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Notes to Accounts of Gujarat Fluorochemicals Ltd.

Mar 31, 2016

1. INITIAL PUBLIC OFFER BY SUBSIDIARY COMPANY

During the previous year,Inox Wind Limited (IWL),a subsidiary of the Company, had made an Initial Public Offer (IPO) for 3,19,18,226 equity shares of Rs, 10 each, comprising of 2,19,18,226 fresh issue of equity shares by IWL and 1,00,00,000 equity shares offered for sale by the Company. The equity shares were issued at a price of Rs, 325 per share (including premium of Rs, 315 per share) subject to discount of Rs, 15 per share to the eligible employees of IWL and retail investors. Out of the total proceeds from the IPO of Rs, 102053.45 Lakh, the share of the Company is Rs, 32,053.45 Lakh from the offer for sale of 1,00,00,000 equity shares. The total expenses in connection with the IPO were shared between the Company and IWL. Accordingly amount of Rs, 1581.82 Lakh, being the CompanyRs,s share in the IPO expenses, was adjusted against the gain on sale of said shares, and the net gain of Rs, 30,271.63 Lakh is included in exceptional items (see note no. 38).

2. CHANGE IN THE ESTIMATE OF USEFUL LIFE OF FIXED ASSETS

The Company has adopted the useful lives of various fixed assets as specified in Schedule II of the Companies Act, 2013, with effect from 1st April, 2014, as against the useful lives adopted earlier as specified in Schedule XIV to the Companies Act, 1956. The carrying amount of fixed assets, where the remaining useful life as at 1st April, 2014 as per Schedule II was Rs, Nil, aggregating to Rs, 303.16 Lakh (net of deferred tax credit of Rs, 156.10 Lakh), was recognized in the opening balance of retained earnings.

3. SECURITIES AND TERMS OF LOANS TAKEN:

a) Secured loans:

Foreign currency term loan in form of ECB of Rs, Nil (previous year Rs, 19574.81 Lakh) from Axis Bank Limited was secured by way of first charge on all movable and immovable assets of 36 MW Wind Power Project at Mahidad, Gujarat, and exclusive charge on movable fixed asset of DPTFE plant located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka - Vagra, District -Bharuch, Gujarat. Further, the Lender also had a charge/lien over the receivables, assignment of rights under the project agreements and escrow account relating to 36 MW Wind Power Project at Mahidad. The term loan was repayable in 40 equal quarterly installments starting from 15th June, 2012 and carried interest @ 3 months LIBOR plus 4.25% p.a. Out of total sanctioned ECB of USD 49 million, ECB installments of USD 25 million was hedged at the rate of 11.26% p.a.

Foreign currency term loan in form of ECB of Rs, 9738.46 Lakh (previous year Rs, Nil) from Mizuho Bank Limited is secured by way of first charge on all movable and immovable assets of 36 MW Wind Power Project at Mahidad, Gujarat and first charge on movable fixed asset of DPTFE plant located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka - Vagra, District - Bharuch, Gujarat Pari-passu with Hong Kong and Shanghai Banking Corporation Limited. Further, the Lender also has assignment of rights under the project agreements relating to 36 MW Wind Power Project at Mahidad by way of Pari-passu with Hong Kong and Shanghai Banking Corporation Limited. The term loan is repayable in 20 equal quarterly installments starting from 15th June, 2016 and carries interest @ 3 months LIBOR plus 1.13% p.a. The entire ECB loan of USD 14.70 million is hedged at the rate of 8.24% p.a. w.e.f. 18th March, 2016.The Company is in the process of creation of charge.

Foreign currency term loan in form of ECB of Rs, 9738.46 Lakh (previous year Rs, Nil) from Hong Kong and Shanghai Banking Corporation Limited is secured by way of first charge on all movable and immovable assets of 36 MW Wind Power Project at Mahidad, Gujarat and first charge on movable fixed asset of DPTFE plant located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka - Vagra, District - Bharuch, Gujarat Pari-passu with Mizuho Bank Limited. Further, the Lender also has assignment of rights under the project agreements relating to 36 MW Wind Power Project at Mahidad by way of Pari-passu with Mizuho Bank Limited. The term loan is repayable in 20 equal quarterly installments starting from 15th June, 2016 and carries interest @ 3 months LIBOR plus 1.13% p.a. The entire ECB loan of USD 14.70 million is hedged at the rate of 8.24% p.a. w.e.f. 18th March, 2016. The Company is in the process of creation of charge.

Foreign Currency Term Loan in form of ECB of Rs, 7638.00 Lakh (previous year Rs, 8024.54 Lakh) from ICICI Bank Limited is secured by way of an exclusive first ranking security interest/mortgage/hypothecation on movable and immovable fixed assets including cash flow receivables and escrow account of 14 MW Wind Power Project at Mahidad. Further the Lender has first & exclusive 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. The term loan is repayable in 20 equal half yearly installments starting from 20th September, 2013 and carries interest @ 6 months LIBOR plus 4.14% p.a. Out of ECB of USD 16.47 million, ECB of USD 10 million was hedged at the rate of 10.55% p.a.

Foreign Currency Term Loan in form of ECB of Rs, Nil (previous year Rs, 2258.25 Lakh) from DBS Bank Limited was secured by first Pari-passu charge over moveable fixed assets of the Company at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District - Bharuch except assets pertaining to 18 MW coal based captive power plant, DPTFE & PTPTFE plant. The term loan was repayable in 16 equal quarterly installments starting from 14th April, 2012 and carried interest @ 8.65% p.a. on fully hedged basis.

Over draft facility of Rs, Nil (previous year Rs, 1798.08 Lakh) from HDFC Bank Limited carried interest @ 10.75% p.a. and was secured by first Pari-passu charge in favour of the bank by way of hypothecation over the stock and receivables, both present and future, of the Company''s unit located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka - Vagra, District - Bharuch, Gujarat.

Working Capital Loan in the form of buyers credit of Rs, Nil (previous year Rs, 4165.37 Lakh) from The Royal Bank of Scotland was repayable in 240 days to 330 days and carried interest ranging @ 8 month LIBOR plus 0.95% p.a. to 12 month LIBOR plus

0.95% p.a. and was secured by way of first Pari-passu charge in favour of the bank by way of hypothecation over the stock and receivables, both present and future, of the Company''s unit located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka - Vagra, District - Bharuch, Gujarat.

b) Unsecured loans:

Unsecured Working Capital Loans from Kotak Mahindra Bank Limited, in the form of buyer''s credit of Rs, 2572.16 Lakh (previous year Rs, 7618.17 Lakh with ING Vysya Bank Limited, now merged with Kotak Mahindra Bank Limited) carries interest ranging from 12 month LIBOR plus 0.50% p.a. to 12 month LIBOR plus 1.00% p.a. and is repayable in 270 days to 330 days.

Unsecured Working Capital Loan from BNP Paribas in form of working capital demand loan of Rs, Nil (previous year Rs, 4900.00 Lakh) carried interest @ 9.35% p.a. was repayable in 29 days.

Foreign Currency Working Capital loan from BNP Paribas in form of PCFC of Rs, 8889.37 Lakh (previous year Rs, 4694.97 Lakh) carries interest @ 6 month EURIBOR plus 0.14% p.a. to 6 month EURIBOR plus 0.45% p.a. and 6 month LIBOR plus 0.20% p.a. and is repayable in 180 days.

Unsecured foreign currency working capital loan from Citibank N.A. in form of FCNR of Rs, Nil (previous year Rs, 2525.86 Lakh) carried interest @ 12 month LIBOR plus 2.00% p.a. and was repayable in 365 days.

Unsecured foreign currency working capital loan from IDBI Bank Limited, in form of PCFC of Rs, 975.40 Lakh (previous year Rs, 1901.49 Lakh) carries interest @ 6 month LIBOR plus 0.75% p.a. and is repayable in 180 days.

Unsecured foreign currency working capital loan from Yes Bank Limited, in form of Buyer''s credit of Rs, 5802.19 Lakh (previous year Rs, 3335.19 Lakh) carries interest from 12 month LIBOR plus 0.58% p.a. to 12 month LIBOR plus 0.95% p.a. and is repayable in 269 days to 330 days.

Commercial paper of Rs, 2490.01 Lakh (previous year Rs, 10893.49 Lakh), net of unamortized interest of Rs, 9.99 Lakh (previous year Rs, 106.51 Lakh) is repayable in 60 days. Discount on commercial paper is @ 8.70% p.a. Maximum balance during the year is Rs, 11000.00 Lakh (previous year Rs,13500.00 Lakh).

4. CONTINGENT LIABILITIES:

a. Claims against the Company not acknowledged as debt - in respect of claim by a service provider - Rs, 7.22 Lakh (previous year Rs, 7.22 Lakh).

b. In respect of Income tax matters - Rs, 8093.33 Lakh (previous year Rs, 8093.33 Lakh). This represents:

The Company has received CIT(A) orders for Assessment Year 2008-09 to Assessment Year 2011-12 wherein the CIT(A) has confirmed the action of the Assessing Officer in respect of:

1. treatment of Investment activity of the Company in respect of investment in shares as a business activity, and

ii. re-computation of the amount of deduction u/s 80IA by applying the regulatory prices in respect of power generated at its captive power units.

The Company has not accepted the orders of the CIT(A) and has preferred appeal before ITAT, Ahmadabad. The said issues were decided in favour of the Company by CIT(A) in earlier years. Consequently, the amount of demands in respect of the above are included in the amount of contingent liabilities including for subsequent years where assessment orders are received. Amount of Rs, 8093.33 Lakh (previous year Rs, 8093.33 Lakh) has been paid in respect of above income tax demands and not charged to the Statement of Profit and Loss.

c. In respect of Service tax matters - Rs, 580.54 Lakh (previous year Rs, 417.67 Lakh). This includes:

Amount of Rs, 573.68 Lakh (previous year Rs, 410.83 Lakh) for which the Company has received various show cause notices regarding levy of service tax on certain items. The Company has filed the replies or is in the process of filing replies.

d. In respect of Excise duty matters - Rs, 3361.39 Lakh (previous year Rs, 2816.65 Lakh). This includes:

1. Amount of Rs, 2357.02 Lakh (previous year Rs, 2189.12 Lakh) for which the Company has received various show cause notices regarding service tax input credit on certain items and inter-unit transfers. The Company has filed the replies or is in the process of filing replies.

