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Notes to Accounts of Navin Fluorine International Ltd.

Mar 31, 2016

In respect of gratuity (funded):

(a) The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancelable in nature and range between 11 months to 48 months. These leave and license agreements are generally renewable or cancelable at the option of the Company or the lessor. The lease payment recognised in the Statement of Profit and Loss is Rs, 374.70 lacs (as at 31st March, 2015, Rs, 323.87 lacs).

(a) The Company''s Employee Stock Option Scheme has been approved by the Board of Directors of the Company on 1st May, 2007.

(b) The vesting period of the options granted on 20th July, 2007 is over four years commencing after one year from the date of grant. The options granted on 28th April, 2014 and 29th June, 2015 shall vest upon the expiry of two years from the date of their grant.

(c) Exercise period would commence one year from the date of vesting and will expire on completion of ten years from the date of vesting.

(d) The options will be settled in equity shares of the Company.

(e) The Company used the intrinsic value method to account for ESOPs.

(f) The exercise prices have been determined to be the market price on the days preceding the dates of respective grants.

(g) Consequently, no compensation cost has been recognized by the Company in accordance with the "Guidance Note on Accounting for Employee Share-based payments" issued by The Institute of Chartered Accountants of India.

NOTE 1.

The Company received Rs, 260.07 lacs (as at 31st March, 2015, Rs, 337.15 lacs) during the year from its wholly owned subsidiary Sulakshana Securities Limited (SSL), towards partial repayment of interest free advances provided in earlier years. The market value of the assets of SSL far exceeds the outstanding advance to SSL of Rs, 2,010.00 lacs (as at 31st March, 2015, Rs, 2,200.00 lacs) at the year end.

NOTE 2.

Mafatlal Industries Limited was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer''s bankers have asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the sanctioned scheme of Mafatlal Industries Limited, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer.

NOTE 3. MICRO, SMALL AND MEDIUM SCALE BUSINESS ENTITIES

A sum of Rs, 481.37 lacs is payable to Micro and Small Enterprises as at 31st March, 2016 (as at 31st March, 2015, Rs, 281.04 lacs). There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

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

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

(d) The Company''s transactions with JVC, being a related party, are disclosed in note no. 45.

(2) The Company has a Joint venture interest of 49% in Convergence Chemicals Private Limited., a company incorporated under the Companies Act, 2013 on 19th November, 2014. As on 31st March, 2016 the Company has invested a sum of Rs, 3,430.49 lacs (as at 31st March, 2015, Rs, 2,940.49 lacs) in the share capital of this Joint venture.

The JVC is engaged in the business of manufacture of specialty chemicals in the healthcare sector.

(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, 2016 are as under:

(1) The Company has a Joint venture interest of 49.43% in Swarnim Gujarat Flourspar Private Limited., a company incorporated under the Companies Act, 1956 on 19th June, 2012. As on 31st March, 2016 the Company has invested a sum of Rs, 108.25 lacs (as at 31st March, 2015, Rs, 108.25 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, 2016 are as under:

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, during the previous year, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on 1st April, 2014, and has adjusted an amount of Rs, 166.26 lacs (net of deferred tax of Rs, 33.29 lacs) against the opening surplus balance in the Statement of Profit and loss under Reserves and surplus.

The depreciation expense in the Statement of Profit and loss for the previous year is lower by Rs, 205.21 lacs consequent to the change in the useful life of the assets.

NOTE 4. RELATED PARTY TRANSACTIONS

Enterprises over which key management personnel and their relatives are able to exercise significant influence

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Joint Ventures

Swarnim Gujarat Fluorspar Private Limited Convergence Chemicals Private Limited

Names of related parties where control exists

Sulakshana Securities Limited – subsidiary company

Urvija Associates – a partnership firm where the Company is a majority partner

Manchester Organics Limited – subsidiary company

Navin Fluorine (Shanghai) Co. Limited - subsidiary company

NFIL (UK) Limited - subsidiary company

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual / trustee) Shri Vishad P. Mafatlal (in the capacity of an individual / karta) Shri Atul K. Srivastava (upto 30th April, 2015) Shri Shekhar S. Khanolkar


Mar 31, 2015

Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

During the year ended 31 March, 2015, the amount of dividend, per share, recognized as distributions to equity shareholders is Rs. 16/- (year ended 31 March, 2014, Rs. 16/-)

Note 1 corporate information

Navin Fluorine International Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the Bombay, Ahmedabad and National stock exchanges. The Company belongs to the reputed Arvind Mafatlal Group in India. Established in 1967, it has the largest integrated fluorochemicals complex in India. The Company primarily focuses on fluorine chemistry, producing refrigeration gases, some basic building block fluorides and specialty organofluorines. Its manufacturing facilities are located at Surat, Gujarat and Dewas, Madhya Pradesh.

