Notes to Accounts of GFL Ltd.

Mar 31, 2025

3.8 Provisions and contingencies

The Company recognizes provisions when a present
obligation (legal or constructive) as a result of a past event
exists and it is probable that an outflow of resources
embodying economic benefits will be required to settle
such obligation and the amount of such obligation can
be reliably estimated. Provisions are reviewed at each
balance sheet date and are adjusted to reflect the current
best estimate.

The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking into
account the risks and uncertainties surrounding the
obligation. If the effect of time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

of resources will be required to settle the obligation.
Contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses its
existence in the financial statements.

Contingent assets are not recognized in the financial
statements. However, it is disclosed only when an inflow of
economic benefits is probable.

3.9 Financial instruments

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instruments. Financial assets and financial
liabilities are measured at fair value on initial recognition,
except for trade receivables which are initially measured
at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in
profit or loss.

A] Financial assets

a) Initial recognition and measurement:

Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the instrument. On initial
recognition, a financial asset is recognised at
fair value, except for trade receivables which
are initially measured at transaction price. In
case of financial assets which are recognised
at fair value through profit and loss (FVTPL),
its transaction costs are recognised in the
statement of profit and loss. In other cases,
the transaction costs are attributed to the
acquisition value of the financial asset.

b) Effective interest method

part of the effective interest rate, transaction
costs and other premiums or discounts) through
the expected life of the debt instrument, or,
where appropriate, a shorter period, to the net
carrying amount on initial recognition.

Income is recognised on an effective interest
basis for debt instruments other than those
financial assets classified as at FVTPL. Interest
income is recognised in profit or loss and is
included in the âOther incomeâ line item.

c) Subsequent measurement:

For subsequent measurement, the Company
classifies a financial asset in accordance with
the below criteria:

i. The Companyâs business model for
managing the financial asset and

ii. The contractual cash flow characteristics
of the financial asset.

Based on the above criteria, the Company
classifies its financial assets into the following
categories:

i. Financial assets measured at amortized
cost:

A financial asset is measured at the
amortized cost if both the following
conditions are met:

a) The Companyâs business model
objective for managing the financial
asset is to hold financial assets in
order to collect contractual cash
flows, and

b) The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest on the
principal amount outstanding.

Such financial assets are subsequently
measured at amortized cost using the
effective interest method.

The amortized cost of a financial asset is
also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if
both of the following conditions are met:

a) The Companyâs business model
objective for managing the financial
asset is achieved both by collecting
contractual cash flows and selling
the financial assets, and

b) The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest on the
principal amount outstanding.

Investments in equity instruments,
classified under financial assets, are
initially measured at fair value. The
Company may, on initial recognition,
irrevocably elect to measure the same
either at FVTOCI or FVTPL. The Company
makes such election on an instrument-
by-instrument basis. Fair value changes
on an equity instrument are recognised
as other income in the Statement of Profit
and Loss unless the Company has elected
to measure such instrument at FVTOCI.

This category does not apply to any of the
financial assets of the Company.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL
unless it is measured at amortized
cost or at FVTOCI as explained above.
This is a residual category applied to
all other investments of the Company
excluding investments in subsidiaries
and associates. Such financial assets are
subsequently measured at fair value at
each reporting date. Fair value changes
are recognized in the Statement of Profit
and Loss.

d) Derecognition:

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is derecognized (i.e. removed
from the Companyâs Balance Sheet) when any
of the following occurs:

i. The contractual rights to cash flows from
the financial asset expires;

ii. The Company transfers its contractual
rights to receive cash flows of the financial
asset and has substantially transferred all
the risks and rewards of ownership of the
financial asset;

iii. The Company retains the contractual
rights to receive cash flows but assumes
a contractual obligation to pay the cash
flows without material delay to one or
more recipients under a âpass-throughâ
arrangement (thereby substantially
transferring all the risks and rewards of
ownership of the financial asset);

iv. The Company neither transfers nor
retains substantially all risk and rewards
of ownership and does not retain control
over the financial asset.

In cases where the Company has neither
transferred nor retained substantially all of
the risks and rewards of the financial asset,
but retains control of the financial asset, the
Company continues to recognize such financial
asset to the extent of its continuing involvement
in the financial asset. In that case, the Company
also recognizes an associated liability.

The financial asset and the associated liability
are measured on a basis that reflects the rights
and obligations that the Company has retained.

On derecognition of a financial asset, the
difference between the assetâs carrying amount
and the sum of the consideration received and
receivable and the cumulative gain or loss that
had been recognised in other comprehensive
income and accumulated in equity is recognised
in profit or loss if such gain or loss would have
otherwise been recognised in profit or loss on
disposal of that financial asset.

e) Impairment of financial assets

The Company applies expected credit losses
(ECL) model for measurement and recognition
of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized
cost (other than trade receivables)

In case of trade receivables, the Company
follows a simplified approach wherein an
amount equal to lifetime ECL is measured
and recognized as loss allowance.

In case of other assets measured at
amortized cost, the Company determines
if there has been a significant increase in
credit risk of the financial asset since initial
recognition. If the credit risk of such assets
has not increased significantly, an amount
equal to 12-month ECL is measured and
recognized as loss allowance. However, if
credit risk has increased significantly, an
amount equal to lifetime ECL is measured
and recognized as loss allowance.

Subsequently, if the credit quality of the
financial asset improves such that there is
no longer a significant increase in credit
risk since initial recognition, the Company
reverts to recognizing impairment loss
allowance based on 12-month ECL.

ECL is the difference between all
contractual cash flows that are due to the
Company in accordance with the contract
and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls),
discounted at the original effective
interest rate.

12-month ECL are a portion of the lifetime
ECL which result from default events
that are possible within 12 months from
the reporting date. Lifetime ECL are the
expected credit losses resulting from all
possible default events over the expected
life of a financial asset.

ECL are measured in a manner that they
reflect unbiased and probability weighted
amounts determined by a range of
outcomes, taking into account the time
value of money and other reasonable
information available as a result of past
events, current conditions and forecasts
of future economic conditions.

ECL impairment loss allowance (or
reversal) recognized during the period
is recognized as expense/income in the
Statement of Profit and Loss under the
head âOther expensesâ/ âOther incomeâ.