2. Amount of Rs,155.19 Lakh (previous year Rs, Nil) in respect of demand on account of cenvat credit availed on certain items, levy of excise duty on freight recovered from customers and cenvat credit availed on equipment and components supplied by third party. The Company has filed appeal before Commissioner of Central Excise and Service tax.

Amount of Rs, 10.05 Lakh (previous year Rs, Nil) has been paid in respect of above Excise duty demand and not charged to the Statement of Profit and Loss.

3. Amount of Rs, 849.18 Lakh (previous year Rs, 627.53 Lakh) in respect of demand on account of cenvat credit availed on certain items and levy of excise duty on freight recovered from customers. The Company has filed appeal before CESTAT.

e. In respect of Custom duty matter - Rs, 1087.53 Lakh (previous year Rs, 973.57 Lakh). This represents:

The Company has received demands on account of differential custom duty on imported material on high seas basis. The Company has filed appeal before CESTAT and the matters are pending. Amount of Rs, 87.60 Lakh (previous year Rs, 40.l7 Lakh) has been paid in respect of above Custom duty demand and not charged to the Statement of Profit and Loss.

f. In respect of Sales Tax matters - VAT Rs, 18.00 Lakh (previous year Rs, Nil) &CST Rs, 49.33 Lakh (previous year Rs, Nil).This represents:

Company has received VAT & CST assessment order of VAT demand of Rs, 18.00 Lakh & CST demand of Rs, 49.33 Lakh for the F.Y. 2011-12. Company has not accepted the order and is in process of filing appeal with Joint Commissioner of Commercial tax.

g. Claims in respect of labour matters - amount is not ascertainable.

h. Corporate guarantee given to bank in respect of loan taken by a step-down-subsidiary - Rs, 3787.62 Lakh (previous year Rs, 1062.50 Lakh ) - equivalent to USD 5.72 million (previous year USD 1.70 million).

In respect of above matters, no provision is considered necessary as the Company expects favorable outcome. Further, it is not possible for the Company to estimate the timing of further cash outflows, if any, in respect of above matters.

5. COMMITMENTS:

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs, 8488.73 Lakh (previous year Rs, 9829.64 Lakh).

(ii) Other commitments -

a) The Company has provided an undertaking to one of the lenders of its subsidiary, Inox Renewable Limited (IRL), to provide additional funds to IRL, in case of any short fall in the resources of IRL for completing its project and /or for working capital.

b) The Company has provided an undertaking to one of the lenders of its step-down subsidiary Inox Renewable (Jaywalker) Limited (IRJL) to provide funds to IRJL equal to the amount of deficiency to meet the project financial completion date (PFCD) or to meet all its financial obligation due and payable prior to PFCD.

The above information has been disclosed in respect of parties which have been identified on the basis of the information available with the Company.

49. SEGMENT INFORMATION

(A) Information about Primary (Business) Segment

The Company operates in single business segment of "Chemicals" - Comprising of Refrigerant Gases, Anhydrous Hydrochloric Acid, Caustic-Chlorine, Chloromethane, PTFE and PT-PTFE. Electricity generated by Captive power plants is consumed in Chemical Business and not sold outside. Accordingly, the same is a part of the Chemical Business. Hence, there is only one reportable business segment as envisaged in Accounting Standard (AS) 17 "Segment Reporting"

(B) Information about Secondary (Geographical) Segment:

The Company derives revenue from both domestic and overseas markets, which are considered as different geographical segments. Segment-wise revenues are as under:

As the Company has integrated manufacturing facilities, it is not possible to directly attribute or allocate on a reasonable basis, the expenses, assets and liabilities to these geographical segments.

6. The Company has a Joint Venture interest of 33.77% in Xuancheng Hengyuan Chemical Technology Company Ltd., a company incorporated in the People''s Republic of China. As at 31st March, 2016, the Company has invested a sum of Rs,1263.89 Lakh in the share capital of this Joint Venture.

The Joint Venture Company ("''JVC") is engaged in the business of manufacture of anhydrous hydrogen fluoride and allied activities.

a) The financial year of the JVC is January to December. The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st December, 2015 are as under:

b) The Company''s share of capital commitments in the JVC as at 31st December, 2015 is Rs, Nil (previous year Rs, Nil).

c) The Company share of contingent liability of the JVC as at 31st December, 2015 is Rs, Nil (previous year Rs, Nil).

d) The Company’s transactions with JVC,being a related party, are disclosed in note no. 52.

7. The Company has a Joint Venture interest of 25% in Swarnim Gujarat Fluorspar Private Limited, a Company incorporated in India. As at 31st March, 2016, the Company has invested a sum of Rs, 108.25 Lakh in the share capital of this Joint Venture.

The JVC is proposed to be engaged in the business of manufacture of Acid Grade Fluorspar and allied activities.

b) The Company’s share of capital commitments in the JVC as at 31st March, 2016 is Rs, Nil (previous year Rs, Nil)

c) The Company’s share of contingent liability of the JVC as at 31st March, 2016 is Rs, Nil (previous year Rs, Nil)

d) The Company’s transactions with JVC,being a related party, are disclosed in note no 52.

8. RELATED PARTY DISCLOSURES:

(i) Names of Related Parties

(A) Where control exists: Holding Company -

Inox Leasing and Finance Limited

Subsidiary Companies -

Inox Leisure Limited (ILL)

Inox Wind Limited (IWL)

Inox Renewable Limited (IRL)

Inox Infrastructure Limited

Gujarat Fluor chemicals Americas LLC, U.S.A. (GFL Americas LLC)

Gujarat Fluor chemicals Singapore Pte. Limited

GFL GM Fluorspar SA - Subsidiary of GFL Singapore Pte. Limited

Gujarat Fluor chemicals GmbH, Germany

Satyam Cineplexes Limited - Subsidiary of ILL (amalgamated w.e.f. 8th August, 2014)

Shouri Properties Private Limited - Subsidiary of ILL w.e.f. 24th November, 2014 Inox Wind Infrastructure Services Limited (IWISL) - Subsidiary of IWL Inox Renewables (Jaisalmer) Limited - Subsidiary of IRL Marut Shakti Energy Limited - Subsidiary of IWISL

Satviki Energy Private Limited - Subsidiary of IWISL w.e.f. 19th November 2015

Sarayu Wind Power (Tallimadugula) Pvt. Ltd - Subsidiary of IWISL w.e.f. 09th December, 2015

Vinirrmaa Energy Generation Pvt. Ltd - Subsidiary of IWISL w.e.f. 23rd January, 2016.

Sarayu Wind Power (Kondapuram) Private Limited - Subsidiary of IWISL w.e.f. 25th March, 2016.

(B) Other related parties with whom there are transactions during the year:

Joint Ventures -

Xuancheng Hengyuan Chemical Technology Co. Ltd (XHCT Co. Ltd)

Swarnim Gujarat Fluorspar Private Limited

Key Management Personnel -

Mr. V K Jain (Managing Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. J S Bedi (Whole Time Director) upto 28th April, 2015 Mr. Paresh Trivedi (Whole Time Director) - upto 27th June, 2014 Mr. Anand Bhusari (Whole Time Director) w.e.f. 28th April, 2015

Relatives of Key Management Personnel -

Mr. D K Jain (Father of Shri V K Jain)

Mr. P K Jain (Brother of Shri V K Jain)

Enterprises over which a Key Management Personnel, or his relatives, have significant influence -

Devansh Gases Private Limited

Devansh Trademart LLP (formerly known as Devansh Trading and Finance Private Limited)

Inox India Private Limited (formerly known as Inox India Limited)

Inox Air Products Private Limited (formerly known as Inox Air Products Limited)

Inox Chemicals LLP (formerly known as Inox Chemicals Private Limited)

Refron Valves Limited Rajni Farms Private Limited

Siddhapavan Trading LLP (formerly known as Siddhapavan Trading and Finance Private Limited)

Siddho Mal Trading LLP (formerly known as Siddho Mal Investments Private Limited)

(b) Disclosure required under section 186(4) of the Companies Act, 2013

In respect of related parties:

(i) The inter-corporate deposits of Rs, 16249.00 Lakh (previous year Rs, 16249.00 Lakh) to ILL are unsecured and given for business purpose. The inter-corporate deposits are repayable in 6 to 8 years from the date of respective inter-corporate deposits and carry interest @ 10% p.a.

(ii) Corporate guarantee is given by the Company to Exim Bank in respect of loan taken by GFL GM Fluorspar SA, Morocco for the purpose of acquisition of fixed assets. The outstanding amount is Rs, 3787.62 Lakh (previous year Rs, 1062.50 Lakh) - equivalent to USD 5.72 million (previous year USD 1.70 million).

9. EMPLOYEE BENEFITS:

a) Defined Contribution Plans: Contribution to provident fund of Rs, 412.26 Lakh (previous year Rs, 381.53 Lakh) is recognized as an expense and included in ''Contribution to provident and other funds'' in the Statement of Profit and Loss.

b) Defined Benefit Plans: The amounts recognized in respect of gratuity and leave benefits - as per actuarial valuation as on 31st March, 2016.

The above defined benefit plans are unfounded. The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

(C) The Company''s other significant leasing arrangements are in respect of operating leases for premises (offices and residential accommodations) taken on lease. These lease arrangements are cancellable, range between 11 months to 60 months and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals are charged as expenses in the Statement of Profit and Loss.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

(a) The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) is Rs, 533.64 Lakh (previous year Rs, 908.74 Lakh)

11. Excise Duty collected on sale of products and other operating revenue is reduced from gross sale of products and other operating revenue. Excise duty of Rs, 48.96 Lakh (previous year Rs, 50.66 Lakh) comprising of payments on other accounts is charged to the Statement of Profit and Loss separately and included in excise duty, custom duty and sales tax in note 32.

Includes allowances paid prior to appointment of Shri Anand Bhusari as Whole -Time Director.

The following are the details of Sitting Fees paid to the Directors for attending the Board / Committee Meetings


Mar 31, 2015

1. INITIAL PUBLIC OFFER BY SUBSIDIARY COMPANY

During the year, Inox Wind Limited (IWL), a subsidiary of the Company, has made an Initial Public Ofer (IPO) for 3,19,18,226 equity shares of Rs. 10 each, comprising of 2,19,18,226 fresh issue of equity shares by IWL and 1,00,00,000 equity shares ofered for sale by the Company. The equity shares were issued at a price of Rs. 325 per share (including premium of Rs. 315 per share) subject to discount of Rs. 15 per share to the eligible employees of IWL and retail investors. Out of the total proceeds from the IPO of Rs. 102,053.45 Lakh, the share of the Company is Rs. 32,053.45 Lakh from the ofer for sale of 1,00,00,000 equity shares. The total expenses in connection with the IPO are shared between the Company and IWL. Accordingly amount of Rs. 1581.82 Lakh, being the Company''s share in the IPO expenses, is adjusted against the gain on sale of said shares.