NOTE 2 EMPLOYEE BENEFITS

Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs. 459.81 lacs (previous year, Rs. 376.24 lacs).

Contributions are made to a Recognized Gratuity Fund in respect of gratuity and provision is made for compensated absences based upon actuarial valuation done at the end of every financial year using ''Projected Unit Credit'' method and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and loss.

The charge on account of provision for gratuity and compensated absences has been included in ''Contribution to provident fund and other funds'' and ''Salaries, wages and bonus'' respectively.

NOTE 3 EMPLOYEE STOCk OPTION SCHEME

a. The Company''s Employee Stock Option Scheme has been approved by the Board of Directors of the Company on 1 May, 2007.

b. The vesting period of the options granted on 20 July, 2007 is over four years commencing after one year from the date of grant. The options granted on 28 April, 2014 shall vest upon the expiry of two years from the date of their grant.

c. Exercise period would commence one year from the date of vesting and will expire on completion of ten years from the date of vesting.

d. The options will be settled in equity shares of the Company.

e. The Company used the intrinsic value method to account for ESOPs.

f. The exercise prices have been determined to be the market price on the days preceding the dates of respective grants.

g. Consequently, no compensation cost has been recognized by the Company in accordance with the "Guidance Note on Accounting for Employee Share-based payments" issued by The Institute of Chartered Accountants of India.

i. Had fair value method been used, the compensation cost would have been higher by Rs. 45.26 (previous year Rs. nil), Profit after tax would have been lower by Rs. 32.83 (previous year Rs. nil) and EPS - both basic and diluted - would have been Rs. 50.23 & Rs. 50.01 per share respectively (previous year Rs. 51.90 per share).

j. Weighted Average exercise price of the above options is Rs. 389/- per share.

NOTE 4 LEASE

(a) The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancellable in nature and range between 11 months to 48 months. These leave and license agreements are generally renewable or cancellable at the option of the Company or the lessor. The lease payment recognised in the Profit and loss account is Rs. 323.87 lacs (previous year Rs. 265.59 lacs).

NOTE 5

With the redemption of Preference shares of Rs. 3,000.00 lacs by Mafatlal Industries Limited (MIL) during the previous year, all financial assistances provided to MIL for their expeditious rehabilitation stands repaid as on 31 March, 2014.

The Company received Rs. 337.16 lacs (previous year Rs. 394.97 lacs) during the year from its wholly owned subsidiary Sulakshana Securities Limited (SSL), towards partial repayment of interest free advances provided in earlier years. A provision for doubtful advances made in this context in earlier years of Rs. 380.37 lacs was written back in the previous year. The market value of the assets of SSL far exceeds the outstanding advance to SSL of Rs. 2,200.00 lacs (previous year Rs. 2,419.60 lacs) at the year end.

A corporate guarantee given to a lender of MIL expired during the previous year. Consequently the contingency reserve of Rs. 1,000.00 lacs created in this regard was also transferred to general reserve of the Company in the previous year, as it was no longer required.

NOTE 6

MIL was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer''s bankers have asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the SS of MIL, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer.

NOTE 7 CONTINGENT LIABILITIES

(Rs. in lacs) As at 31 As at 31 March, 2015 March, 2014 In respect of:

a. Excise matters disputed in appeal

These relate to MODVAT on capital purchases (pending before the 127.52 127.52 Assistant Commissioner) and permit fee on purchase of alcohol (pending before the High Court)

b. Claims against the Company not acknowledged as debts Labour matters involving issues like regularization of employment, 19.64 17.64 termination of employment, compensation against severance, etc.

c. Sales-tax matters disputed in appeal

These relate to classification of goods and consequent dispute on 136.68 200.50 the rates of sales-tax (pending at various stages from Assistant Commissioner to High Court)

d. Income tax matters disputed in appeal 721.02 721.02

In all the above matters, the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.

NOTE 8 JOINT VENTURE COMPANIES (JVC)

1. The Company has a Joint venture interest of 49.43 % in Swarnim Gujarat Flourspar Private Limited., a Company incorporated under the Companies Act, 1956 on 19 June, 2012. As on 31 March, 2015 the Company has invested a sum of Rs. 107.00 lacs (previous year 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 capital commitments in the JVC as at 31 March, 2015 is Rs. Nil.

b) The Company''s share of contingent liability of the JVC as at 31 March, 2015 is Rs. Nil.

c) The Company''s transactions with JVC, being a related party, are disclosed in note no. 45.

2. The Company has a Joint venture interest of 49% in Convergence Chemicals Private Limited., a Company incorporated under the Companies Act, 2013 on 19 November, 2014. As on 31 March, 2015 the Company has invested a sum of Rs. 2,940.49 lacs (previous year Rs. nil) in the share capital of this Joint venture.

The JVC is engaged in the business of manufacture of specialty chemicals in the healthcare sector.