B] Financial liabilities and equity instruments

Debt and equity instruments issued by a Company
entity are classified as either financial liabilities or
as equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.

i. Equity instruments:

An equity instrument is any contract that
evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity
instruments issued by a Company entity are
recognised at the proceeds received, net of
direct issue costs.

Repurchase of the Company''s own equity
instruments is recognised and deducted
directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue
or cancellation of the Company''s own equity
instruments.

ii. Financial Liabilities: -

a) Initial recognition and measurement:

Financial liabilities are recognised when
the Company becomes a party to the
contractual provisions of the instrument.
Financial liabilities are initially measured
at fair value.

b) Subsequent measurement:

Financial liabilities are subsequently
measured at amortised cost using the
effective interest rate method. Financial
liabilities carried at fair value through profit
or loss are measured at fair value with all
changes in fair value recognised in the
Statement of Profit and Loss.

The Company has not designated any
financial liability as at FVTPL.

c) Derecognition:

A financial liability is derecognized
when the obligation under the liability

is discharged or cancelled or expires.
When an existing financial liability is
replaced by another from the same
lender on substantially different terms,
or the terms of an existing liability
are substantially modified, such an
exchange or modification is treated as
the Derecognition of the original liability
and the recognition of a new liability. The
difference between the carrying amount
of the financial liability derecognized and
the consideration paid is recognized in
the Statement of Profit and Loss.

3.10 Earnings Per Share

Basic earnings per share is computed by dividing the net
profit for the period attributable to the equity shareholders
of the Company by the weighted average number of
equity shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period and for all periods presented is adjusted for
events, such as bonus shares, other than the conversion
of potential equity shares that have changed the number
of equity shares outstanding, without a corresponding
change in resources.

For the purpose of calculating diluted earnings per
share, the net profit for the period attributable to equity
shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects of
all dilutive potential equity shares.

4. Critical accounting judgements, assumptions
and use of estimates

The preparation of the Companyâs financial statements
requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future
periods.

The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period or in the
period of revision or future periods if the revision affects
both current and future periods.

Following are the critical judgements, assumptions and
use of estimates that have the most significant effects on
the amounts recognized in these financial statements:

a) Defined employee benefit obligation:

The cost of post-employment benefits is determined
using actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments in the future. These
include the determination of the discount rates;
future salary increases and mortality rates. Due to
the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All
assumptions are reviewed annually.

b) Income taxes

Provision for current tax is made based on
reasonable estimate of taxable income computed as
per the prevailing Income tax laws. The amount of
such provision is based on various factors including
interpretation of tax regulations, changes in tax laws,
acceptance of tax positions in the tax assessments
etc.

c) Investment in an associate

Pursuant to the scheme of amalgamation of INOX
Leisure Limited (erstwhile subsidiary of the Company)
with PVR Limited (now known as PVR INOX Limited)

in the FY 2022-23, the Company had received
1,58,35,940 fully paid-up equity shares of PVR INOX
Limited, which represented 16.16% of its total paid-
up equity capital. In view of power of GFL Limited
to participate in the financial and operating policy
decisions of PVR INOX Limited, it is concluded that
GFL Limited has significant influence over PVR INOX
Limited and hence investment in PVR INOX Limited is
classified as an associate.

The management is required to determine whether
there is any objective evidence that its net investment
in the associate is impaired. After analyzing the
observable data that has come to the attention of
management and the nature of investment being
long-term, even though there are fluctuations in
the quoted price of shares of the associate, the
management has concluded that there is no objective
evidence that its investment in associate is impaired
to carry further impairment testing of the investment.

26 Financial Instruments (Contd..)

26.3 Financial risk management

The Company is exposed to financial risks which include market risk, credit risk and liquidity risk. The Companyâs management
oversees the management of these risks. The Companyâs financial risk management activities are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs
policies and risk objectives.

a. Market Risk

Market risk comprises of currency risk, interest rate risk and other price risk. The Company does not have any exposure
to foreign currency or interest rate risk.

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.
The Company is exposed to equity price risk arising from financial assets such as investments in equity instruments and
mutual funds. The equity investments are in subsidiary and associate which are held for strategic rather than trading
purposes and the Company does not actively trade in these investments. The Companyâs investments in mutual funds are
only in debt funds. Hence the Companyâs exposure to other price risk is minimal.

b. Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. Credit risk arises primarily from bank balances, investments and trade receivables. Credit risk arising from bank
balances and investments in mutual funds are limited since the counterparties are reputed banks and mutual fund houses.
The Company has only one customer who is a reputed broker and there is no history of delayed payments and hence the
credit risk is minimal.

c. Liquidity Risk Management

Ultimate responsibility for Companyâs liquidity risk management rests with the Companyâs Board of Directors. The
Company generally manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching
the maturity profiles of financial assets and liabilities.

26.4 Liquidity risk table

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the entity can be required to pay. The table below include only principal cash flows in relation to financial liabilities.

31 Segment information

The financial report of the Company contains both the consolidated financial statements as well as the separate (standalone)
financial statements. Accordingly, in terms of Paragraph 4 of Ind AS 108 âOperating Segmentsâ, the disclosures in respect of segment
information are made only in the consolidated financial statements.

32 Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013

a) Details of benami property held:

No proceedings have been initiated or are pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made thereunder.

b) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act
read with the Companies (Restriction on number of Layers) Rules, 2017.

c) Compliance with approved Scheme(s) of Arrangements

There is no Scheme of Arrangements that has been approved by the Competent Authority in terms of sections 230 to 237
of the Companies Act, 2013.

d) Loans and advances granted to related party

The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related
parties.

e) Undisclosed income

There is no income surrendered or disclosed as income during the current or preceding year in the tax assessments
under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961),
that has not been recorded in the books of account.

f) Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

g) Ratios

Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios,
is considered as not applicable to the Company as it is a Core Investment Company (CIC) not requiring registration under
Section 45-IA of Reserve Bank of India Act, 1934.