2. CHANGE IN THE ESTIMATE OF USEFUL LIFE OF FIXED ASSETS

a) The Company has adopted the useful lives of various fixed assets as specified in Schedule II of the Companies Act, 2013, with effect from 1 April, 2014, as against the useful lives adopted earlier as specified in Schedule XIV to the Companies Act, 1956. The carrying amount of fixed assets, where the remaining useful life as at 1st April, 2014 as per Schedule II is Nil, aggregating to Rs.303.16 Lakh (net of deferred tax credit of Rs.156.10 Lakh), is recognized in the opening balance of retained earnings. Further, the carrying amount of fixed assets as at 1st April, 2014 is being depreciated over the revised remaining useful life of the assets. Consequently, depreciation charge for the year is higher by Rs.224.49 Lakh.

b) In accordance with Accounting Standard (AS) 22: Taxes on Income, the deferred tax liability on account of timing difference in depreciation, to the extent reversing during the tax holiday period, is not recognized. Consequent to the above change in the estimated useful life of fixed assets, such timing difference reversing during the tax holiday period is recomputed. Consequently, there is increased in the deferred tax liability of Rs.990 Lakh and the same is included in the amount of deferred tax charge in the Statement of Profit and Loss for the year ended 31st March, 2015.

3. SECURITIES AND TERMS OF LOANS TAKEN:

a) Secured loans:

Foreign currency term loan in form of ECB of Rs. 19574.81 Lakh (previous year Rs. 21897.93 Lakh) from Axis Bank Limited is secured by way of first charge on all movable and immovable assets of 36 MW Wind Power Project at Mahidad, Gujarat, and exclusive charge on movable fixed asset of DPTFE plant located at Plot No.12-A, GIDC Estate, Village – Dahej, Taluka -Vagra, District -Bharuch, Gujarat. Further, the Lender also has a charge/lien over the receivables, assignment of rights under the project agreements and escrow account relating to 36 MW Wind power Project at Mahidad. This term loan is repayable in 40 equal quarterly installment starting from 15th June 2012 and carries interest @ 3 months LIBOR plus 4.25% p.a. Out of total sanctioned ECB of USD 49 million, ECB of USD 25 million was hedged at the rate of 11.26% p.a. w.e.f. 11th October, 2012.

Foreign Currency Term Loan in form of ECB of Rs. 8024.54 Lakh (previous year Rs. 8877.81Lakh) from ICICI Bank Limited is secured by way of an exclusive first ranking security interest/mortgage/hypothecation on movable and immovable fxed assets including cash fow receivables and escrow account of 14 MW Wind Power Project at Mahidad. Further the Lender has frst & exclusive charge on movable fxed assets of AHF & HCFC Plant located at Survey No 16/3, 26 & 27, Village Ranjitnagar 389380, Taluka Ghoghamba, District Panchmahal, Gujarat. This term loan is repayable in 20 equal half yearly installments starting from 20th September, 2013 and carries interest @ 6 months LIBOR plus 4.14% p.a. Out of ECB of USD 16.47 million, ECB of USD 10 million was hedged at the rate of 10.55% p.a. w.e.f. 9th April, 2014.

Foreign Currency Term Loan in form of ECB of Rs. 2258.25 Lakh (previous year Rs.4516.50 Lakh) from DBS Bank Limited is secured by frst pari-passu charge over moveable fixed assets of the Company at Plot No.12-A, GIDC Estate, Village – Dahej, Taluka Vagra, District Bharuch except assets pertaining to 18 MW coal based captive power plant, DPTFE & PTPTFE plant. The term loan is repayable in 16 equal quarterly installments starting from 14thApril, 2012 and carries interest @ 8.65% p.a.

Working Capital Demand Loan of Rs. Nil (previous year Rs. 2500.00 Lakh) was repayable in 180 days and carried interest @ 10%p.a. and over draft facility of Rs. 1798.08 Lakh (previous year Rs. 2107.28 Lakh) from HDFC Bank Limited carries interest @ 10.75% p.a.and is secured by first pari-passu charge in favour of the bank by way of hypothecation over the borrower''s stock and receivables, both present and future, of the Company''s unit located at Plot No.12-A, GIDC Estate, Village – Dahej, Taluka - Vagra, District Bharuch, Gujarat.

FCNR loan facility of Rs. Nil (previous year Rs. 3860.13 Lakh) was repayable in 214 days and carried interest @ 3 month LIBOR plus 1.65% p.a. and working Capital Loans in the form of buyers credit of Rs.4165.37 Lakh (previous year Rs. 767.28 Lakh) repayable in 240 days to 330 days carrying interest ranging @ 8 month LIBOR plus 0.95% p.a. to 12 month LIBOR plus 0.95% p.a. from The Royal Bank of Scotland are secured by way of frst pari-passu charge in favour of the bank by way of hypothecation over the borrower''s stock and receivables, both present and future, of the Company''s unit located at Plot No.12-A, GIDC Estate, Village – Dahej, Taluka - Vagra, District Bharuch, Gujarat.

b) Unsecured loans:

Unsecured working capital Loans from ICICI Bank Limited, in the form of buyers credit of Rs. Nil (previous year Rs.490.53 Lakh) carried interest ranging from 12 month LIBOR plus 0.70% p.a. to 12 month LIBOR plus 0.87% p.a. and was repayable in 297 days to 300 days.

Unsecured working capital Loans from ING Vysya Bank Limited, in the form of buyer''s credit of Rs. 7618.17 Lakh (previous year Rs. 207.86 Lakh) carries interest ranging from 12 month LIBOR plus 0.51% p.a. to 12 month LIBOR plus 1.00% p.a. and is repayable in 269 days to 330 days.

Unsecured working capital Loan from BNP Paribas in form of Working capital demand loan of Rs. 4900.00 Lakh (previous year Rs. 6000.00 Lakh) carrying interest @ 9.35% p.a. is repayable in 29 days and foreign currency working capital loan in form of PCFC of Rs. 4694.97 Lakh (previous year Rs.Nil) carrying interest @ 6 month EURIBOR plus 0.45% p.a. and 6 month EURIBOR plus 0.60% p.a. is repayable in 180 days, and Rupee PC of Rs. Nil (previous year Rs. 4000 Lakh) carrying interest @ 9.75% p.a. was repayable in 180 days.

Unsecured foreign currency working capital loan from Citibank N.A. in form of FCNR of Rs. 2525.86 Lakh (previous year Rs. 2932.43 Lakh) carries interest @ 12 month LIBOR plus 2.00% p.a. and is repayable in 365 days.

Unsecured Foreign currency working capital loan from IDBI Bank Limited, in form of PCFC of Rs. 1901.49 Lakh (previous year Rs. Nil) carries interest @ 6 month LIBOR plus 0.60% p.a. and is repayable in 180days.

Unsecured foreign currency working capital loan from Yes Bank Limited, in form of Buyer''s credit of Rs.3335.19 Lakh (previous year Rs. Nil) carries interest from 12 month LIBOR plus 0.59% p.a. to 12 month LIBOR plus 1.05% p.a. and is repayable in 268 days to 330 days.

Unsecured working capital demand loan of Rs. Nil (previous year Rs. 1500 Lakh) from HDFC Bank carried interest @ 10.05% p.a. was repayable in 180 days.

Commercial papers of Rs. 10893.49 Lakh (previous year Rs. Nil), net of unamortised interest of Rs.106.51 Lakh (previous year Rs. Nil) is repayable in 139 days and 171 days. Discount on commercial paper varies between 8.50% to 9.30% p.a. Maximum balance during the year is Rs.13500 Lakh (previous year Rs. 12500 Lakh).

Unsecured working capital demand loan from Societe Generale Bank, in form of WCDL of Rs. Nil (previous year Rs. 1000 Lakh) carried interest @ 10% p.a.and was repayable in 180 days.

Unsecured foreign currency working capital loan from The Royal Bank of Scotland, in form of FCNR of Rs. Nil (previous year Rs. 2412.15 Lakh) carried interest @ 3 month EURIBOR plus 1.75% p.a. and was repayable in 181 days & 273 days and in form of Short term loan of Rs. Nil (previous year Rs.1500 Lakh) carried interest @ 10% p.a.and was repayable in 7 days.

Unsecured working capital loan from Kotak Mahindra Bank Ltd, in form of Rupee PC of Rs. Nil (previous year Rs. 3500.00 Lakh) carried interest @ 10% p.a.and was repayable in 128 days.

Unsecured foreign currency working capital loan from Indusind Bank Ltd, in form of PCFC of Rs. Nil (previous year Rs. 2424.52 Lakh) carried interest @ 6 month EURIBOR plus1% p.a. and was repayable in 177 days.

4. CONTINGENT LIABILITIES:

a) Claims against the Company not acknowledged as debt – in respect of claim by a service provider - Rs. 7.22 Lakh (previous year Rs. 7.22 Lakh):

b) Income tax demands – Rs. 8093.33 Lakh (previous year Rs. 8216.06 Lakh)

The Company has received CIT(A) order for the Assessment Year 2008-09 and for the Assessment Year 2009-10, wherein the CIT(A) has confrmed the action of the Assessing Ofcer in respect of

i) treatment of Investment activity of the Company in respect of investment in shares as a business activity, and

ii) re-computation of the amount of deduction u/s 80IA by applying the regulatory prices in respect of power generated at its captive power units.