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 31 March, 2015 are as under:

NOTE 9 RELATED PARTY TRANSACTIONS

Enterprises over which key management personnel and their relatives are able to exercise significant influence

Mafatlal Industries Limited Mafatlal Fabrics Private Limited NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust Sri Sadguru Seva Sangh Trust

Joint Ventures

Swarnim Gujarat Fluorspar Private Limited Convergence Chemicals Private Limited

NOTE 9 RELATED PARTY TRANSACTIONS (Contd.)

Names of related parties where control exists

Sulakshana Securities Limited - subsidiary company Manchester Organics Limited - subsidiary company Urvija Associates - a partnership firm where the Company is a majority partner

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual / trustee)

Shri Vishad P. Mafatlal (in the capacity of an individual / karta)

Shri Atul K. Srivastava Shri Shekhar S. Khanolkar


Mar 31, 2014

NOTE 1. EMPLOYEE BENEFITS

Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs 376.24 lacs (previous year, Rs 338.72 lacs).

Contributions are made to a Recognized Gratuity Fund in respect of gratuity and provision is made for compensated absences based upon actuarial valuation done at the end of every financial year using ''Projected Unit Credit'' method and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

The charge on account of provision for gratuity and compensated absences has been included in ''Contribution to provident fund and other funds'' and ''Salaries, wages and bonus'' respectively.

NOTE 2. Employee STOCK OPTION SCHEME

a. The Company''s Employee Stock Option Scheme has been approved by the Board of Directors of the Company on 1 May, 2007.

b. The vesting period is over four years from the date of grant, commencing after one year from the date of grant.

c. Exercise Period would commence one year from date of grant and will expire on completion of ten years from the date of vesting.

d. The options will be settled in equity shares of the Company.

e. The Company used the intrinsic value method to account for ESOPs.

f. The exercise price has been determined to be the market price on the days preceding the dates of grants.

g. Consequently, no compensation cost has been recognized by the Company in accordance with the "Guidance Note on Accounting for Employee Share-based payments" issued by The Institute of Chartered Accountants of India.

i. Had fair value method been used, the compensation cost would have been higher by Rs nil (previous year Rs nil), Profit after tax would have been lower by Rs nil (previous year Rs nil) and EPS – both basic and diluted - would have been Rs 51.90 per share (previous year Rs 44.22 per share).

j. Weighted Average exercise price of the above options is Rs 381/- per share.

NOTE 3. LEASE

(a) The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancellable in nature and range between 11 months to 48 months. These leave and license agreements are generally renewable or cancellable at the option of the Company or the lesser. The lease payment recognised in the Profit and Loss account is Rs 265.59 lacs (previous year Rs 210.83 lacs).

With the redemption of Preference shares of Rs 3,000.00 lacs by Mafatlal Industries Limited (MIL) during the year, all financial assistances provided to MIL for their expeditious rehabilitation stands repaid as on 31 March 2014.

The Company received Rs 394.97 lacs during the year from its wholly owned subsidiary Sulakshana Securities Limited (SSL), towards partial repayment of interest free advances provided in earlier years. Consequently, a provision for doubtful advances made in this context in earlier years of Rs 380.37 lacs is also written back. The market value of the assets of SSL far exceeds the outstanding advance to SSL of Rs 2,419.60 lacs (previous year Rs 2,814.57 lacs) at the year end.

A corporate guarantee given to a lender of MIL expired during the year. Consequently the contingency reserve of Rs 1,000.00 lacs created in this regard now stands transferred to general reserve of the Company, as it is no longer required.

NOTE 4.

MIL was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer''s bankers have asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the SS of MIL, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer.

NOTE 5. CONTINGENT LIABILITIES

In respect of: As at 31March, 2014 As at 31 March, 2013

a. Excise matters disputed in appeal 127.52 158.20 These relate to MODVAT on capital purchases (pending before the Assistant Commissioner) and permit fee on purchase of alcohol (pending before the High Court)

b. Claims against the Company not acknowledged as debts 17.64 22.65 Labour matters involving issues like regularization of employment, termination of employment, compensation against severance, etc.

c. Sales-tax matters disputed in appeal 200.50 199.49 These relate to classification of goods and consequent dispute on the rates of sales-tax (pending at various stages from Assistant Commissioner to High Court)

d. Income tax matters disputed in appeal 721.02 805.61

In all the above matters, the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.

NOTE 6. DERIVATIVE INSTRUMENTS

a. The Company enters into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter party to such forward contracts is a bank. These contracts are entered into to hedge the foreign currency risks on Out standings. Details of forward contracts outstanding as at the year end:

b) The Company''s share of capital commitments in the JVC as at 31 March, 2014 is Rs Nil.

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

d) The Company''s transactions with JVC, being a related party, are disclosed in note no. 44.

NOTE 7.