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

h) Utilisation of Borrowed funds and share premium

The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (âFunding Partyâ),
with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate
Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

As per our report of even date attached

For Patankar & Associates For GFL Limited

Chartered Accountants
Firm''s Reg. No: 107628W

Sanjay S Agrawal D. K. Jain Siddharth Jain

Partner Managing Director Director

Membership No: 049051 DIN: 00029782 DIN: 00030202

Place: Pune Place: New Delhi Place: Mumbai

Date: 30 May 2025

Dhiren Asher Lakhan Shamala

Chief Financial Officer Company Secretary

Place: Mumbai Place: Mumbai

Date: 30 May 2025

Mar 31, 2024

3.8 Provisions and contingencies

The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. Contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets are not recognized in the financial statements. However, it is disclosed only when an inflow of economic benefits is probable.

3.9 Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are measured at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

A] Financial assets

a) Initial recognition and measurement:

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognised at fair value, in case of financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the acquisition value of the financial asset.

b) Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the ''Other income'' line item.

c) Subsequent measurement:

For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:

i. The Company''s business model for managing the financial asset and

ii. The contractual cash flow characteristics of the financial asset.

Based on the above criteria, the Company classifies its financial assets into the following categories:

i. Financial assets measured at amortized cost:

A financial asset is measured at the amortized cost if both the following conditions are met:

a) The Company''s business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

This category applies to cash and bank balances and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.

The amortized cost of a financial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if both of the following conditions are met:

a) The Company''s business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in equity instruments, classified under financial assets, are initially measured at fair value. The Company may, on initial recognition, irrevocably elect to measure the same either at FVTOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument are recognised as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVTOCI.

This category does not apply to any of the financial assets of the Company.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied to all other investments of the Company excluding investments in subsidiaries. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognised as ''other income'' in the Statement of Profit and Loss.

a) Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.

For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in profit or loss except for those which are designated as hedging instruments in a hedging relationship.

b) Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Company''s Balance Sheet) when any of the following occurs:

i. The contractual rights to cash flows from the financial asset expires;

ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;

iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);

iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.

In cases where the Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability.

The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

On derecognition of a financial asset, the difference between the asset''s carrying amount

and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

c) Impairment of financial assets

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

The Company does not have exposure to trade receivables and financial assets measured at FVTOCI.

In case of financial assets measured at amortized cost, the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

Subsequently, if the credit quality of the financial asset improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate.

12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the reporting date. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts

determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as expense/income in the Statement of Profit and Loss under the head ''Other expenses''/ ''Other income''.

B] Financial liabilities and equity instruments

Debt and equity instruments issued by a Company entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

i. Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company entity are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.

ii. Financial Liabilities: -

a) Initial recognition and

measurement:

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at fair value.

b) Subsequent measurement:

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.

The Company has not designated any financial liability as at FVTPL.

c) Derecognition of financial liabilities:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the Derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.

3.10 Earnings Per Share

Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

3.11 Business Combination under Common Control

A business combination involving entities or businesses under common control is a business combination in which

all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are specifically covered by Appendix C of Ind AS 103: Business Combinations. Such transactions are accounted for using the pooling-of-interest method. The assets and liabilities of the acquired entity are recognised at their respective carrying values. No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The only adjustments that are made are to harmonise the accounting policies. Issue of fresh securities towards the consideration for the business combination is recorded at nominal value. The identity of the reserves transferred by the acquired entity is preserved and they are carried in the same form and manner. The difference, if any, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve.

4. Critical accounting judgements, assumptions and use of estimates

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision or future periods if the revision affects both current and future periods.

Following are the critical judgements, assumptions and use of estimates that have the most significant effects on the amounts recognized in these financial statements:

a) Defined employee benefit obligation:

The cost of post-employment benefits is determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rates; future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed annually.

b) Income taxes

Provision for current tax is made based on reasonable estimate of taxable income computed as per the prevailing Income tax laws. The amount of such provision is based on various factors including interpretation of tax regulations, changes in tax laws, acceptance of tax positions in the tax assessments etc.

c) Investment in associate

As explained in note 8, pursuant to the scheme of amalgamation of INOX Leisure Limited with PVR Limited (now known as PVR INOX Limited) in the previous year, the Company had received 1,58,35,940 fully paid-up equity shares of PVR INOX Limited, which represented 16.16% of its total paid-up equity capital. In view of power of GFL Limited to participate in the financial and operating policy decisions of PVR INOX Limited, it is concluded that GFL Limited has significant influence over PVR INOX Limited and hence investment in PVR INOX Limited is classified as an associate.

26 Employee Benefits

(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees. During the year, contribution to Provident fund of Rs. 3.20 lakhs (previous year Rs. 7.76 lakhs) recognized as an expense and included in ''Contribution to Provident fund'' in the Statement of Profit and Loss.

(b) Defined Benefit Plans

The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the payment of Gratuity Act, 1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefit. The level of benefits provided depends on the employee''s length of services and salary at retirement age. The Company''s defined benefit plan is unfunded. There are no other post retirement benefits provided by the Company.

27 Financial Instruments

27.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to the stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of total equity of the Company. The Company is not subject to any externally imposed capital requirements. The Company''s Board of Directors (BOD) reviews the capital structure of the Company. As part of this review, BOD considers the cost of capital and risk associated with each class of capital.

27.3 Financial risk management

The Company is exposed to financial risks which include market risk, credit risk and liquidity risk. The Company''s management oversees the management of these risks. The management provides assurance that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.

a. Market Risk

Market risk comprises of currency risk, interest rate risk and other price risk. The Company does not have any exposure to foreign currency or interest rate risk.

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and mutual funds. The company is not exposed to equity price risks arising from equity investments since the entire equity investments is in subsidiary and associate which are held for strategic rather than trading purposes. The Company does not actively trade these investments. The Company is also exposed to price risk arising from investments in debt mutual funds, but these being debt instruments, the exposure to risk of changes in market rates is minimal.

b. Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from bank balances, investments and trade receivables. Credit risk arising from bank balances and investments in mutual funds are limited since the counterparties are reputed banks and financial institution. The Company has only one customer who is a reputed broker and there is no history of delayed payments and hence the credit risk is minimal.

c. Liquidity Risk Management

Ultimate responsibility for Company''s liquidity risk management rests with the Company''s Board of Directors. The Company generally manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

30 Corporate Social Responsibility (CSR) (Contd..)

(b) Reason for shortfall in preceding year:

During the preceding year, the Company could not spent the entire amount required to be spent as per Section 135(5) of the Act as it was in process of identifying the suitable projects for CSR. The unspent CSR amount was subsequently transferred to funds mentioned under Schedule VII of the Act within the timelines specified.