The Company has not accepted the orders of the CIT(A) and has preferred appeal before ITAT, Ahmedabad. The said issues were decided in favour of the Company by CIT(A) in earlier years. Consequently, the amount of demands in respect of the above are included in the amount of contingent liabilities including for subsequent years where assessment orders are received. Amount of Rs.8093.33 Lakh (previous year Rs.8093.33 Lakh) has been paid in respect of above Income Tax demands and not charged to the Statement of Profit and Loss.

c) Service tax demands – Rs. 417.67 Lakh (previous year Rs. 280.51 Lakh). This includes:

Amount of Rs. 410.83 Lakh (previous year Rs. 273.66 Lakh) for which the Company has received various show cause notices regarding levy of service tax on certain items. The Company has fled the replies or is in the process of fling replies.

d) Excise duty demands – Rs. 2816.65 Lakh (previous year Rs. 2286.71 Lakh). This includes:

i) Amount of Rs. 2189.12 Lakh (previous year Rs. 1716.90 Lakh) for which the Company has received various show cause notices regarding service tax input credit on certain items and inter-unit transfers. The Company has fled the replies or is in the process of fling replies.

ii) Amount of Rs. 627.53 Lakh (previous year Rs. 569.81 Lakh) in respect of demand on account of cenvat credit availed on certain items and levy of excise duty on freight recovered from customers. The Company has fled appeal before CESTAT and the matters are pending.

e) Custom duty demands – Rs. 973.57 Lakh (previous year Rs. 987.51 Lakh)

In respect of demands on account of differential custom duty on imported material on high seas basis. The Company has fled appeal before CESTAT and the matters are pending. Amount of Rs. 40.17 Lakh (previous year Rs. Nil) has been paid in respect of above Custom duty demand and not charged to the Statement of Proft and Loss.

f) Electricity duty demands – Rs. Nil Lakh (previous year Rs. 1204.86 Lakh)

In respect of demand on account of electricity duty on cancellation of exemption certificate. During the year, the Company has received favorable order on this matter.

g) Claims in respect of labour matters – amount is not ascertainable

h) Corporate guarantee given to bank in respect of loan taken by a step-down-subsidiary – Rs. 1062.50 Lakh (previous year Rs. Nil) – equivalent to USD 1.70 million (previous year USD Nil).

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

5. COMMITMENTS:

i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 9829.64 Lakh (previous year Rs. 13436.25 Lakh)

ii) Other commitments –

a) The Company has provided an undertaking to one of the lenders of its subsidiary, Inox Renewables Limited (IRL), to provide additional funds to IRL, in case of any short fall in the resources of IRL for completing its project/or for working capital.

b) The Company has provided an undertaking to one of the lenders of its step subsidiary Inox Renewables Jaisalmer Limited (IRJL) to provide funds to IRJL equal to the amount of defciency to meet the project financial completion date (PFCD) or to meet all its financial obligation due and payable prior to PFCD.

6. In the previous year, the Income-tax authorities have carried out survey proceedings u/s 133A of the Income-tax Act, 1961 at the Company''s corporate office. The Company has made detailed submissions on various issues raised during the course of survey proceedings and does not expect any material demand in this connection.

7. SEGMENT INFORMATION

(A) Information about Primary (Business) Segment

The Company operates in single business segment of "Chemicals" - Comprising of Refrigerant gases, Anhydrous Hydrochloric acid, Caustic-Chlorine, Chloromethane, PTFE, PT-PTFE and revenue from Carbon Credits. Electricity generated by Captive power plants is consumed in Chemical Business and not sold outside. Accordingly, the same is a part of the Chemical Business.

8. The Company has a Joint Venture interest of 33.77% in Xuancheng Hengyuan Chemical Technology Company Ltd., a company incorporated in the People''s Republic of China. As at 31st March, 2015 the Company has invested a sum of Rs.1263.89 Lakh in the share capital of this Joint Venture.

The JVC is engaged in the business of manufacture of anhydrous hydrogen fluoride and allied activities.

a) The financial year of the JVC is January to December. The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st December, 2014 are as under:

9. The Company has a Joint Venture interest of 25% in Swarnim Gujarat Flourspar Private Limited, a Company incorporated in India. As at 31st March, 2015, the Company has invested a sum of Rs.108.25 Lakh in the share capital of this Joint Venture.

The JVC is proposed to be engaged in the business of manufacture of Acid Grade Fluorspar and allied activities.

10. RELATED PARTY DISCLOSURES:

(i) Names of Related Parties

(A) Where control exists:

Holding Company –

Inox Leasing and Finance Limited

Subsidiary Companies –

Inox Leisure Limited

Inox Infrastructure Limited

Inox Wind Limited (IWL)

Inox Wind Infrastructure Services Limited (IWISL)- subsidiary of IWL

Marut Shakti Energy Limited- subsidiary of IWISL (w.e.f. 13th September, 2013)

Inox Renewables Limited (IRL)

Inox Renewables (Jaisalmer) Limited- Subsidiary of IRL

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

Gujarat Fluorochemicals Singapore Pte Limited

GFL GM Fluorspar SA -Subsidiary of GFL Singapore Pte. Limited

Gujarat Fluorochemicals GmbH,Germany (Incorporated on 6th September, 2013)

Satyam Cineplexes Limited –Subsidiary of Inox Lesisure Limited (w.e.f. 8th August, 2014)

Shouri Properties Private Limited –Subsidiary of Inox Lesisure Limited (w.e.f. 24th November, 2014)

(B) Other related parties with whom there are transactions during the year: Joint Venture –

Xuancheng Hengyuan Chemical Technology Co. Ltd (XHCT Co. Ltd) Swarnim Gujarat Fluorspar Private Limited

Key Management Personnel –

Mr. V K Jain (Managing Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. J S Bedi (Whole Time Director)

Mr. Paresh Trivedi (Whole Time Director) w.e.f. from 22nd October, 2013 upto 27th June, 2014

Relatives of Key Management Personnel –

Mr. D K Jain (Father of Shri V K Jain)

Mr. P K Jain (Brother of Shri V K Jain)

Enterprises over which Key Management Personnel, or their relatives, have significant influence –

Devansh Gases Private Limited

Devansh Trading and Finance Private Limited

Inox India Limited

Inox Air Products Limited

Inox Chemicals Private Limited

Refron Valves Limited

Rajni Farms Private Limited

Sidhapavan Trading and Finance Private Limited

Siddho Mal Investments Private Limited

11. Excise Duty collected on Sale of products and other operating revenue is reduced from gross Sale of products and other operating revenue. Excise Duty of Rs. 50.66 Lakh (previous year Rs.49.34 Lakh) comprising of payments on other accounts is charged to the Statement of Proft and Loss separately and included in Excise Duty, Custom Duty and Sales Tax in note 32.


Mar 31, 2014

1.0 Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, in proportion of their shareholding, after distribution of all preferential amounts, if any. During the year the Company has paid interim dividend of Rs. Nil per equity share (previous year Re. 1.50 per equity share). Further, final dividend of Rs. 3.50 per equity share (previous year Rs. 2.00 per equity share) is proposed to be distributed to the equity shareholders. The total distribution of dividend to the equity shareholders for the year is Rs. 3.50 per share (previous year Rs. 3.50 per share).

1.2 For nature of securities and terms of repayment (see note number 33).

1.3 For nature of securities and terms of repayment (see note number 33).

2. Securities and terms of loans taken:

a) Secured loans :

Foreign Currency Term Loan of Rs. 21897.93 lacs (previous year Rs.23489.85 lacs) from Axis Bank Limited is secured by way of first charge on all movable and immovable assets of Mahidad (36 MW), Gujarat, and exclusive charge on movable fixed asset of DPTFE plant located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. Further, the lender also has a charge/lien over the Receivables and escrow account relating to Mahidad (36 MW). The term loan is repayable in 40 equal quarterly instalments starting from 15th June 2012 and carries interest @ 3 months LIBOR plus 4.25% p.a. Out of total sanctioned ECB of USD 49 million, ECB of USD 25 million is at the rate of 11.26% p.a. w.e.f. 11th October, 2012, being hedged.

Foreign Currency Term Loan of Rs. 8877.81 lacs (previous year Rs. 8940.24 lacs) from ICICI Bank Limited is secured by way of an exclusive first ranking security interest/ mortgage/hypothecation on movable and immovable fixed assets including cash flow and receivables of project assets, Mahidad (14 MW). Further, the lender also has a charge/lien over the escrow account. The lender has charge/lien on companies investment in mutual fund (2 crore unit of Tata Fixed Maturity plan series 42 Scheme I plan A Growth mutual fund, Folio No 2661548/08) of Rs. 20 crore only. The term loan is repayable in 20 equal half yearly instalments starting from 20th September, 2013 and carries interest @ 6 months LIBOR plus 4.14% p.a. Foreign Currency Term Loan of Rs. 4516.50 lacs (previous year Rs.6774.75 lacs) from DBS Bank Limited is secured by first pari passu charge over moveable fixed assets of the Company at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch except assets pertaining to 18 MW coal based captive power plant, DPTFE & PTPTFE plant. The term loan is repayable in 16 equal quarterly instalments starting from 14th April, 2012 and carries interest @ 8.65% p.a. Foreign Currency Term Loan of Rs. Nil (previous year Rs. 1400.13 lacs) from BNP Paribas Limited was secured by hypothecation of all movable property of the Company''s 18 MW coal based captive power plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. The term loan was repayable in 16 equal quarterly instalments starting from 9th April, 2010 and carried interest @ 7.07% p.a.

Foreign Currency unsecured Term Loan of Rs. Nil (previous year Rs.417.28 lacs) from Citibank NA was secured by first pari passu charge over Company''s fixed assets situated at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat (Security was never created). The term loan was repayable in 16 equal quarterly instalments starting from 3rd July, 2009 and was carrying interest @ 6 months LIBOR plus 4.00% p.a.

Working Capital Demand Loans (WCDL) of Rs.2500 lacs (previous year Rs Nil) and over draft facility of Rs.2107.28 lacs (previous year Rs. 1559.82 lacs) from HDFC Bank Limited is secured by first pari passu charge over stock and book debts of the Company''s Dahej Plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. The WCDL loan is for a period of 180 days and carries interest @ 10.00% p.a. Over draft facility carries interest @ 11.40% p.a. Working Capital Loans in the form of buyers credit of Rs. 767.28 lacs (previous year Rs. 1590.57 lacs), over draft facility of Rs. Nil, (previous year Rs. 2870.00 Lacs) and FCNR loan facility of Rs. 3860.13 lacs (previous year Rs. Nil) from The Royal Bank of Scotland is secured by way of first pari passu charge in favour of the bank by way of hypothecation over the borrower''s stock and receivables, both present and future of the Company''s unit at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. Buyer''s credit is repayable in 118 days to 327 days carrying interest ranging @ 4 month LIBOR plus 1.00% to 11 month LIBOR plus 0.90%, and overdraft facility was repayable on demand and was carrying interest @ 9.90% p.a., FCNR loan facility is granted for 214 days tenure at cost of 3 month LIBOR plus 1.65%.

b) Unsecured loans:

Foreign Currency working capital unsecured loans in the form of Buyers credit of Rs. Nil (previous year Rs. 108.42 lacs), PCFC loan of Rs.2424.52 lacs (previous year Rs. 11705.15 lacs) and FCNR facility of Rs.5344.58 lacs (previous year Rs. 3225.96 lacs) from various banks are repayable in the period ranging from 177 days to 360 days carrying interest ranging @ 9 month LIBOR plus 0.60% to 12 month LIBOR plus 2.25%, and 3 month EURIBOR plus 1.75% & 6 month EURIBOR plus 1.00%. Unsecured overdraft facility from The Royal Bank of Scotland amounting to Rs. Nil (previous year Rs. 12060.15 lacs) was repayable on demand & was carrying interest @ 9.90% p.a.