With effect from 1 April, 2012 Mafatlal Denim Limited (MDL) has been amalgamated with MIL under the composite scheme of arrangement and amalgamation of MDL and Mishapar Investments Ltd. with MIL. Consents of the Honorable High Courts of Bombay and Gujarat for the scheme were received and fled with the Registrar of Companies (ROC) during the year. On the amalgamation becoming effective during the year, NFIL received shares of MIL in lieu of the MDL shares of the same value.

NOTE 8. RELATED PARTY TRANSACTIONS

Enterprises over which key management personnel and their relatives are able to exercise significant influence

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Joint Venture

Swarnim Gujarat Fluorspar Private Limited

Names of related parties where control exists

Sulakshana Securities Limited – subsidiary company

Manchester Organics Limited– subsidiary company

Urvija Associates – a partnership frm where the Company is a majority partner

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual / trustee)

Shri Vishad P. Mafatlal (in the capacity of an individual / karta)

Shri Atul K. Srivastava

Shri Shekhar S. Khanolkar

NOTE 9.

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

CORPORATE INFORMATION

Navin Fluorine International Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the Bombay, Ahmedabad and National stock exchanges. The Company belongs to the reputed Arvind Mafatlal Group in India. Established in 1967, it has the largest integrated fluorochemicals complex in India. The Company primarily focuses on fluorine chemistry, producing refrigeration gases, some basic building block fluorides and specialty organofluorines. Its manufacturing facilities are located at Surat, Gujarat and Dewas, Madhya Pradesh.

a. Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March, 2013, the amount of dividend, per share, recognized as distributions to equity shareholders is Rs. 15/- (year ended 31 March, 2012, Rs. 75/-)

Pursuant to the decision of the Board of Directors of the Company taken in its meeting dated 24 September, 2010, the Company bought back 338,792 equity shares of nominal value of Rs. 10/- each at a price of Rs. 400/- per share for an aggregate value of Rs. 1,355.17 lacs during 2010-11 under Section 77A of the Companies Act, 1956 through tender offer by utilising the Share premium account to the extent of Rs. 1,321.29 lacs. The Capital redemption reserve was created out of General reserve for Rs. 33.88 lacs being the nominal value of shares thus bought back. All the equity shares bought back were extinguished by 5 March, 2011.

NOTE 1 EARNINGS PER SHARE (EPS)

Earnings per share is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year, as under:

NOTE 2 EMPLOYEE BENEFITS

Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs. 338.72 lacs (previous year, Rs. 288.15 lacs).

Contributions are made to a Recognized Gratuity Fund in respect of gratuity and provision is made for compensated absences based upon actuarial valuation done at the end of every financial year using ''Projected Unit Credit'' method and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

NOTE 3 EMPLOYEE STOCK OPTION SCHEME

a. The Company''s Employee Stock Option Scheme has been approved by the Board of Directors of the Company on 1 May, 2007.

b. The vesting period is over four years from the date of grant, commencing after one year from the date of grant.

c. Exercise Period would commence one year from date of grant and will expire on completion of ten years from the date of vesting.

d. The options will be settled in equity shares of the Company.

e. The Company used the intrinsic value method to account for ESOPs.

f. The exercise price has been determined to be the market price on the days preceding the dates of grants.

g. Consequently, no compensation cost has been recognized by the Company in accordance with the "Guidance Note on Accounting for Employee Share-based payments” issued by The Institute of Chartered Accountants of India.

i. Had fair value method been used, the compensation cost would have been higher by Rs. nil (previous year Rs. 6.73 lacs), Profit after tax would have been lower by Rs. nil (previous year Rs. 5.07 lacs) and EPS – both basic and diluted - would have been Rs. 44.22 per share (previous year Rs. 236.84 per share).

j. Weighted Average exercise price of the above options is Rs. 381/- per share.

NOTE 4 LEASES

(a) The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancelable in nature and range between 11 months to 48 months. These leave and license agreements are generally renewable or cancelable at the option of the Company or the lessor. The lease payment recognised in the Statement of Profit and Loss account is Rs. 210.83 lacs (previous year Rs. 239.02 lacs).

NOTES

The Company, in terms of the BIFR sanctioned Scheme of Mafatlal Industries Limited (MIL), made substantial investments in MIL and it had also extended certain financial assistance to facilitate their expeditious rehabilitation. With the residual investment of Rs. 3,000.00 lacs in preference shares (due for redemption 2013 - 2016), being redeemed subsequent to the year end, the values of all other investments including financial assistance have since been redeemed by MIL. In specific terms:

(i) The Company has received the redemption proceeds of its investment in preference share much before the due date.

(ii) The Company, during the previous year, has received amounts aggregating to Rs. 6,187.32 lacs including interest towards the repayment of monies advanced to MIL and a group company for takeover of loan liabilities of MIL.