(c) The nature of CSR activities undertaken by the Company as below:

CSR activities undertaken for Prime Minister''s Citizen Assistance and Relief in Emergency Situations Fund (PMCARES).

33 Segment information

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 âOperating Segments'', no disclosures related to segments are presented in these standalone financial statements.

34 Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013

a) Details of benami property held:

No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made thereunder.

b) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017

c) Compliance with approved Scheme(s) of Arrangements

There is no Scheme of Arrangements that has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

d) Loans and advances granted to related party

The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties.

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

e) Undisclosed income

There is no income surrendered or disclosed as income during the current or preceding year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), that has not been recorded in the books of account.

f) Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

g) Ratios

Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios, is considered as not applicable to the Company as it is a Core Investment Company (CIC) not requiring registration under Section 45-IA of Reserve Bank of India Act, 1934.

h) Utilisation of Borrowed funds and share premium

The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (âFunding Partyâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.â

As per our report of even date attached

For Patankar & Associates For GFL Limited

Chartered Accountants Firm''s Reg. No: 107628W

Sanjay S Agrawal D. K. Jain Siddharth Jain

Partner Managing Director Director

Membership No: 049051 DIN: 00029782 DIN: 00030202

Place: Pune Place: New Delhi Place: Mumbai

Date: 29 May 2024

Dhiren Asher Vineesh Thazhumpal

Chief Financial Officer Company Secretary

Place: Mumbai Place: Mumbai

Date: 29 May 2024

Mar 31, 2023

Note: The Board of Directors of the erstwhile INOX Leisure Limited (which was a subsidiary of the Company), at its meeting held on 27 March 2022, approved a Scheme of Amalgamation (âthe Schemeâ) of INOX Leisure Limited with PVR Limited (now known as PVR INOX Limited) under Sections 230 to 232 of the Companies Act, 2013. Over time, the Scheme had received all the necessary approvals from the authorities and a certified copy of the National Company Law Tribunal order was filed with the Registrar of Companies on 6 February 2023, making the scheme effective and the appointed date as per the Scheme was 1 January 2023. As per the Scheme, the share exchange ratio was 3 equity shares of the face value of H 10 of PVR INOX Limited, credited as fully paid-up, for every 10 equity shares of the face value of H 10 each fully paid-up held in erstwhile INOX Leisure Limited. Consequently, the Company has received 1,58,35,940 fully paid-up equity shares of PVR INOX Limited, which represents 16.16% of its total paid-up equity capital. Accordingly, the Company has derecognised its investment in its subsidiary, INOX Leisure Limited, recognised the resultant investment in PVR INOX Limited at fair value and the resultant gain of H 2,46,673.67 lakhs is recognised in the statement of profit and loss as an exceptional item and the deferred tax thereon is also shown separately in the statement of profit and loss. Further, the resultant investment in PVR INOX Limited is classified as investment in an associate.

17.1 Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of Re 1 per share. Each shareholder is eligible for one vote per share held and entitled to receive dividend as declared from time to time. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, in proportion of their shareholding.

In FY 2008-09, the Company had bought back and extinguished 59,30,000 equity shares of Re 1 per share at an average price of H 103.48 per share from open market, and accordingly the face value of Re 1 per share was reduced from the paid up equity share capital and correspondingly the amount of H 59.30 Lakhs was transferred to Capital Redemption Reserve from the Statement of Profit and Loss.

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

26 Employee Benefits

(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees. During the year, contribution to Provident fund of H 7.76 lakhs (previous year H 5.09 lakhs) recognized as an expense and included in ''Contribution to Provident fund'' in the Statement of Profit and Loss.

(b) Defined Benefit Plans

level of benefits provided depends on the employee''s length of services and salary at retirement age. The Company''s defined benefit plan is unfunded. There are no other post retirement benefits provided by the Company.

The most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at 31 March 2023 by Mr. Charan Gupta, fellow member of the institute of the Actuaries of India. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.

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

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

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

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

(iv) Sensitivity Analysis

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

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

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

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

(c) Long term employment benefits:

Compensated absences

The liability towards compensated absences (annual and short term leave) for the year ended 31 March 2023 based on actuarial valuation carried out by using Projected unit credit method resulted in decrease in liability by H 19.30 lakhs (preceding year increase in liability by H 5.56 lakhs) which is included in the employee benefits in the Statement of Profit and Loss.

27 Financial Instruments

27.1 Capital Management

27.3 Financial risk management

a. Market Risk

Market risk comprises of currency risk, interest rate risk and other price risk. The Company does not have any exposure to foreign currency or interest rate risk.

b. Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from cash and cash equivalents, investments in mutual funds and receivables. Credit

risk arising from investment in debt mutual funds is limited. Credit risk arising from receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Hence credit risk is minimal for the Company.

c. Liquidity Risk Management

b. Financial instrument measured at Amortised Cost

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different than the values that will be eventually received or paid.

The remuneration of directors and Key Management Personnel (KMP) is determined by the Nomination and Remuneration Committee having regard to the performance of individuals and market trends.

Notes

(a) Amounts outstanding are unsecured and will be settled in cash.

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

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

31 Corporate Social Responsibility (CSR)

The gross amount required to be spent by the Company during the year towards Corporate Social Responsibility (CSR) is H 25.41 lakhs (31 March 2022: H 521.82 Lakhs)

(b) Reason for shortfall:

During the year, the Company could not spent the entire amount required to be spent as per Section 135(5) of the Act as it was in process of identifying the suitable projects for CSR.

(c) The nature of CSR activities undertaken by the Company as below:

CSR activities undertaken for promoting education and training to Children with Special Needs (CWSN).

(d) During the year ended 31 March 2020, the Chemical Business Undertaking of the Company was demerged as per the Scheme of Arrangement (âthe Schemeâ) between the Company and its wholly owned subsidiary, INOX Fluorochemicals Limited, now known as Gujarat Fluorochemicals Limited (âthe resulting companyâ). As per the legal opinion obtained by the Company, the mandatory obligation towards expenditure to be incurred on Corporate Social Responsibility (CSR) in respect of the profits of the Demerged Chemical Business Undertaking vests with the resulting company i.e. Gujarat Fluorochemicals Limited. Accordingly, the amount of Corporate Social Responsibility (CSR) obligation of H 522.00 lakhs had been recovered by the Company from resulting company. Consequently, the Corporate Social Responsibility (CSR) expenses charged to the statement of profit and loss were net of such recovery as under:

Note: The contingent liabilities in respect of the chemical business undertaking and the renewable energy business, demerged in earlier years, vest with the resulting companies as per the respective schemes of arrangements as sanctioned by the Hon''ble National Company Law Tribunal.