Unsecured Working Capital Loans in the form of buyers credit of Rs. 490.53 lacs (previous year Rs Nil) from ICICI Bank Limited is repayable in 297 days to 300 days carrying interest ranging @ 12 month LIBOR plus 0.70% to 12 month LIBOR plus 0.87% Unsecured Working Capital Loans in the form of buyers credit of Rs. 207.86 lacs (previous year Rs Nil) from ING Vysya Bank Limited is repayable in 269 days to 330 days carrying interest ranging @ 9 month LIBOR plus 0.60% to 12 month LIBOR plus 0.75%.

Working Capital unsecured rupee loans from various banks amounting to Rs. 17500.00 lacs (previous year Rs. 12500.00 lacs) are repayable in the period ranging from 7 days to 358 days carrying interest ranging @ 9.75% to 10.05% p.a. Unsecured overdraft facility from The Royal Bank of Scotland amounting to Rs. Nil (previous year Rs. 12060.15 lacs) was repayable on demand & carried interest @ 9.90% p.a.

3. Other operating revenues includes Rs. Nil (previous year Rs. 8673.75 lacs) being settlement amount received on cancellation of contract.

4. Contingent Liabilities and Commitments

(A) Contingent Liabilities Amount Rs. in Lacs

Particulars 2013-2014 2012-2013

(a) Claims against Company not acknowledged as debt 7.22 7.22

(b) Other

Income Tax 8216.06 8711.37

Service Tax 1155.46 924.34

Excise Duty 1411.73 849.66

Custom Duty 987.51 1222.97

Electricity Duty 1204.86 1204.86

Claims in respect of labour matters Amount is not ascertainable

Notes:

(a) Amount of Rs. 8093.33 lacs (previous year Rs. 5488.43 lacs) has been paid in respect of above Income Tax demands and not charged to the Statement of profit and loss.

(b) The Company has received CIT(A) order for the Assessment Year 2008-09 and for the Assement Year 2009-10, where in the CIT(A) has confirmed the action of the Assessing Officer in respect of

i. treatment of Investment activity of the Company in respect of investment in shares as a business activity and

ii. the re-computation of the amount of deduction u/s 80IA by applying the regulatory prices in respect of power generated at its captive power units.

The Company has not accepted the orders of the CIT(A) and has preferred appeal before ITAT, Ahmedabad. The said issues were decided in favour of the Company by CIT(A) in earlier years. Consequently, the amount of demands in respect of the above are included in the amount of contingent liabilities in para (A) including for subsequent years where assessment orders are received.

(c) During the year, the Income Tax authorities have carried out survey proceedings u/s 133A of the Income Tax Act, 1961 at the Company''s corporate office. The Company has made detailed submissions on various issues raised during the course of survey proceedings and does not expect any material demand in this connection.

5. Segment Information

(A) Information about Primary (Business) Segment:

The Company operates in single business segment of "Chemicals" - Comprising of Refrigerant gases, Anhydrous Hydrochloric acid, Caustic-Chlorine, Chloromethane, PTFE, PT-PTFE and revenue from Carbon Credits. Electricity generated by Captive power plants is consumed in Chemical Business and not sold outside. Accordingly, the same is a part of the Chemical Business.

As the Company has integrated manufacturing facilities, it is not possible to directly attribute or allocate on a reasonable basis, the expenses, assets and liabilities to these geographical segments.

6. Discontinued operations

a) Slump Sale of Wind Energy Business :

In the Financial year 2011-12, the Company had transferred the entire Wind Energy Business, which was a major part of power segment as per AS 17, Segment Reporting, to a subsidiary Inox Renewables Limited, by way of Slump Sale w.e.f. close of business on 30th March, 2012.This has been reported as discontinued operations by the Company.

7. The Company has a Joint Venture interest of 33.77% in Xuancheng HengYuan Chemical Technology Company Ltd., a company incorporated in the People''s Republic of China. As on 31.03.2014 the Company has invested a sum of Rs.1263.89 Lacs in the share capital of this Joint Venture.

The JVC is engaged in the business of manufacture of anhydrous hydrogen fluoride and allied activities.

8. The Company has a Joint Venture interest of 25% in Swarnim Gujarat Flourspar Private Limited, a company incorporated under the Companies Act, 1956 on 19th June, 2012. As on 31st March, 2014 the Company has invested a sum of Rs. 1.25 Lacs in the share capital of this Joint Venture. During the year company has made payment of Rs.32 lacs towards share application money.

The JVC is proposed to be engaged in the business of manufacture of Acid Grade Fluorspar and allied activities.

b) The Company''s share of capital commitments in the JVC as at 31st March, 2014 is Rs. Nil (previous year Rs. 0.88 Lacs)

c) The Company''s share of contingent liability of the JVC as at 31st March, 2014 is Rs. Nil.

d) The Company''s transactions with JVC, being a related party, are disclosed in note no 50.

9. Related Party Disclosures :

(i) Names of Related Parties

(A) Where control exists:

Holding Company - Inox Leasing & Finance Limited Subsidiary Companies - Inox Leisure Limited

Inox Infrastructure Limited

Inox Wind Limited (IWL)

Inox Wind Infrastructure Services Limited (IWISL) - Subsidiary of IWL (Incorporated on 11th May 2012)

Marut Shakti Energy Limited- Subsidiary of IWISL (w.e.f. 13th September, 2013)

Inox Renewables Limited (IRL)

Inox Renewables Jaisalmer Limited- Subsidiary of IRL (Incorporated on 24th July, 2012)

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

GFL Singapore Pte Limited

GFL GM Fluorspar SA -Subsidiary of GFL Singapore Pte. Limited

Gujarat Fluorochemicals GmbH, Germany (Incorporated on 6th September, 2013)

(B) Other related parties with whom there are transactions during the year:

Joint Venture

Xuancheng HengYuan Chemical Technology Co. Ltd (XHCT Co. Ltd) Swarnim Gujarat Fluorspar Private Limited (Incorporated on 19th June, 2012)

Key Management Personnel

Mr. V K Jain (Managing Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. J S Bedi (Whole Time Director)

Mr. G Arumugam (Whole Time Director) upto 22nd June, 2012

Mr. Paresh Trivedi (Whole Time Director) w.e.f. 22nd October, 2013

Relatives of Key Management Personnel- Mr. D K Jain (Father of Shri V K Jain)

Mr. P K Jain (Brother of Shri V K Jain) Mr. Devansh Jain (Son of Shri V K Jain)

Enterprises over which Key Management Personnel, or his relative, has significant influence -

Devansh Gases Private Limited Refron Valves Limited

Devansh Trading and Finance Private Limited Rajni Farms Private Limited

Inox India Limited Sidhapavan Trading and Finance Pvt. Ltd.

Inox Air Products Limited Siddho Mal Investments Private Limited

Inox Chemicals Private Limited

10. Employee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs.323.80 lacs (Previous Year Rs. 302.81 lacs) 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 amounts recognized in respect of Gratuity and Leave Encashment - as per Actuarial valuation as on 31st March, 2014.

C) The Company''s other significant leasing arrangements are in respect of operating leases for premises (offices and residential accommodations) taken on lease. These lease arrangements are cancellable, range between 11 months to 60 months and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals are charged as expenses in the Statement of Profit and Loss.

11. Excise Duty collected on Sale of products and other operating revenue is reduced from gross Sale of products and other operating revenue. Excise Duty of Rs. 49.34 Lacs (previous year Rs 37.89 Lacs) comprising of payments on other accounts is charged to Statement of Profit and Loss separately and included in Excise Duty, Custom Duty and Sales Tax in note 32.


Mar 31, 2013

1. CORPORATE INFORMATION

Gujarat Fluorochemicals Limited (the "Company") is a public limited company engaged in the business of manufacturing and trading of Refrigeration Gases, Anhydrous Hydrochloric Acid, Caustic Soda, Chlorine, Chloromethanes, Poly Tetrafluoroethylene (PTFE), Post Treated Poly Tetrafluorethylene (PTPTFE) and revenue from carbon credits. The Company caters to both domestic and international markets. The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange of India. The Company is a subsidiary of Inox Leasing and Finance Limited.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, under the historical cost convention and on accrual basis. These financial statements comply in all material respects with the applicable Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

Figures of the previous year have been regrouped or rearranged, wherever necessary, to make them comparable with those of the current year.

3. Securities and terms of repayment in respect of secured loans:

Rupee Term Loan of Rs. NIL (previous year Rs. 1111.05 lacs) from Oriental Bank of Commerce was secured by the way of lease hold land and building and hypothecation of all movable fixed assets of the Company situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat, excluding assets related to Company''s 18 MW coal based captive power plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, on first pari passu basis and by way of second pari passu charge over fixed assets situated at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat, except for R23 incineration project. The term loan was repaid in 16 equal quarterly instalments starting from 31st May 2008 and carried interest @ 8.50% p.a.

Foreign Currency Term Loan of Rs. 23489.85 lacs (previous year Rs 24929.24 lacs) from Axis Bank Limited is secured by way of first charge on all movable and immovable assets of Mahidad (36 MW), Gujarat, and exclusive charge on movable fixed asset of DPTFE plant located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. Further, the lender also has a charge/lien over the Receivables and escrow account relating to Mahidad (36 MW). The term loan is repayable in 40 equal quarterly instalments starting from 15th June 2012 and carries interest @ 3 months LIBOR plus 4.25% p.a. Out of total sanctioned ECB of USD 49 million, ECB of USD 25 million is at the rate of 11.26% p.a. w.e.f. 11th October 2012, being hedged.

