethanes capacity the Company is exporting Methylene Chloride

(MDC) to more than 20 countries, and within a short period, we have achieved remarkable sales growth. This accomplishment highlights India s expanding presence in the global market and the company s success in capitalizing new opportunities by consistently supplying quality products. In addition to this, captive consumption of Hydrogen Gas is maximized through expanded Hydrogen Peroxide plant, which is also fetching additional revenue. The Company is one of the largest seller of Hydrogen Gas to domestic and SE market.

Further, the company has successfully optimized its Sodium Chlorate plant at Dahej, which is the first & only manufacturing plant in India, which finds applications primarily in Pulp & Paper Industry for Elemental Chlorine Free Bleaching of Pulp & Paper.

New Food Grade Phosphoric Acid plant is running at 100 capacity and is consuming large quantity of HCI, especially when HCI is one of the concerns of disposal. The Company has started its long awaited product Food Grade Phosphoric Acid at Dahej Complex and currently running at 100 capacity, which is consuming large quantity of HCI, where HCI is one of the concern of disposal. By start-up of this Food Grade Phosphoric Acid, the Company entered into new market segments of Edible Oil, Food Grade Phosphates, Carbonated Drinks.

The Company has successfully commissioned Hydrazine Hydrate plant at Dahej under the mission of Make in India, which is the first & only manufacturing plant in India, which finds applications primarily in Agrochemicals, as Oxygen, Scavenger etc.

As a value addition to Hydrochloric Acid (HCI), the Company had commissioned Poly Aluminum Chloride (PAC) at

Vadodara (Coelho) Complex and able to capture sizable domestic market for various grades of PAC. The physical Exports of PAC (Powder) has also been increased, wherein realizations are promising.

Gujarat is predominantly an industrial state, which contains a number of large, medium & small business units in the Chemical, Petrochemical, Plastics, Textile, Fertilizer and other Industries.

As part of market development, the emphasis is to interact with customers and develop new market for the products. Providing prompt after sales service as & when required is part of this strategy and this helps the company to increase its volume especially for new products.

The Company is also exporting many of its products viz.

Caustic Soda Lye, Flakes, Prills, Potassium Carbonate,

Caustic Potash Flakes, Hydrogen Peroxide, Phosphoric

Acid, liquid Chlorine, Aluminum Chloride, PAC (Powder),

Stable Bleaching Powder, Benzyl Alcohol, Benzyl Chloride, Hydrochloric Acid and CPW to Europe, West Asia, South-East Asia, Africa, Middle-East/Far East, SAARC countries etc. Company is facing import threat and dumping of various products at low prices, which affects capacity utilization, prices etc. and is pro-actively taking corrective action for imposition of Antidumping Duty within the WTO guidelines. The Company has introduced Channel Financing/Advance Payment System and all our existing authorized Dealers are now under "Channel Financing/Advance Payment System".

Hence, there is no credit risk attached for sales with our authorized Dealers. In addition to this, now outstanding Avg. No. of Days is 8 days (as on 31.03.2025) from 7 days (as on 31.03.2024) i.e. 115.44 Crores compared to 100.72 Crores as on 31.03.2024.

The Company has successfully launched Digital Product Booking Platform effective Mar-2024, to book products through Online Portal to make system more transparent and to explore market price.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has consistently embraced a proactive approach in undertaking various activities to sustainably export volume, boost revenues, and explore new export market for both existing and new products. This proactive stances showcase dedication to continue growth and the expansion of global presence.

Company has expanded its presence across globe and added another 19 countries in our stride and now the

Company Exporting its products to total 52 Countries, as on 31.03.2025.

The Company has experienced a quantum leap in Export capabilities. Company has achieved ever-highest Exports of Rs.860 Crores, surpassing all previous records and with GNAL, our total Exports turnover reached at Rs.1171 Crores. The Company has accomplished a significant increase in foreign currency earnings, soaring from SD 44.81 Million to SD 52.92 Million, reflecting a growth of 18. In the running financial year also, the Company targets at wider markets for Exports of various products with the help of company s accreditation of IS/ISO 9001, 14001, 18001 & 50001 and having registration of Benzyl Alcohol and Aluminium Chloride with REACH while for Poly Aluminium

Chloride and Caustic Soda registration have been made with NSF International, USA and Halal India.

SAFETY & ENVIRONMENT

Our commitment to safety and preservation of environment has been encompassed in our uality, Health, Safety, Environment and Energy (HSE En) Policy. The Company has implemented elaborate Environment Management System (EMS), uality Management System (MS), Occupational Health & Safety Management System

(OH&S) and Energy Management System (EnMS) and has embarked on continual improvement. TV(India) Pvt.

Ltd. has granted ISO 9001: 2015, ISO 14001: 2015, ISO 45001: 2018 and ISO 50001: 2018 Integrated Management

System Certificates to the Company.