34 Segment information

35 Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013

a) Details of benami property held:

No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the Rules made thereunder.

b) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017.

c) Compliance with approved Scheme(s) of Arrangements

There is no Scheme of Arrangements that has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.

d) Loans and advances granted to related party

The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related parties.

e) Undisclosed income

There is no income surrendered or disclosed as income during the current or preceding year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961), that has not been recorded in the books of account.

f) Details of Crypto Currency or Virtual Currency

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

g) Ratios

Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios, is considered as not applicable to the Company as it is a Core Investment Company (CIC) not requiring registration under Section 45-IA of Reserve Bank of India Act, 1934.

h) Utilisation of Borrowed funds and share premium

The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities (âââIntermediariesââ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ââUltimate Beneficiariesââ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (âââFunding Partyââ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âââUltimate Beneficiariesââ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Mar 31, 2018

1. Company information

Gujarat Fluorochemicals Limited (âthe Companyâ) is a public limited company incorporated in India. The Company is engaged in manufacturing and trading of refrigeration gases, anhydrous hydrochloric acid, caustic soda, chlorine, chloromethane, polytetrafluoroethylene (PTFE) and post-treated polytetrafluoroethylene (PTPTFE). The Company caters to both domestic and international markets. The Companyâs parent company is Inox Leasing and Finance Limited. The shares of the Company are listed on the Bombay Stock Exchange and the National Stock Exchange of India.

The Companyâs registered office is located at Survey No. 16/3, 26 & 27, Village Ranjitnagar, Taluka Ghoghamba, District Panchmahal, Gujarat 389380, and the particulars of its other offices and plants are disclosed in the annual report.

2. Statement of compliance and basis of preparation and presentation

2.1 Statement of compliance

These financial statements are the separate financial statements of the Company (also called standalone financial statements) and comply in all material aspects with the Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013 (âthe Actâ) and other relevant provisions of the Act.

2.2 Basis of measurement

These financial statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest Lakhs, unless otherwise indicated.

These financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the significant accounting policies.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

2.3 Basis of preparation and presentation

Effective 1^st April, 2016, the Company has adopted all the Ind AS Standards and the adoption was carried out in accordance with Ind AS 101 âFirst time adoption of Indian Accounting Standardsâ, with 1^st April, 2015 as the transition date. The transition was carried out from the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended), which was the Previous GAAP

Accounting policies have been consistently applied except where a newly issued accounting standard initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements have been prepared on accrual and going concern basis.

Any asset or liability is classified as current if it satisfies any of the following conditions:

- the asset/liability is expected to be realized/settled in the Companyâs normal operating cycle;

- the asset is intended for sale or consumption;

- the asset/liability is held primarily for the purpose of trading;

- the asset/liability is expected to be realized/settled within twelve months after the reporting period;

- the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;

- in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All other assets and liabilities are classified as non-current.

For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of products and services and the time between the acquisition of assets or inventories for processing and their realisation in cash and cash equivalents.

These financial statements were authorized for issue by the Companyâs Board of Directors on 25th May, 2018.

* During the current financial year, the Company has sold equity shares of Inox Wind Limited (IWL) through Offer For Sale (OFS). Therefore, the shareholding of the Company in IWL has reduced from 63.09% as at 31^st March, 2017 to 56.98% as at 31^st March, 2018.

3. Critical accounting judgements and use of estimates

In application of Companyâs accounting policies, which are described in Note 3, the Directors of the Company are required to make judgements, estimations and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision or future periods if the revision affects both current and future periods.

3.1 Following are the critical judgements that have the most significant effects on the amounts recognised in these financial statements:

a) Leasehold land

In respect of leasehold lands, considering the terms and conditions of the leases, particularly the transfer of the significant risks and rewards, it is concluded that they are in the nature of operating leases.

b) Investment in Inox Leisure Limited (ILL)

GFLâs ownership interest in ILL is 48.09%. The shareholders of ILL have passed a resolution at the Annual General Meeting held on 23^rd August, 2013 amending its Articles of Association entitling GFL to appoint majority of Directors on the Board of ILL if GFL holds not less than 40% of the paid-up equity capital of ILL. Accordingly GFL is having control over ILL in terms of Ind AS 110 and hence ILL is classified as a subsidiary of GFL.

3.2 Following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

a) Useful lives of Property, Plant & Equipment (PPE), Investment property and Intangible assets

The Company has adopted useful lives of PPE, Investment property and Intangible assets as described in Note 3.8, 3.9 and 3.10 above. The Company reviews the estimated useful lives of PPE, Intangible assets and Investment property at the end of each reporting period.

b) Fair value measurements and valuation processes

The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above.

For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions. Where necessary, the Company engages third party qualified valuers to perform the valuation.

Information about the valuation techniques and inputs used in determining the fair values of various assets and liabilities are disclosed in Note 44.10.

c) Other assumptions and estimation uncertainties, included in respective notes are as under:

- Estimation of current tax expense and payable, recognition of deferred tax assets and possibility of utilizing available tax credits - see Note 36 and Note 22

- Measurement of defined benefit obligations and other long-term employee benefits: - see Note 43

- Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources - see Note 21 and Note 38

- Impairment of financial assets - see Note 44

4.1 Fair Value of Investment Properties

Fair valuation of Investment Properties as at 31^st March, 2018 and 31^st March, 2017 has been arrived at on the basis of valuation carried out as on respective dates by an independent valuer not related to Company. The valuer is registered with the authority which governs the valuers in India, and in the opinion of management he has appropriate qualifications and recent experience in the valuation of properties. For all Investment properties, fair value was determined based on the capitalisation of net income methods where the market rentals of all lettable units of the properties are assessed by reference to the rentals achieved in the lettable units as well as other lettings of similar properties in the neighbourhood. The capitalisation rate adopted is made by reference to the yield rates observed by the valuers for similar properties in the locality and adjusted based on the valuerâs knowledge of the factors specific to the respective properties. Thus, the significant unobservable inputs are as follows:

1. Monthly market rent, taking into account the difference in location, and individual factors, such as frontage and size between the comparable and the property; and

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

4.2 Expenses and income in respect of investment properties

Expenses (excluding depreciation) amounting to Rs.143.00 Lakhs (FY 2016-2017: Rs.112.46 Lakhs) in respect of repairs,electricity charges, security expenses etc. are included in Note 35 âOther Expensesâand income amounting to Rs.638.63 Lakhs (FY 2016-2017: Rs.698.91 Lakhs) is included in Note 28 âOther incomeâ

1. The Company has provided undertakings to the various lenders of itâs subsidiaries , not to dilute its stake below 51%, in Inox Wind Limited and Inox Renewables Limited & its stake below 100% in Gujarat Fluorochemicals Singapore Pte. Limited.