Foreign Currency Term Loan of Rs. 8940.24 lacs (previous year Rs. 8379.58 lacs) from ICICI Bank Limited is secured by way of an exclusive first ranking security interest/ mortgage/hypothecation on movable and immovable fixed assets including cash flow and receivables of project assets, Mahidad (14 MW). Further, the lender also has a charge/lien over the escrow account. Company is in the process of creation of security on the said loan. The term loan is repayable in 20 equal half yearly instalments starting from 20th September 2013 and carries interest @ 6 months LIBOR plus 4.14% p.a.

Foreign Currency Term Loan of Rs. 6774.75 lacs (previous year Rs. 9033.00 lacs) from DBS Bank Limited is secured by first pari passu charge over moveable fixed assets of the Company at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch except assets pertaining to 18 MW coal based captive power plant, DPTFE & PTPTFE plant. The term loan is repayable in 16 equal quarterly instalments starting from 16th April 2012 and carries interest @ 8.65% p.a.

Foreign Currency Term Loan of Rs. 1400.13 lacs (previous year Rs. 2800.25 lacs) from BNP Paribas Limited is secured by hypothecation of all movable property of the Company''s 18 MW coal based captive power plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. The term loan is repayable in 16 equal quarterly instalments starting from 9th April 2010 and carries interest @ 7.07% p.a.

Foreign Currency Term Loan of Rs. 417.28 lacs (previous year Rs. 1955.55 lacs) from Citibank NA is secured by first pari passu charge over Company''s fixed assets situated at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat (Security is yet to be created). The term loan is repayable in 16 equal quarterly instalments starting from 3rd July 2009 and carries interest @ 6 months LIBOR plus 4.00% p.a.

Working Capital Loans of Rs. 1559.82 lacs (previous year Rs. 3014.61 lacs) from HDFC Bank Limited is secured by first pari passu charge over stock and book debts of the Company''s Dahej Plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. The loan was repayable on demand and carries interest @ 11.00% p.a.

Working Capital Loans in the form of buyers credit of Rs. 1590.57 lacs (previous year Rs. 5410.46 lacs) and over draft facility of Rs 2870.00 lacs (previous year Nil) from The Royal Bank of Scotland is secured by way of first pari passu charge in favour of the bank by way of hypothecation over the borrower''s stock and receivables, both present and future of the Company''s unit at Plot No.12- A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat. Buyers credit is repayable in 30 days to 330 days carrying interest ranging @ 1 month LIBOR plus 1.65% to 11 month LIBOR plus 1.65%, and overdraft facility is repayable on demand and carries interest @ 9.90%p.a.

Foreign Currency working capital unsecured loans from various banks amounting to Rs.15039.53 lacs (previous year Rs. 23483.54 lacs) are repayable in the period ranging from 178 days to 355 days carrying interest ranging @ 1 month LIBOR plus 1.5% to LIBOR plus 1.95%.

Working Capital unsecured rupee loans from various banks amounting to Rs.12500.00 lacs (previous year Rs. 5000.00 lacs) are repayable in the period ranging from 89 days to 180 days carrying interest ranging @ 9.50% to 10.00%.

Unsecured overdraft facility from The Royal Bank of Scotland amounting to Rs.12060.15 lacs (previous year Rs. Nil) is repayable on demand carrying interest @ 9.90%.

4. Other operating revenues includes Rs. 8673.75 lacs (previous year Nil) being settlement amount received on cancellation of contract.

5. Contingent Liabilities and Commitments (To the extent not provided for)

(A) Contingent Liabilities Amount Rs. in Lacs

Particulars 2012-2013 2011-2012

(a) Claims against Company not acknowledged as debt 7.22 7.22

(b) Other

Income Tax 8711.37 5488.43

Service Tax 924.34 466.39

Excise duty 849.66 755.45

Custom Duty 1222.97 0.00

Electricity Duty 1204.86 1204.86

Note:

(a) Amount of Rs. 5488.43 lacs (previous year Rs. 5452.90 lacs) has been paid in respect of above Income Tax and Service Tax demands and not charged to the Statement of profit and loss.

(b) The Company has received CIT(A) order for the Assessment Year 2008-09 and for the AY 2009-10, where in the CIT(A) has confirmed the action of the Assessing Officer in respect of

i. treatment of Investment activity of the Company in respect of investment in shares as a business activity and

ii. the re-computation of the amount of deduction u/s 80IA by applying the regulatory prices in respect of power generated at its captive power units.

The Company has not accepted the orders of the CIT(A) and has preferred appeal before ITAT, Ahmedabad. The said issues were decided in favour of the Company by CIT(A) in earlier years. Consequently, the amount of demands in respect of the above are included in the amount of contingent liabilities in para (A) including for subsequent years where assessment orders are received.

6. Discontinued operations

a) Slump Sale of Wind Energy Business :

In the previous year, the Company has transferred the entire Wind Energy Business, which was a major part of power segment as per As 17, Segment Reporting, to a subsidiary Inox Renewables Limited, by way of Slump Sale w.e.f. close of business on 30th March, 2012 for a total value of Rs. 100.00 Lacs. This has been reported as discontinued operations by the Company.

7. The Company has a Joint Venture interest of 33.77% in Xuancheng Hengyuan Chemical Technology Company Ltd., a company incorporated in the People''s Republic of China. As on 31.03.2013 the Company has invested a sum of Rs.1263.89 Lacs in the share capital of this Joint Venture.

The JVC is engaged in the business of manufacture of Anhydrous Hydrogen Fluoride and allied activities.

a) The financial year of the JVC is January to December. The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st December 2012 are as under:

b) The Company''s share of capital commitments in the JVC as at 31st December, 2012 is Rs. Nil (previous year Nil).

c) The Company''s share of contingent liability of the JVC as at 31st December, 2012 is Rs. Nil (previous year Nil).

d) The Company''s transactions with JVC, being a related party, are disclosed in note no 50.

8. The Company has a Joint Venture interest of 25% in Swarnim Gujarat Flourspar Private Limited., a company incorporated under the Companies Act, 1956 on 19th June, 2012. As on 31st March,2013 the Company has invested a sum of Rs.1.25 Lacs in the share capital of this Joint Venture.

The JVC is engaged in the business of manufacture of Acid Grade Fluorspar and allied activities.

a) The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st March, 2013 are as under:

b) The Company''s share of capital commitments in the JVC as at 31st March, 2013 is Rs. 0.88 Lacs.

c) The Company''s share of contingent liability of the JVC as at 31st March, 2013 is Rs. Nil.

d) The Company''s transactions with JVC, being a related party, are disclosed in note no. 50.

9. Related Party Disclosures :

(i) Names of Related Parties

(A) Where control exists:

Holding Company:

Inox Leasing & Finance Limited

Subsidiary Companies:

Inox Leisure Limited

Inox Infrastructure Private Limited

Inox Motion Pictures Limited

Inox Wind Limited

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

Inox Renewables Limited

Inox Renewables Jaisalmer Limited- Subsidiary of Inox Renewables Limited (Incorporated on 24th July 2012)

Inox Wind Infrastructure Limited- Subsidiary of Inox Wind Limited (Incorporated on 11th May 2012)

GFL Singapore Pte Limited (Incorporated on 25th July 2011)

GFL GM Fluorspar SA (Incorporated on 16th August 2011 and a subsidiary upto 28th September 2011 and subsequently a subsidiary of GFL Singapore Pte Limited)

Following Companies amalgamated with Inox Leisure Limited w.e.f. 1st April 2012- Fame India Limited (Subsidiary of Inox Leisure Limited)

Fame Motion Pictures Limited (formerly Shringar Films Limited)

(Subsidiary of Fame India Limited)

Big Pictures Hospitality Services Private Limited (Subsidiary of Fame India Limited)

Headstrong Films Private Limited ((Subsidiary of Fame India Limited w.e.f. 27th March 2012)

(B) Other related parties with whom there are transactions during the year:

Joint Venture

Xuancheng Hengyuan Chemical Technology Co. Ltd (XHCT Co. Ltd)

Swarnim Gujarat Fluorspar Private Limited (Incorporated on 19th June, 2012)

Key Management Personnel

Mr. V K Jain (Managing Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. J S Bedi (Whole Time Director)

Mr. G Arumugam (Whole Time Director) upto 22nd June, 2012

Relatives of Key Management Personnel Mr. D K Jain (Father of Shri V K Jain)

Mr. P K Jain (Brother of Shri V K Jain)

Mr. Devansh Jain (Son of Shri V K Jain)

Enterprises over which Key Management Personnel, or his relative, has significant influence

Devansh Gases Private Limited

Devansh Trading and Finance Private Limited

Inox India Limited Inox Air Products Limited

Inox Chemicals Private Limited

Refron Valves Limited

Rajni Farms Private Limited

Sidhapavan Trading and Finance Private Limited

Siddho Mal Investments Private Limited

10. Excise Duty collected on Sale of products and other operating revenue is reduced from gross Sale of products and other operating revenue. Excise Duty of Rs. 37.89 Lacs (previous year Rs.14.72 Lacs) comprising of payments on other accounts is charged to Statement of Profit and Loss separately and included in Excise Duty, Custom Duty and Sales Tax in note 32.


Mar 31, 2012

1. CORPORATE INFORMATION

Gujarat Fluor chemicals Limited (the D Company D) is a public limited company engaged in the business of manufacturing and trading of Refrigeration Gases, Anhydrous Hydrochloric Acid, Caustic Soda, Chlorine, Chloromethane, Poly Tetra fluoroethylene (PTFE), Post Treated Poly Tetra fluorethylene (PTPTFE) and earns revenue from carbon credits. The Company caters to both domestic and international markets. The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange of India. The Company is a subsidiary of Inox Leasing and Finance Limited.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, under the historical cost convention and on accrual basis. These financial statements comply in all material respects with the applicable Accounting Standards notified under the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

Amounts in the financial statements are presented in Rs. Lacs, except for per share data.

During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also regrouped/reclassified the previous year figures in accordance with the requirements applicable in the current year.

1.1 Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Re 1 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, in proportion of their shareholding, after distribution of all preferential amounts, if any. During the financial year 2011-12 the Company has paid interim dividend of Rs. 2 per equity share (previous year Re 1 per equity share). Further, dividend of Rs. 1.50 per equity share (previous year Rs. 2.50 per equity share) is proposed to be distributed to the equity shareholders. The total distribution of dividend to the equity shareholders for the year is Rs. 3.50 per share (previous year Rs. 3.50 per share).