(iii) The Company advanced interest free monies to its wholly owned subsidiary Sulakshana Securities Limited (SSL) which, at the year end, stands at Rs. 2,814.57 lacs (previous year Rs. 2,806.57 lacs). However, the market value of the assets remaining in SSL, after repayment of all the liabilities taken over by SSL from MIL, far exceeds the value owed by SSL.

(iv) The Company has given a corporate guarantee and created a contingency reserve of Rs. 1000.00 lacs at the behest of a lender to MIL. However, the Company expects to write back this contingency reserve after the expiry of the guarantee period expiring in 2013-14 as the relevant asset value in connection with which the guarantee was given, far exceeds the value guaranteed.

NOTE 5

MIL was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer''s bankers have asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the SS of MIL, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer.

NOTE 6 DERIVATIVE INSTRUMENTS

a. The Company enters into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter party to such forward contracts is a bank. These contracts are entered into to hedge the foreign currency risks on firm commitments. Details of forward contracts outstanding as at the year end:

b. Net exchange difference in respect of forward contracts to be credited - debited in subsequent accounting year amounts to debit Rs. 55.56 lacs (as at 31 March, 2012, Rs. 25.46 lacs).

NOTE 7

The Company has not made any remittances in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances in foreign currencies on account of dividends have been made by or on behalf of non-resident shareholders. The particulars of dividends paid to non-resident shareholders are as follows:

NOTE 8

The financial statements of Swarnim Gujarat Fluorspar Private Limited, a Joint Venture were not available as the company has been newly set-up and operations are yet to commence. Hence, the disclosures under AS 27 have not been done.

NOTES 9

Denim Limited (MDL), an associate, is in the process of being amalgamated with MIL, the effective date being 1 April, 2012 as per the composite scheme of arrangement and amalgamation of MDL and Mishapar Investments Ltd. with MIL. Consent of the Honorable High Courts of Gujarat and Bombay for the scheme was received on 8 April, 2013 and 26 April, 2013 respectively and will be filed with the ROC shortly. On the amalgamation becoming effective, the Company will receive shares of MIL in lieu of the MDL shares of the same value.

NOTE 10 RELATED PARTY TRANSACTIONS

Enterprises over which key management personnel and their relatives are able to exercise significant influence

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Associate

Mafatlal Denim Limited (Refer note 43)

Joint Venture

Swarnim Gujarat Fluorspar Private Limited (w.e.f. 19 June, 2012)

Names of related parties where control exists

Sulakshana Securities Limited - subsidiary company Manchester Organics Limited - subsidiary company Urvija Associates - a partnership firm where the Company is a majority partner

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual / trustee) Shri Vishad P. Mafatlal (in the capacity of an individual / karta) Shri Atul K. Srivastava Shri Shekhar S. Khanolkar

1. Enterprises over which key management personnel and their relatives are able to exercise significant influence

2. Associate

3. Joint Venture

4. Related parties where control exists

5. Key management personnel

Notes,

1. There are no amounts written off or written back during the year in respect of debts due from or to related parties. In an earlier year, provision for doubtful advance of Rs. 380.37 lacs was made for Sulakshana Securities Limited.

2. Figures in italics are those as at and for the year ended 31 March, 2012

NOTE 11

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

01. CORPORATE INFORMATION

Navin Fluorine International Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the Bombay, Ahmadabad and National stock exchanges. The Company belongs to the reputed industrial house of Arvind Mafatlal Group in India. Established in 1967, it has the largest integrated fluorochemicals complex in India. The Company primarily focuses on fluorine chemistry, producing refrigeration gases, some basic building block fluorides and specialty organofluorines. Its manufacturing facilities are located at Surat, Gujarat and Dewas, Madhya Pradesh.

Notes 03 SHARE CAPITAL

Pursuant to the decision of the Board of Directors of the Company taken in its meeting dated 24th September, 2010, the Company bought back 338,792 equity shares of nominal value of Rs. 10/- each at a price of Rs. 400/- per share for an aggregate value of Rs. 1,355.17 lacs during the previous year under Section 77A of the Companies Act, 1956 through tender offer by utilising the Securities premium account to the extent of Rs. 1,321.29 lacs. The Capital redemption reserve was created out of General reserve for Rs. 33.88 lacs being the nominal value of shares thus bought back. All the equity shares bought back were extinguished by 5th March, 2011.

Notes]3-EMPLOYEE BENEFITS:

Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee's salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs.288.15 lacs (previous year, Rs. 227.01 lacs).

Contributions are made to a Recognized Gratuity Fund in respect of gratuity and provision is made for compensated absences based upon actuarial valuation done at the end of every financial year using 'Projected Unit Credit' method and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

The charge on account of provision for gratuity and leave encashment has been included in 'Contribution to provident fund and other funds' and 'Salaries, wages and bonus' respectively.