2. Consequent to the equity shares of Inox Wind Limited (IWL) being listed on the stock exchanges on 9^th April, 2015, out of the total equity shares of IWL held by the Company, 4,43,83,646 shares were locked-in upto 30^th March, 2018. Subsequently, during the current year, the Company has sold 1,35,61,331 equity shares of IWL under Offer for Sale (OFS).

5.1 Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having par value of Rs.1 per share. Each shareholder is eligible for one vote per share held and entitled to receive dividend as declared from time to time. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, in proportion of their shareholding.

5.2 Particulars of dividend paid to shareholders

On 3^rd October, 2017, final dividend of Rs.3.50 per share (Total dividend of Rs.4,627.45 Lakhs including dividend distribution tax (DDT) of Rs.782.70 Lakhs) for FY 2016-17 was paid to holders of equity shares.

In respect of financial year ended 31^st March, 2018,the Board of Directors propose that a dividend of Rs.3.50 per share be paid on equity shares. The equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these Standalone financial statements. The total estimated equity dividend (including dividend distribution tax of Rs.790.30 Lakhs) to be paid is Rs.4,635.05 Lakhs.

5.3 During the current year, 293213 and 21147 equity shares in respect of FY 2009-10 and FY 2010-11 respectively, have been transferred to the Investor Education and Protection Fund (I EPF).

Capital reserves represents compensation received for phased reduction and cessation of CFC production and dismantling of plant, unless otherwise used, as stipulated. During the year, the Company has received Nil (FY 2016-2017: Rs.212.53 Lakhs) in this regard.

In FY 2008-09, the Company has bought back and extinguished 59,30,000 equity shares of Rs.1 per share at an average price of Rs.103.48 per share from open market, and accordingly the face value of Rs.1 per share is reduced from the paid up equity share capital and correspondingly the amount of Rs.59.30 Lakhs was transferred to Capital Redemption Reserve from Statement of Profit and Loss.

General reserve is used from time to time to transfer profit from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

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

The amount that can be distributed by the Company as dividends to its equity shareholders is determined after considering the requirements of the Companies Act, 2013 and subject to levy of dividend distribution tax, if any. Thus, the amounts reported above may not be distributable in entirety.

(i) Company has taken Foreign Currency loan in form of ECB from ICICI Bank Limited on 13^th February, 2012. Subsequently company has entered into call spread option contract to hedge the foreign currency risk and interest risk, wherein interest rate was fixed at 10.55% p.a.out of which 4.20% p.a. is payable quarterly as Premium on Option Contract.

(ii) Company has taken Foreign Currency loan in form of ECB from ICICI Bank Limited, Mizuho Bank Limited and HSBC Limited. Subsequently company has entered into call spread option contract with ICICI Bank Limited and Cross Currency Swap agreement with Mizuho Bank Limited and HSBC Limited to hedge the foreign currency risk and interest rate risk. These derivative instruments are fair valued as on balance sheet date.

(iii) In respect of unclaimed dividends, the actual amount to be transferred to the Investor Education and Protection Fund is determined on the due date. Consequently, during the current year, final unclaimed dividends of Rs.12.52 Lakhs and interim unclaimed dividend Rs.8.15 Lakhs in respect of FY 2009-2010 and FY 2010-2011 respectively, are transferred to the Investor Education and Protection Fund (IEPF).

Revenue from operations for the year ended 31^st March, 2017 and for the period from 1^st April, 2017 to 30^th June, 2017 was reported inclusive of excise duty. Goods and Services Tax (âGSTâ) was implemented with effect from 1^st July 2017, which subsumed excise duty. As per Ind AS 18, revenue from operations for the period from 1^st July, 2017 to 31^st March, 2018 is reported net of GST. Therefore, revenue from operations for the current year is not comparable with corresponding previous year. Comparable revenue from operations included in Total Income above has been computed by adjusting excise duty from the revenue from operations of respective previous period, on like-to-like basis and same is tabulated below:

The tax rate used for the years ended 31^st March, 2018 and 31^st March, 2017 in reconciliations above is the corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under the Indian tax law.

The increase in Corporate tax rate applicable in India from 34.608% to 34.994% (on account of increase in Cess) was substantially enacted before 31^st March, 2018 and will be effective from 1^st April, 2018 . As a result, the deferred tax balances have been remeasured and effect of the same is reflected in the above reconciliation.

Notes:-

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

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

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

d) HDFC Bank Limited:- The Working capital demand Loan facility from HDFC Bank Limited is secured by first pari-passu charge in favour of the bank by way of hypothecation over the borrowerâs stock and receivables, both present and future, of the Companyâs unit located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat.

6. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt - in respect of claim by a service provider - Rs.Nil (as at 31^st March, 2017: Rs.7.22 Lakhs).

b. In respect of Income tax matters - Rs.32,389.97 Lakhs (as at 31^st March, 2017: Rs.27,427.89 Lakhs). This includes:

i. In the completed assessments, the demands are mainly on account of disallowance under section 14A and reduction in the claim of deduction under section 80IA .

ii. On account of slump sale of wind energy business by substituting estimated market value in place of actual consideration received.