1.2 Details of shares bought back in the immediately preceding five years 59,30,000 Equity shares were bought back in the Financial Year 2008-09

3. Securities and terms of repayment in respect of secured loans:

Rupee Term Loan of Rs. 1111.05 lacs (previous year 3333.33 lacs) from Oriental Bank of Commerce is secured by the way of lease hold land and building and hypothecation of all movable fixed assets of the Company situated at Plot No.12-A, GIDC Estate, Village " Dahej, Taluka Vagra, District Bharuch, Gujarat, excluding assets related to Company's 18 MW coal based captive power plant situated at Plot No.12-A, GIDC Estate, Village " Dahej, Taluka Vagra, District Bharuch, on first pari passu basis and by way of second pari passu charge over fixed assets situated at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat, except for R23 incineration project. The term loan is repayable in 16 equal quarterly instalments starting from 31st May 2008 and carries interest @ 8.50% p.a.

As per the term of sanction, Foreign Currency Term Loan of Rs. 24929.24 lacs (previous year Rs Nil) from Axis Bank Limited is secured by way of first charge on all movable and immovable assets of Mahidad (36 MW), Gujarat, and Ossiya (10.50 MW) Rajasthan. Further, the lender also has a charge/lien over the escrow account. The Company has not yet created the above mention security. Further, Ossiya (10.50 MW) Rajasthan is transferred to Inox Renewables Limited under slump sale. Now the Company is in the process of creation of security on the said loan after considering the above. The term loan is repayable in 40 equal quarterly instalments starting from 15th June 2012 and carries interest @ 3 months LIBOR plus 4.25% p.a.

As per the term of sanction, Foreign Currency Term Loan of Rs. 8379.58 lacs (previous year Rs. Nil) from ICICI Bank Limited is secured by way of an exclusive first ranking security interest/ mortgage/hypothecation on movable and immovable fixed assets including cash flow and receivables of project assets Dangri (20 MW) Rajasthan, Mahidad (14 MW) and Ossiya (19.50 MW) and first pari-passu mortgage/hypothecation on movable and immovable fixed assets including cash flow and receivables of wind power assets located at Gude Panchgani (23.1 MW). Further, the lender also has a charge/lien over the escrow account. The Company has not yet created the above mention security. Further, Dangri (20 MW) Rajasthan, Ossiya (19.50 MW) Rajasthan and Gude Panchgani (23.1 MW) is transferred to Inox Renewables Limited under slump sale. Now the Company is in the process of creation of security on the said loan after considering the above. The term loan is repayable in 20 equal half yearly instalments starting from 20th September 2013 and carries interest @ 6 months LIBOR plus 4.14% p.a.

Foreign Currency Term Loan of Rs. 9033.00 lacs (previous year Rs. 9033.00 lacs) from DBS Bank Limited is secured by first pari passu charge over moveable fixed assets of the Company at Plot No.12-A, GIDC Estate, Village " Dahej, Taluka Vagra, District Bharuch except assets pertaining to 18 MW coal based captive power plant. The term loan is repayable in 16 equal quarterly instalments starting from 16th April 2012 and carries interest @ 8.65% p.a.

Foreign Currency Term Loan of Rs. 2800.25 lacs (previous year Rs. 4200.38 lacs) from BNP Paribas Limited is secured by hypothecation of all movable property of the Company's 18 MW coal based captive power plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, TalukaVagra, District Bharuch, Gujarat. The term loan is repayable in 16 equal quarterly instalments starting from 9th April 2010 and carries interest @ 7.07% p.a.

Foreign Currency Term Loan of Rs. 1955.55 lacs (previous year Rs. 3085.07 lacs) from Citibank NA is secured by first pari passu charge over Company's fixed assets situated at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat. Security is yet to be created. The term loan is repayable in 16 equal quarterly instalments starting from 3rd July 2009 and carries interest @ 3 months LIBOR plus 4.00% p.a.

Working Capital Loans of Rs. 3014.61 lacs (previous year Rs. 3278.99 lacs) from HDFC Bank Limited is secured by first pari passu charge over stock and book debts of the Company's Dahej Plant situated at Plot No.12-A, GIDC Estate, Village " Dahej, TalukaVagra, District Bharuch, Gujarat. The loan is repayable on demand and carries interest @ 12.80% p.a

Working Capital Loans of Rs. 5410.46 lacs (previous year Rs. 5118.13 lacs) from The Royal Bank of Scotland is secured by way of first pari passu charge in favour of the bank by way of hypothecation over the borrower's stock and receivables, both present and future of the Company's unit at Plot No.12-A, GIDC Estate, Village " Dahej, TalukaVagra, District Bharuch, Gujarat. The loan is repayable in 30 days to 330 days carrying interest ranging @ 1 month LIBOR plus 1.65% to 11 month LIBOR plus 1.65%.

Working Capital Loan of Rs. Nil (previous year Rs.1961.96 lacs) and Rs. Nil (previous year Rs. 2000.00 lacs) from Canara Bank were secured by way of first pari passu charge on current assets of the Company's unit at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat and second charge on fixed assets of the Company's unit at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat along with term lenders of the Company's unit at Plot No.12-A, GIDC Estate, Village " Dahej, Taluka Vagra, District Bharuch. The loan is repayable on demand and carries interest @ 6 month LIBOR plus 2.00% and 10.00% p.a. respectively.

Foreign Currency Term Loan of Rs. Nil (previous year Rs. 7237.66 lacs) from ICICI Bank Limited was secured by equitable mortgage of land and hypothecation of all movable property of the Company for wind mills situated at Gude Panchgani, District Sangli, Maharashtra. Further, the lender also had a charge/lien over the escrow account. The term loan was repayable in 38 equal quarterly instalments starting from 20th December 2007 and carries interest @ 5.86% p.a. This loan is transferred to Inox Renewables Limited under slump sale.

4. Contingent Liabilities and Commitments (To the extent not provided for)

(A) Contingent Liabilities Amount Rs. in Lacs

Particulars 2011-2012 2010-2011

(a) Claims against Company not acknowledge as debt 7.22 7.22

(b) Other

Sales Tax 4.13 7.12

Income Tax 5488.43 3191.25

Service Tax 466.39 268.93

Excise duty 755.45 0.00

Electricity Duty 1204.86 1317.30

Claims in respect of labour matters Amount is not ascertainable

Note:

(a) Amount of Rs. 5452.90 Lacs (previous year Rs. 149.38 Lacs) has beenpaid in respect of above Sales Tax, Income Tax, and Service Tax and Electricity duty demands and not charged to the Statement of profit and loss.

(b) During the year, the Company has received CIT(A) order for the Assessment Year 2008-09 where in the CIT(A) has confirmed the action of the Assessing Officer in respect of

i. treatment of Investment activity of the Company in respect of investment in shares as a business activity and

ii. the re-computation of the amount of deduction u/s 80IA by applying the regulatory prices in respect of power generated at its captive power units.

The Company has not accepted the order the of the CIT(A) and has preferred appeal before ITAT, Ahmadabad .The said issues were decided in favour of the Company by CIT(A) in earlier years. Consequently, the amount of demands in respect of the above are included in the amount of contingent liabilities in Para (A).

(C) Notes:

i) The Company is having various power generation facilities viz. Wind Mills, Gas Based Power Plant and Coal Based Power Plant and the power generated was used for captive consumption as well as sold outside.

During the year Company has sold power generation facilities which were in the business of generation and sale of power by way of Slump Sale to its wholly owned subsidiary Inox Renewable Limited and is reported as discontinued operations.

Power generation facilities which are generating and supplying power to the Chemical Business are retained. Electricity generated by these facilities is wholly consumed in Chemical Business and not sold outside. Accordingly, the same is now part of the Chemical Business and hence, the Company now operates in single business segments of ChemicalsD - Comprising of Refrigerant gases, Anhydrous Hydrochloric acid, Caustic-Chlorine, Chloromethane, PTFE, PT-PTFE and revenue from Carbon Credits.

ii) Chemicals business is operated in two geographical markets, in domestic and overseas market. In respect of power segment, the entire production is indigenously sold/consumed. The disclosures regarding geographical segments are made accordingly.

iii) The above segment information includes the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

45. Discontinuance of operations

a) Slump Sale of Wind Energy Business :

Pursuant to the decision in the meeting of the Board of Directors of the Company held on 31st January 2011 and the approval of the Shareholders of the Company through Postal Ballot on 15th March 2011, the Company has transferred the entire Wind Energy Business, which is a major part of power separate segment as per AS 17, Segment Reporting, to a subsidiary Inox Renewable Limited, by way of Slump Sale w.e.f. close of business on 30th March, 2012 for a total value of Rs. 100.00 Lacs.

5. The Company has a Joint Venture interest of 33.77% in Xuancheng Heng Yuan Chemical Technology Company Ltd., a company incorporated in the People's Republic of China. As on 31.3.2012 the Company has invested a sum of Rs.1263.89 Lacs in the share capital of this Joint Venture.

The JVC is engaged in the business of manufacture of Anhydrous Hydrogen Fluoride and allied activities.

6. Related Party Disclosures :

(i) Names of Related Parties

(A) Where control exists:

Holding Company:

Inox Leasing & Finance Limited Subsidiary Companies:

Inox Leisure Limited Inox Infrastructure Private Limited Inox Motion Pictures Limited Inox Wind Limited

Gujarat Fluor chemicals Americas LLC, U.S.A. (GFL Americas LLC)

Inox Renewable Limited (Incorporated on 11th November 2010)

Fame India Limited (Subsidiary of Inox Leisure Limited w.e.f. 06th January 2011)

Fame Motion Pictures Limited (formerly Shringar Films Limited)

(Subsidiary of Fame India Limited)

Big Pictures Hospitality Services Private Limited (Subsidiary of Fame India Limited)

Headstrong Films Private Limited ((Subsidiary of Fame India Limited w.e.f. 27th March 2012)

GFL Singapore Pte Limited(Incorporated on 25th July 2011)

GFL GM Fluorspar SA( Incorporated on 16th August 2011 and a subsidiary upto 28th September 2011 and subsequently a subsidiary of GFL Singapore Pte. Limited).