Notes]31[EMPLOYEE STOCK OPTION SCHEME:

a. The Company's Employee Stock Option Scheme has been approved by the Board of Directors of the Company on 1st May 2007.

b. The vesting period is over four years from the date of grant, commencing after one year from the date of grant.

c. Exercise Period would commence one year from date of grant and will expire on completion of ten years from the date of vesting.

d. The options will be settled in equity shares of the Company.

e. The Company used the intrinsic value method to account for ESOPs.

f. The exercise price has been determined to be the market price on the days preceding the dates of grants.

g Consequently, no compensation cost has been recognized by the Company in accordance with the "Guidance Note on Accounting for Employee Share-based payments" issued by The Institute of Chartered Accountants of India.

i. Had fair value method been used, the compensation cost would have been higher by Rs. 6.73 lacs (previous year Rs 17.33 lacs), Profit after tax would have been lower by Rs. 5.07 lacs (previous year Rs. 11.41 lacs) and EPS - both basic and diluted - would have been Rs. 236.84 per share (previous year Rs. 70.99 per share). j. Weighted Average exercise price of the above options is Rs. 381/- per share.

Notes LEASES

(a) The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancelable in nature and range between 11 months to 48 months. These leave and license agreements are generally renewable or cancelable at the option of the Company or the lessor. The lease payment recognized in the profit and loss account is Rs. 239.02 lacs (previous year Rs. 210.83 lacs).

(b) The Company has taken office premise under lease rental agreement. Details of minimum lease payments for non-cancellable lease are as under:

The Company, in terms of the BIFR sanctioned Scheme of Mafatlal Industries Ltd. (MIL), made substantial investments in MIL and it had also extended certain financial assistance to facilitate their expeditious rehabilitation. Barring the balance investment of Rs 3,000.00 lacs in preference shares (due for redemption 2013 - 2016), the values of all other investments including financial assistance have since been redeemed by MIL. The residual value of preference shares is also expected to be redeemed shortly, much ahead of the due dates. In specific terms:

(i) The Company, pursuant to the BIFR scheme of MIL, made investment of Rs.6,000.00 lacs in the preference shares of MIL and simultaneously made a provision of Rs. 5,940.00 lacs towards diminution in the value of these investments as MIL was a sick company. This provision of Rs.5,940.00 lacs has now been written back as a consequence of MIL deregistering itself from BIFR and its net worth turning substantially positive. The Company has also received Rs. 3,000.00 lacs from MIL during the year towards the redemption proceeds of 50% of its investment in preference shares much before the redemption date.

(ii) The Company, during the year, has received amounts aggregating to Rs. 6,187.32 lacs including interest towards the repayment of monies advanced to MIL and a group company for takeover of loan liabilities of MIL.

(iii) The Company advanced interest free monies to its wholly owned subsidiary Sulakshana Securities Ltd (SSL) which, at the year end, stands at Rs. 2,806.57 lacs (previous year Rs. 2,799.07 lacs). However, the market value of the assets remaining in SSL, after repayment of all the liabilities taken over by SSL from MIL, far exceeds the value owed by SSL.

(iv) The Company has given a corporate guarantee and created a contingency reserve of Rs.1000.00 lacs at the behest of a lender to MIL. However, the Company expects to write back this contingency reserve after the expiry of the guarantee period as the relevant asset value in connection with which the guarantee was given, far exceeds the value guaranteed.

Notes] 35

MIL was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer's bankers have asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the SS of MIL, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer.

Notes]3 CONTINGENT LIABILITIES

(Rupees in lacs

As at As at

31st March, 2012 31st March, 2011

In respect of:

a. Excise matters disputed in appeal

These relate to MODVAT on capital purchases (pending before the Assistant 158.20 158.42

Commissioner) and permit fee on purchase of alcohol (pending before the High Court)

b. Claims against the Company not acknowledged as debts

Labour matters involving issues like regularization of employment, termination of 22.65 22.34 employment, compensation against severance, etc.

c. Sales-tax matters disputed in appeal

These relate to classification of goods and consequent dispute on the rates of 201.96 209.42

sales-tax (pending at various stages from Assistant Commissioner to High Court)

d. Income tax matters disputed in appeal in all the 629.17 629.17 above matters, the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.