The Company has not accepted the above demands and has contested the same at appropriate levels.

c. In respect of Service tax matters - Rs.328.28 Lakhs (as at 31^st March, 2017: Rs.432.16 Lakhs).

i. Amount of Rs.Nil Lakhs (as at 31^st March, 2017: Rs.17.94 Lakhs) for which the Company had received various show cause notices regarding levy of service tax on certain items.

ii. Amount of Rs.6.16 Lakhs (as at 31^st March, 2017: Nil) in respect of collection of cylinder rent charged from customers. The Company has filed appeal before Commissioner of Central Excise and Service tax.

iii. Amount of Rs.322.12 Lakhs (as at 31^st March, 2017 : Rs.414.22 Lakhs) in respect of Service tax demand on account of non-payment of Service tax in respect of Import of services relating to supply of tangible goods, online information database access or retrieval services. The Company has filed appeal before CESTAT and the matters are pending.

d. In respect of Excise duty matters - Rs.3,661.78 Lakhs (as at 31^st March, 2017: Rs.3,641.43 Lakhs). This includes:

i. Amount of Rs.2,169.49 Lakhs (as at 31^st March, 2017: Rs.2,251.52 Lakhs ) for which the Company has received various show cause notices regarding service tax input credit on certain items, inter-unit transfers and freight charges recovered from buyers for supply of goods at buyers premises. The Company has filed the replies or is in the process of filing replies.

ii. Amount of Rs.211.55 Lakhs (as at 31^st March, 2017: Rs.462.58 Lakhs) is in respect of demand on account of cenvat credit availed on certain items, levy of excise duty on freight recovered from customers. The Company has filed appeal before Commissioner of Central Excise and Service tax (Appeals).

iii. Amount of Rs.1,280.74 Lakhs (as at 31^st March, 2017: Rs.927.32 Lakhs) 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.1,241.65 Lakhs (as at 31^st March, 2017: Rs.1,170.50 Lakhs).

Amount of Rs.11.82 Lakhs (as at 31^st March, 2017: Rs.11.82 Lakhs) for which the Company had received various show cause notice regarding inadmissible EPCG benefit on consumables imported.

Amount of Rs.1,229.82 Lakhs (as at 31^st March, 2017: Rs.1,158.68 Lakhs) 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.

In respect of above Service tax, Excise and Customs matters, the Company has paid an amount of Rs.148.84 Lakhs (as at 31^st March, 2017: Rs.115.10 Lakhs) and not charged to Statement of Profit and Loss.

f. In respect of Sales tax matters - VAT Rs.101.64 Lakhs (as at 31^st March, 2017: Rs.62.88 Lakhs) & CST Rs.69.54 Lakhs (as at 31^st March, 2017: Rs.49.85 Lakhs).

Company has received VAT & CST assessment order in respect of disallowance of proportionate Input tax credit reduced on capital goods at the rate of 2% of ratio of OGS sales to gross turnover of sales levying VAT demand of Rs.101.64 Lakhs & CST demand of Rs.69.54 Lakhs for the F.Y. 2011-2012, F.Y. 2012-2013 & F.Y. 2013-2014 respectively. The Company has not accepted the Order of Joint Commissioner of Commercial Tax for F.Y.2011-2012 and has filed appeal before Gujarat value added Tax tribunal, Ahmedabad.

For F.Y. 2012-2013, the Company has filed appeal before Joint Commissioner of Commercial Tax and is in process of filing appeal with the Joint Commissioner of Commercial tax (Appeals) for F.Y. 2013-2014.

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, GFL GM Fluorspar SA of Rs.4,950.23 Lakhs (as at 31^st March, 2017: Rs.6,156.63 Lakhs) - equivalent to USD 7.59 million (as at 31^st March, 2017 : USD 9.49 million).

i. Corporate guarantee given to bank in respect of loan taken by a step-down subsidiary, GFL GM Fluorspar SA of USD 2 million for their working capital requirement. The outstanding amount of Working capital loan as at 31^st March, 2018 is Rs.912.49 Lakhs (31^st March, 2017: Nil) - equivalent to USD 1.40 million (31^st March, 2017: Nil) and Letter of Credit facility Rs.287.43 Lakhs (31^st March, 2017: Nil) equivalent to USD 0.44 million. (31^st March, 2017: Nil)

j. Corporate guarantee given to Axis Trustee Services Limited (Debenture Trustee) with respect Non-Convertible Debentures (NCD) issued by a step down subsidiary, Inox Wind Infrastructure Services Ltd (IWISL) for the purpose of (i) refinancing itâs existing capital expenditure costs; (ii) financing itâs fresh capital expenditures; (iii) refinancing itâs existing financial indebtedness and (iv) itâs general corporate purposes. The outstanding amount of NCD as at 31^st March, 2018 is Rs.25,000.00 Lakhs (31^st March, 2017: Nil)

k. Lien is marked on Companyâs investments in Fixed Maturity Plan of Rs.10,500 Lakhs in favour of Axis Finance Ltd in respect to term loan taken by Inox Wind Infrastructure Services Ltd (IWISL) for general corporate purposes. The outstanding amount of Loan as at 31^st March, 2018 is Rs.10,056.16 Lakhs (31^st March, 2017: Nil)

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

7. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.27,082.60 Lakhs (as at 31^st March, 2017: Rs.11,641.74 Lakhs).

8. Segment information

Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on single business segment of âChemicalsâ-comprising of Refrigerant Gases, Anhydrous Hydrochloric Acid, Caustic-Chlorine, chloromethane, PTFE and PT-PTFE. Electricity generated by captive power plant is consumed in chemical business and not sold outside. Hence the Company is having only one reportable business segment under Ind AS 108 on âOperating segmentâ. The information is further analysed based on the different classes of products.

9.1 Information about major customers

There are no single external customers who contributed more than 10% to the Companyâs revenue for both FY 2017-2018 and FY 2016-2017.

10. Leasing arrangements

10.1 As a Lessee

(a) General description of operating Lease

Operating leases relate to leases of plants taken on operating lease are for initial non-cancellable period of 10 years which can be further extended at the mutual option of both the parties. The future minimum lease payments under these lease arrangements are as under:

(b) Interest in land taken on lease and classified as operating lease:

The leasehold lands are taken for the period of 83 to 99 years. The entire lease premium is already paid and future rentals are nominal. Amortisation of such lease payments is included in âRentâin Statement of Profit and Loss and the balance remaining amount to be amortised is included in balance sheet as âPrepayments Leasehold landâ.