(B) Other related parties with whom there are transactions during the year:

Joint Venture

Xuancheng HengYuan Chemical Technology Co. Ltd (XHCT Co. Ltd)

Key Management Personnel

Mr. V K Jain (Managing Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. J S Bedi (Whole Time Director)

Mr. G Arumugam (Whole Time Director) w.e.f. 12th August 2011.

Relatives of Key Management Personnel Mr. D K Jain (Father of Mr. V K Jain)

Mr. P K Jain (Brother of Mr. V K Jain)

Mr. Devansh Jain (Son of Mr. V K Jain)

Enterprises over which Key Management Personnel, or his relative, has significant influence Devansh Gases Private Limited Devansh Trading and Finance Private Limited Inox India Limited Inox Air Products Limited Inox Chemicals Private Limited Refron Valves Limited Rajni Farms Private Limited Sidhapavan Trading and Finance Private Limited Siddho Mal Investments Private Limited

7. The remuneration paid to the Shri J.S Bedi & Shri D.K Sachdeva is in excess of the amounts approved in the Annual General Meeting. The same is subject to approval by the shareholders in the ensuing Annual General Meeting. Further, the remuneration paid to G Arumugam (Whole time director w.e.f. 12th August 2011) is subject to approval of the shareholders in the ensuing Annual General Meeting.

C) The Company's other significant leasing arrangements are in respect of operating leases for premises (offices and residential accommodations) taken on lease. These lease arrangements are cancellable, range between 11 months to 60 months and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals are charged as expenses in the Statement of Profit and Loss.

8. Excise Duty collected on Sale of products and other operating revenue is reduced from gross Sale of products and other operating revenue. Excise Duty of Rs. 14.72 lacs (previous year Rs. 22.94 lacs) comprising of payments on other accounts is charged to Statement of Profit and Loss separately and included in Excise Duty, Custom Duty and Sales Tax in note 30.


Mar 31, 2010

1. Up to last year, for valuation of inventories, cost was determined using FIFO method. From the current year, cost is determined using weighted average cost method since, in the opinion of the management, this change will result in more appropriate presentation of the financial statements of the Company. Due to this change, the value of inventories as at 31st March 2010 and the profit before tax for the year are higher by Rs. 905 lacs.

2. Figures of the previous year have been regrouped or rearranged, wherever necessary, to make them comparable with those of the current year.

3. During the year, the company has received compensation of Rs. 824.73 Lacs (previous year Rs. 629.64 Lacs), equivalent to US $ 1.75 million (previous year US $ 1.37 million), for phased reduction and cessation of CFC production and dismantling of plant, unless otherwise used, as stipulated. The Company has been advised that the compensation is a capital receipt and hence this amount is credited to Capital Reserve.

4. Foreign Currency Term Loan from ICICI Bank Limited is secured by equitable mortgage of land and hypothecation of all movable property of the Company for wind mills situated at Gude Panchgani, District Sangli, Maharashtra. Further, the lender also has a charge/lien over the escrow account, where the collections of sales of electricity are to be deposited.

Rupee Term Loans from United Bank of India, UCO Bank and Oriental Bank of Commerce are secured by joint equitable mortgage of lease hold land and building and hypothecation of all movable fixed assets of the Company situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat on first pari passu basis and by way of second pari passu charge over fixed assets situated at Survey No.16/3, 26 and 27, Village Ranjitnagar, Taluka Goghamba, District Panchmahals, Gujarat.

Working Capital Loans from HDFC Bank Limited and ABN Amro Bank N.V. are secured by first pari passu charge over stock and book debts of the Companys Dahej Plant situated at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat.

Working Capital Loan from Canara Bank is secured by equitable mortgage of land and hypothecation of stocks and book debts of the Companys refrigerant plant located at Ranjitnagar, Survey no 16/3, 26 and 27, Village Ranjitnagar, Taluka Ghoghamba, District Panchmahals

5. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business and the provisions for depreciation and all known liabilities are adequate and not in excess of the amounts reasonably necessary.

6. In respect of unclaimed dividends, the actual amount to be transferred to the Investor Education and Protection Fund shall be determined on the due date.

i. Above information is furnished in respect of the products of the Company which are primarily meant for sale.

ii. Vide notification No SO 477(E) dated 25th July, 1991, issued by the Ministry of Industry, the Companys products are exempted from licensing provisions under the Industries (Development and Regulation) Act, 1951.

iii. Installed capacities are as certified by the management on which the Auditors have relied, being a technical matter.

iv. Production is net of filling and other losses.

7. The Company had commenced arbitration proceedings against Gujarat Gas Company Limited (GGCL), for purported termination of the Gas Supply Agreement, and purported increase in price of gas supplied, from US $ 4.60 per MMBTU (plus applicable taxes thereon) to US $ 24.62 per MMBTU (plus applicable taxes thereon), for supplies made from April, 2008 till December, 2008 and had also approached the Delhi High Court for interim protection. These proceedings have been settled out of Court with GGCL on 17th December, 2009, and it has been agreed that the amounts paid by GFL to GGCL pursuant to the interim orders of the Honorable High Court of Delhi, at US $ 10 per MMBTU (plus applicable taxes thereon), shall be the final agreed price for supplies made during 1st April, 2008 and 31st December, 2008. Since this gas supply was accounted earlier at a price of @ US $ 4.62 per MMBTU (plus applicable taxes thereon), the difference @ US $ 5.38 per MMBTU (plus applicable taxes thereon), amounting to Rs 2886 Lacs, is charged to books of accounts in the Power & Fuel expenses in this year on settlement during the year.

8. Estimated amount of contract remaining to be executed on capital account and not provided for, net of advances - Rs. 10067.58 Lacs (previous year Rs. 2622.12 Lacs)

[B] information about Secondary (Geographical) Segment:

The Company derives revenue from both domestic and overseas markets, which are considered different geographical segments. Segment-wise revenues are as under:

[C] Notes:

1) The Company operates in following business segments:

a. Chemicals - Comprising of Refrigerant gases. Anhydrous Hydrochloric acid, Caustic-Chlorine, Chloromethane, PTFE, PT-PTFE and revenue from Carbon Credits.

b. Power - Comprising of Power Generation.

2) Inter-segment revenue comprise of power generated by Captive Power Generation Units and consumed in Chemical Business and is priced at estimated market value.

3) Chemicals business is operated in two geographical markets, in domestic and overseas market. In respect of power segment, the entire production is indigenously sold/consumed. The disclosures regarding geographical segments are made accordingly.

4) The above segment information includes the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

9. Joint Venture:

During the year ended 31st March 2008, the Company had entered into an agreement for formation of Joint Venture Company ("JVC") viz., Xuancheng HengYuan Chemical Technology Co. Ltd in the Peoples Republic of China. Up to 31st March, 2010, the Company had paid an amount of Rs. 1263.89 lacs (previous year Rs 1151.34 lacs), equivalent to US $3.12 millions (previous year US $ 2.93 millions) as share application money towards investment in the JVC. During the current year, the Company is informed that 33.77% of the equity capital in the JVC has been allotted to the Company (including 31.71% of the equity capital allotted in earlier year).

The JVC is engaged in the business of manufacture of anhydrous hydrogen fluoride and allied activities.

a) The financial year of the JVC is January to December. The Companys share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st December 2009, are as under:

b) The Companys share of capital commitments in the JVC as at 31st December, 2009 is Rs. Nil.

c) The Companys share of contingent liability of the JVC as at 31st December, 2009 is Rs. Nil.

d) The Companys transactions with JVC, being a related party, are disclosed in note no.26.

10. Related Party Disclosures :

(i) Names of Related Parties

(A) Where control exists:

Holding Company:

Inox Leasing & Finance Limited (w.e.f. 18* September 2008-see note (a)) Subsidiary Companies:

Inox Leisure Limited

Inox Infrastructure Private Limited

Inox Motion Pictures Limited

Inox Wind Limited (Incorporated on 09* April 2009)

Gujarat Fluorochemicals Americas LLC (GFL Americas LLC)

(Incorporated on 08th September 2009)

(B) Other related parties with whom there are transactions during the year: Joint Venture

Xuancheng HengYuan Chemical Technology Co. Ltd (XHCT Co. Ltd) Key Management Personnel

Shri V K Jain (Managing Director)

Shri D K Sachdeva (Whole Time Director)

Shri J S Bedi (Whole Time Director) Relatives of Key Management Personnel

Shri D K Jain (Father of Shri V K Jain)

Shri P K Jain (Brother of Shri V K Jain)

Shri Devansh Jain (Son of Shri V.K. Jain) Enterprises over which Key Management Personnel, or his relative, has significant influence

Devansh Gases Private Limited

Devansh Trading and Finance Private Limited

Inox India Limited

Inox Air Products Limited

Inox Leasing & Finance Limited- ( up to 17,h September, 2008- see note(a))

Inox Chemicals Private Limited

Refron Valves Limited

Rajni Farms Private Limited

Sidhapavan Trading and Finance Private Limited

Siddho Mai Investments Private Limited

11. Legal & Professional fees includes Rs 8.39 lacs (Previous years Rs 33.92 lacs ) paid to firms in which one of the director is partner.

12. Empioyee Benefits:

a) Defined Contribution Plans: Contribution to Provident Fund of Rs.162.22 lacs (Previous Year Rs138.63 lacs) is recognized as an expense and included in Contribution to Provident & Other Funds in the Profit and Loss Account.

b) Defined Benefit Plans: The amounts recognized in respect of Gratuity and Leave Encashment - as per Actuarial valuation as on 31st March 2010

The above defined benefit plans are unfunded. The estimate of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

(v) General description of significant Leasing arrangements -

Assets given on operating lease are Office Premises. The non-cancellable initial lease tenure is for five to nine years, which can be further extended at the mutual option of both the parties.

B) In respect of assets taken on operating lease:

The lease is for an initial non-cancellable period of ten years, which can be further extended at the mutual option of both parties. The lease rentals are included in Lease Rentals and Hire Charges in Schedule 12 to the Profit and Loss account. The future minimum lease payments under this lease arrangement are as under:-

a) The Companys other significant leasing arrangements are in respect of operating leases for premises (offices and residential accommodations) taken on lease. Generally, these lease arrangements are non-cancellable, range between 11 months to 5 years and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals are charged as "Rent" in Schedule 12 to the Profit and Loss Account.

13. Statement Pursuant to Part IV of Schedule VI to the Companies Act, 1956, is enclosed vide Annexure.

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