Notes]3 DERIVATIVE INSTRUMENTS

a. The Company enters into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter party to such forward contracts is a bank. These contracts are entered into to hedge the foreign currency risks on firm commitments. Details of forward contracts outstanding as at the year end:

Notes]4 RELATED PARTY TRANSACTIONS

Names of related parties where control exists

Sulakshana Securities Limited - subsidiary company

Manchester Organics Limited - subsidiary company (w.e.f. 04.05.2011)

Urvija Associates - a partnership firm where the Company is a majority partner

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual/ trustee)

Shri Vishad P. Mafatlal (in the capacity of an individual/ karta)

Shri Atul K. Srivastava

Shri Satish D. Kakade (upto 31.12.2010)

Shri Shekhar S. Khanolkar

Associate

Mafatlal Denim Limited

Enterprises over which key management personnel and their relatives are able to exercise significant influence

Mafatlal Industries Limited Mafatlal Fabrics Private Limited NOCIL Limited

Sunland Industrial Machinery Limited Seth Navinchandra Mafatlal Foundation Trust

1. Enterprises over which key management personnel and their relatives are able to exercise significant influence

2. Associate

3. Related parties where control exists

4. Key management personnel Notes

1. There are no amounts written off or written back during the year in respect of debts due from or to related parties. In an earlier year, provision for doubtful advance of Rs. 380.37 lacs was made for Sulakshana Securities Limited.

2. Figures in italics are those as at and for the year ended 31st March, 2011


Mar 31, 2010

(Rupees in lacs) As at As at 31 st March, 2010 31st March, 2009

1. Contingent liabilities in respect of:

a. Claims against the Company not acknowledged as debts

These relate to MODVAT on capital purchases (pending before the Assistant Commissioner) and permit fee on purchase of alcohol (pending before the High Court) 91.48 91.93

b. Sales-tax matters disputed in appeal Labour matters involving issues like regularization of employment, termination of employment, compensation against severance, etc. 23.34 23.34

Disputed bills of vendors not accounted for -- 8.84

c. Sales-tax matters disputed in appeal These relate to classification of goods and consequent dispute on the rates of sales-tax (pending at various stages from Assistant Commissioner to High Court) 207.14 174.13

d. Income tax matters disputed in appeal 606.81 371.72

In all the above matters, the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize.

e. Corporate guarantee given for settlement of Mafatlal Industries 1,000.00 1,000.00 Limited (MIL) dues (refer note 3.b.ii of schedule 1 7)

2. a. The Board for Industrial & Financial Reconstruction (BIFR) declared Mafatlal Industries Limited (MIL) a sick industrial undertaking and sanctioned a scheme for its rehabilitation (SS). Pursuant to this:

(i) the Chemical Division of MIL was demerged and vested in the Company with effect from the appointed date (1 st March, 2002), as a going concern, and effect given to in the accounts in the relevant financial year;

(ii) Sulakshana Securities Limited (SSL), the wholly-owned subsidiary of the Company, took over certain identified assets and term loan liabilities of MIL with the objective of repaying them by disposing off the assets thus transferred.

b. In terms of the settlements reached by MIL/ SSL for the discharge of term loan liabilities of MIL, as referred to in 3(a)(ii) above:

(i) the Company advanced monies, from time to time, and issued debentures aggregating to Rs. 2,794.07 lacs (previous year Rs. 2,778.07 lacs) (interest free) at year end.

(ii) the Company gave a corporate guarantee of Rs. 1,000.00 lacs against which a Contingency reserve of Rs. 1,000.00 lacs has been created equitably over four years from 2005-2006 as required by the lenders.

c. SSL completed repayment of the term loan liabilities taken over from MIL in an earlier year. The settlement of monies advanced is dependent on the sale and realization of assets remaining with SSL as mentioned in 3(a)(ii) above.

3. The Company decided to assist MIL in its rehabilitation efforts in view of its substantial investment in MILs shares and has from time to time taken

a. Advanced monies to a group company aggregating to Rs. 2,412.48 lacs (previous year Rs. 2,230.13 lacs) including interest, at year end to enable settlement of loan liabilities of MIL.

b. Taken over loan liabilities of MIL of Rs. 6,534.12 lacs, at a value of Rs 3,015.99 lacs (previous year Rs. 2,865.61 lacs) (at year end).

The Modified Rehabilitation Scheme of MIL, which inter alia includes settlement of the loan liabilities at the acquisition cost, has been approved by the BIFR during the year after receiving the consent of the secured creditors. MIL presently is in the last leg of implementation of the Modified Rehabilitation Scheme. The settlement of the amounts in (a) and (b) above is dependent on the successful implementation of the modified rehabilitation scheme.

4. During the year, the Company has successfully bid through an open tender process, for a commercial property admeasuring 53,214 sq. ft. at Lower Parel, Mumbai. This investment will entail a cash outflow of Rs. 4,506 lacs. As per the terms of the bid document, necessary bank guarantee worth Rs. 4,377.10 lacs has been furnished.

5. Depreciation has been provided for on all fixed assets on straight-line basis in accordance with the provisions of the Companies Act, 1 956, at the rates and in the manner specified in schedule XIV of the Act. In respect of Speciality Chemicals, Cryolite, Aluminium Fluoride, Refrigerant Gases, ABF Plants, Fluoroaniline Plants, Research & Development Plant and Captive Power Plant depreciation has been provided for at the rate applicable to continuous process plants.