The Company has continued its emphasis on safety awareness not only for its employees and contract labourers but also for customers handling our products and community in neighbourhood of our plants. The Company regularly organizes public awareness programs in surrounding villages emphasizing the importance of safety and focusing on industrial hazards. Safety awareness programme for the employees as well as for contract workers are also organized regularly. The Company has also adopted a unique concept of Plant Healthiness Check-up to identify and address areas for improvement of the manufacturing facility. The Company has also its Emergency Response and Contingency Plan (ERCP) in place to control and minimize effect of any emergency situations. The ERCP is also reviewed and updated by considering various Maximum Credible Scenarios. Preparedness and response to this ERCP is evaluated periodically by conducting different levels of Mock-Drills on emergency scenario.

The Company also conducts third-party Safety Audit and allows fresh eyes and a different approach to assess, review, and analyse company s safety management programs of prevention of an incident. As on 31.03.2025, the Vadodara Complex of the Company has completed 977 accident-free days, and Dahej Complex-1 and Dahej Complex-2 have completed 654 and 958 accident-free days respectively.

Adequate steps have been taken for Pollution Control, Green Belt Development etc. besides due compliance with statutory requirements for the protection of environment. At Vadodara Complex, green belt has been developed and maintained in 25 out of total 29 acres of land having various varieties of total 7,000 trees like teak, bamboo, neem, babul, etc. at TSDF site. Company has also developed and maintained about 24000 sq. mts. area of green patches having 1,700 trees and lawns, shrubs etc. inside the Caustic Soda & Coelho complex. At Vadodara Complex, we have total 8,700 nos. of trees being planted & maintained. Also, we have developed vertical garden by way of plantation in 550 big pots, on vertical peripheral area of our corporate office building. The canteen and garden waste is being converted into the best organic manure through in-house vermicomposting facility on regular basis at both the Complexes.

In the field of water conservation, the Company has installed wastewater recycling RO Plant for converting wastewater into reusable water. Daily 400 to 500 M 3 of wastewater is treated and converted to reusable water which is recycled back to the Plant. We have ground water recharging system at our TSDF site, where total rainfall and surface run off is being recharged into ground.

In Dahej Complex, large area has been covered by development and maintenance of green belt, landscaping, flora & fauna, rainwater harvesting through earthen ponds. The Company has installed facility for recycling part of its liquid effluent stream, using RO System in Dahej Complex. The Company has undertaken water conservation by channelizing Cooling Tower Water Spillage, treated sewage and drip irrigation. Nearly 24,000 nos. of trees have been planted and 50 hectares of green belt has been developed in nearby Paniyadra village.

The Company regularly sends hazardous waste for Co- processing to cement industry through third party pre-processing facilities for utilisation of wastes as AFR

(Alternate Fuel and Raw Material). The canteen and garden waste are being converted into organic manure through in-house vermicomposting facility on regular basis at both the Complexes. The Company is one of the Promoters of Vadodara Enviro Channel Limited (VECL). VECL was formed by various nearby industries for the purpose of safe discharge of treated effluent in sea. Thus, entire treated liquid effluents of Caustic Soda & Coelho Complex are being discharged through VECL. VECL has valid Consolidated Consent and Authorisation (CC&A) untill June 30, 2029.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the Company has continued to fulfill its Corporate Social Responsibilities to enhance Human Development Index (HDI) and contributed to achieve Sustainable Development Goals (SDGs) by undertaking thematic activities viz. (a) Promotion of Education and its related activities (b) Care for Special Children (c) Healthcare,

Nutrition, Hygiene and Sanitation (d) Sustainable Livelihood and Skill Development activities (e) Art, Culture and Heritage (f) Water Conservation and Environment related activities.

Promoting inclusive and sustainable growth has been a priority for the Company from both a social and business perspective. The Company strives to make a difference to its customers, to the society and to the nation s development directly through its products and services, as well as through its development initiatives and community outreach. During the Financial Year 2024-25, the Company had carried out various CSR activities through GACL Foundation Trust. indly refer Annexure-2 of Board s Report i.e. Annual Report on CSR activities for more details on various CSR activities.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES

At the Company, our Human Resources Department continues to play a pivotal role in fostering a dynamic, resilient and future-ready workforce. Guided by our core values and driven by a commitment to excellence, the company focused on strategic initiatives that nurture talent, enhance employee engagement and align human capital with long-term business goals.

In the rapidly evolving chemical industry, upskilling and reskilling remain critical challenge. the Company s Learning & Development initiatives were centred around strengthening technical competencies, leadership potential and digital readiness. Customized training programs both virtual and in-person were rolled out across levels to empower employees with new-age capabilities. We have collaborated with reputed academic institutes like IIM-Ahmedabad and IIT-Gandhinagar that shall ensure the best quality developmental inputs and support the organization s growth plans. Diversity, equity, and inclusion continued to be key focus areas. Our policies and practices are designed to create a workplace where every employee feels valued and heard. The Company strengthened its efforts to provide a safe, inclusive and respectful environment, supported by continuous sensitization workshops and open-door forums. One of the key milestones of the year was our continued journey towards HR digitalization. We have developed Swasthya Setu (Digitalization of Individual Medical History) and GACL Sparsh (WhatsappChatBot ) for handy access of personal data. Our digital HR initiatives not only improved process efficiency but also enhanced the overall employee experience, making interactions with HR more intuitive and responsive.