6. a. The company has taken office and residential premises under operating lease or leave and license agreements. These are generally cancelable in nature and range between 11 months to 36 months. These leave and license agreements are generally renewable or cancelable at the option of the Company or the lessor. The lease payment recognised in the profit and loss account is Rs. 77.29 lacs (previous year Rs 58.31 lacs).

7. MIL was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customers bankers have asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the SS of MIL, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer.

8. Research and development expenditure debited to the Profit and Loss account by charge to relevant heads of account amount to Rs. 270.90 lacs (previous year, Rs. 188.97 lacs).

9. The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 have not be provided.

10. Excise duty deducted from turnover represents excise duty collected on sale of goods. Excise duty shown under expenditure represents the aggregate of excise duty borne by the Company and difference between excise duty on opening and closing stocks of finished goods.

11. Segment information

Primary

Business1 is the primary segment of the Company, comprising of chemicals only.

12. Interest capitalized during the year, nil (previous year, Rs. 26.56 lacs)

13. Out of the rights issue made in 2004-05, 109 equity shares could not be offered on rights basis due to the non-availability of details of beneficia holders from depositories. The same are kept in abeyance.

14. The Company had made a rights issue of equity shares in an earlier year. The first and final call of Rs. 30/- per share (including premium of Rs. 25/-) was made during an earlier year. The proceeds have been used to part finance infusion of funds into MIL and for general corporate purposes. Unutilized monies as at the year end, Rs. 0.07 lacs (as at 31 st March, 2009, Rs. 1.62 lacs).

15. Employee benefits

Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employees salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs. 165.75 lacs (previous year, Rs. 135.47 lacs).

ASB Guidance on Implementing AS 15, Employee Benefits (revised 2005) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed, are to be considered as defined benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the companys actuary has expressed inability to reliably measure provident fund liabilities. Accordingly the company is unable to exhibit the related information.

Contributions are made to a Recognized Gratuity Fund in respect of gratuity and provision is made for leave encashment based upon actuaria valuation done at the end of every financial year using Projected Unit Credit method and it covers all regular employees. Major drivers in actuaria assumptions, typically, are years of service and employee compensation. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

The charge on account of provision for gratuity and leave encashment has been included in Contribution to provident fund and other funds and Salaries, wages and bonus respectively.

16. The company suspended its organic chemicals activities at Dewas in the previous year. Some of the assets of its Dewas unit are being transferred from Dewas and redeployed in other projects currently under implementation at Surat. The Dewas site is now being utilised to set up another state- of-the-art contract manufacturing facility. Accordingly, the company is of the view that it does not require any disclosure under AS 24 - Discontinuing Operations. Necessary provision for impairment wherever required has been made.

17. Employee Stock Option Scheme

a. The NFIL Employee Stock Option Scheme has been approved by the Board of Directors of the Company on 1 st May 2007.

b. The vesting period is over four years from the date of grant, commencing after one year from the date of grant.

c. Exercise Period would commence one year from date of grant and will expire on completion of ten years from the date of vesting.

d. The options will be settled in equity shares of the company.

e. The company used the intrinsic value method to account for ESOPs.

f. The exercise price has been determined to be the market price on the days preceding the dates of grants.

g. Consequently, no compensation cost has been recognized by the company in accordance with the "Guidance Note on Accounting for Employee Share-based payments" issued by the Institute of Chartered Accountants of India.

18. Related party transactions

Names of related parties where control exists

Sulakshana Securities Limited -wholly owned subsidiary company

Urvija Associates - a partnership firm where the Company is a majority partner

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual/ trustee) Shri Vishad P. Mafatlal (in the capacity of an individual/ karta) Shri Atul K. Srivastava Shri Satish D Kakade Shri Shekhar Khanolkar

Relatives of key management personnel

Shri Arvind N. Mafatlal (in the capacity of an individual/ karta/ trustee)

Smt. Sushilaben A. Mafatla

Smt. Rekha H. Mafatlal

Smt. Aarti Chaddha

Ms. Anjali H. Mafatlal

Mr. Priyavrata H. Mafatla

Ms. Padmaja Mafatla

Associate

Mafatlal Denim Limited

Enterprises over which key management personnel and their relatives are able to exercise significant influence

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

National Organic Chemical Industries Limited

Mafatlal Impex Private Limited

Vibhadeep Investments and Trading Limited

Sushripada Investments Private Limited

Shamir Texchem Private Limited

Marigold International Private Limited

Pamil Investments Private Limited

Navlekh Investments Limited

Milap Texchem Private Limited

Surekha Holdings Private Limited

Krishnadeep Housing Development Private Limited

Sunanda Industrial Machinery Limited

19. Previous year figures have been regrouped, wherever necessary, to correspond with those of the current year.

 
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