Wellness remained a central theme, with initiatives focused on physical, emotional, and mental well-being. Periodic health check-ups and wellness webinars were conducted for employees and their families.

We continued to acknowledge long-term association and loyalty of our employees through recognition by Long Service Award. Further, popular sessions on Vadil Hovano Vaibhav (socializing skills after retirement) were conducted for all retiring employees in the financial year 2024-25. At the Company, we believe that our employees are our most valuable asset. Together, we are building a culture that empowers people and provide a platform to utilize their potential to the fullest.

AWARDS AND RECOGNITIONS

The Company has adopted a constant pursuit of growth and prosperity. In an effort to do so, it is important to acknowledge the Company s achievements and recognitions. This not only boosts your employees confidence and zeal but also enables the Company to push its limits and aim higher always. The Company continued its impressive run and added new awards and recognitions.

Awarded the Runner p Trophy at the Gujarat Cleaner Production Award for the Year 2017-18 by the Forests and Environment Department, Government of Gujarat, for the large-scale sector (highly polluting) in September 2024. The Company has been awarded the Runner p Trophy at the prestigious Gujarat Cleaner Production Award for the Year 2017-18. This award was presented by Shri Sanjeev umar, IAS, Principal Secretary of the Forests and Environment Department, Government of Gujarat, during a ceremony held on September 19, 2024, at the Gujarat

Pollution Control Board (GPCB) in Gandhinagar.

This award recognizes the Company s commitment to environment sustainability within the large-scale sector, especially among highly polluting industries. As part of our ongoing efforts to promote cleaner production practices, this accolade underscores our dedication to reducing our environment footprint and enhancing our sustainability initiatives.

This achievement reflects the hard work and dedication of our team and the unwavering support of our stakeholders. Together, we are committed to fostering a cleaner and greener future for our community and beyond. The Company remains focused on implementing innovative practices that contribute to environmental preservation while maintaining operational excellence. We believe that through collaborative efforts and responsible management, we can continue to make a positive impact.

To foster lasting societal transformation, active community engagement is essential. The Company is transcending the traditional boundaries of Corporate Social Responsibility (CSR) and embracing the role of a Socially Responsible Corporate (SRC). The organization s approach to CSR goes beyond mere compliance, emphasizing a comprehensive dedication to giving back to society in every conceivable manner. The Company actively operates in various domains including healthcare, hygiene, education, support to special children, sanitation, sustainable livelihoods, skill development, women s empowerment, water and environmental conservation, as well as the promotion of art, culture, and heritage. Its CSR initiatives and programs aim to integrate deserving rural communities into the broader fabric of society. The Company aligns its endeavours with government programs and initiatives, consistently striving to create a better world for all.

INFORMATION TECHNOLOGY

As the Company charts its path for future growth, the efficiency of core operational systems becomes crucial. By integrating higher levels of automation, the organization aims to enhance productivity and maintain a competitive edge. The systems are thoughtfully designed to seamlessly scale and adapt to new processes and business needs. Furthermore, projects on process improvements have been implemented, leveraging our ERP solution. the Company adopts innovative technologies, including APIs from WhatsApp, ChatGPT, and various government platforms, to simplify processes, and provide a more refined and seamless user experience.

Amid the evolving global landscape, information security remains a top priority. Measures have been implemented to safeguard and restore the Company s IT assets against ransomware attacks while curbing their potential spread. Automated security solutions have been deployed to tighten security in the system. Business continuity and disaster recovery plans are in place and mock drills are done periodically to ensure reliability and availability of all critical IT systems. Employees receive comprehensive training on cybersecurity through initiatives such as phishing email simulations, cybersecurity quizzes, and structured training programs. Regular upgrades are conducted for networks and systems, ensuring they remain up-to-date.

Periodic Vulnerability Assessment and Penetration Testing

(VAPT) are performed, with any identified issues promptly addressed and resolved.

The Company successfully attained ISO 27001:2022 certification during the year, underscoring its commitment to robust cybersecurity measures and organizational resilience. This internationally recognized standard emphasizes the implementation of a comprehensive Information Security

Management System (ISMS), ensuring systematic risk assessment, mitigation, and ongoing improvement of security protocols. This milestone reflects the Company s proactive approach to cyber policy resilience, ensuring secure and sustainable operations in an increasingly volatile digital landscape.

The Company remains committed to investing in critical Information Technologies, ensuring seamless operations, and empowering businesses to stay competitive on a global scale through innovative solutions.

CAUTIONARY STATEMENT:

The Company assumes no responsibility in respect of forward-looking statements, expectations and assumptions herein which may undergo changes in future on the basis of subsequent development, information, or unforeseen circumstances or force majeure events. This shall not be considered as investment guidance or advice or invitation.

The readers are advised to make their own independent assessment and judgement.