10.2 As a Lessor

General description of operating Lease

Operating leases relate to Investment Properties owned by the Company with lease terms of between 11 to 60 months and are unsually renewable by mutual concent on mutually agreeable terms. All operating lease contracts contain market review clauses in the event that the lessee exercises its option to renew. Lessee does not have an option to purchase the property at the expiry of the lease period.

Rental Income earned by the Company from its Investment Properties and direct operating expenses arising on the investment properties for the year are set out in Note 29 and Note 36 respectively.

11. Employee Benefits:

(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees.

Contribution to Provident fund of Rs.579.95 Lakhs (31^st March, 2017: Rs.495.74 Lakhs) is recognized as an expense and included in âContribution to Provident & Other fundsâin the Statement of Profit and Loss.

(b) Defined Benefit Plans:

The Company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the payment of Gratuity Act,1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefit. The level of benefits provided depends on the employeeâs length of services and salary at retirement age. The companyâs defined benefit plan is unfunded.

There are no other post retirement benefits provided by the company.

The most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at 31^st March, 2018 by Mr. G N Agarwal, fellow member of the institute of the Actuaries of India. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method.

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

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

a) Interest risk:

a decrease in the bond interest rate will increase the plan liability.

b) Salary risk:

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

(iv) Sensitivity Analysis

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

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

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

Annual leave and short term leave

The liability towards compensated absences (annual and short term leave) for the year ended 31^st March, 2018 based on actuarial valuation carried out by using Projected Accrued Benefit Method resulted in increase in liability by Rs.154.13 Lakhs (31^st March, 2017: Rs.224.68 Lakhs), which is included in the employee benefits in the Statement of Profit and Loss.

12. Financial instruments:

12.1 Capital management

The Company manages its capital structure with a view that it will be able to continue as going concern while maximising the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of Company consists of net debt (borrowings as detailed in Note 19 and Note 23 offset by cash and bank balance) and total equity of the Company.

The Company is not subject to any externally imposed capital requirement. However, under the terms of the major borrowings the Company is required to keep the gearing ratio of debt to equity not more than 300% and the ratio of debt to EBITDA must not be more than 300%. The Company has complied with these covenants throughout the reporting period. As at 31^st March, 2018, the ratio of debt to EBITDA is 126% (31^st March, 2017 was 211%).

The Companyâs risk management committee reviews the capital structure of the Company. As part of this review, the committee considers the cost of capital and risk associated with each class of capital. The Company has a target gearing ratio of less than 100 % determined as the proportion of net debt to equity.

12.2 Financial risk management

The Companyâs corporate finance function provides services to the business, coordinates access to financial market, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of the risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimize the effects of currency and interest rate risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Companyâs policies approved by the Board of Directors of the Company, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments and the investment of the excess liquidity. Compliance with policies and exposure limits is reviewed internally on a continuous basis. The Company doesnât enter into or trade financial instruments including derivative financial instruments for speculative purpose.

12.3 Market Risk

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

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

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

12.4 Foreign Currency Risk Management

The Company is subject to the risk that changes in foreign currency values impact the Companyâs export revenues, imports of material/capital goods, services/royalty and borrowings etc. Exchange rate exposures are managed within approved policy parameters by entering in to foreign currency forward contracts, options and swaps.

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

The carrying amount of unhedged foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follow:

12.5.1 Foreign Currency Sensitivity Analysis

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

The following table details the Companyâs sensitivity to a 10% increase and decrease in INR against the relevant foreign currencies.10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes unhedged external loans, receivables and payables in currency other than the functional currency of the Company.

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

12.6 Interest Rate Risk Management

Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

As per the Companyâs risk management policy to minimize the interest rate cash flow risk on foreign currency long term borrowings, interest rate swaps are taken for most of the borrowings to convert the variable interest rate risk into rupee fixed interest rate. Thus, there is no major interest rate risks associated with foreign currency long term borrowings. In respect of foreign currency short term borrowings and rupee loans the Company does not have any borrowings at variable rate of interest.

12.6.1 Interest Rate Sensitivity Analysis

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

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the companyâs profit for the year ended 31^st March, 2018 would decrease/increase by Rs.6.83 Lakhs (net of tax) (for the year ended 31^st March, 2017 decrease/increase by Rs.8.13 Lakhs (net of tax)). This is mainly attributable to the companyâs exposure to interest rates on its variable rate borrowings.

12.6.2 Interest Rate Swap Contracts

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

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

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

The line-items in the Standalone balance sheet that include the above hedging instruments are âOther financial assetsâand âOther financial liabilitiesâ.

12.7 Other price risks

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and mutual funds. The company is exposed to equity price risks arising from equity investments. Equity investments in subsidiaries and Joint Ventures are held for strategic rather than trading purposes. The Company does not actively trade these investments. The Company is also exposed to price risk arising from investments in debt mutual funds, but these being debt instruments, the exposure to risk of changes in market rates is minimal.

12.7.1 Equity Price Sensitivity Analysis

The sensitivity analysis below have been determined based on the exposure to equity price risks for Investments in equity shares (including investments in equity oriented mutual funds) of companies other than subsidiaries and joint ventures at the end of the reporting period.

If equity prices had been 5% higher/lower, profit for the year ended 31^st March, 2018 would increase/ decrease by Rs.1176.36 Lakhs (for the year ended 31^st March, 2017: increase / decrease by Rs.398.37 Lakhs) as a result of the change in fair value of equity investments which are designated as FVTPL.

12.8 Credit Risk Management

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

a) Trade receivables

Credit risk arising from trade receivables is managed in accordance with the Companyâs established policy, procedures and control relating to customer credit risk management.The average credit period on sales of products is less than 90 days. The concentration of credit risk is limited due to the fact that the customer base is large and diverse. There is no external customer representing more than 10% of the total balance of trade receivables. All trade receivables are reviewed and assessed for default on a quarterly basis.

For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. The provision matrix at the end of the reporting period is as follows:

Upto last year, no provision for expected credit loss was made in respect of trade receivables outstanding for less than six months. From this year, provision for expected credit loss is made @ 0.01% in respect of such trade receivables. Due to this change in estimate, the provision for expected credit loss is higher by Rs.4.37 Lakhs. The effect of this change in the estimate in future periods cannot be estimated and is not likely to be significant.

b) Loans and other receivables

The Company applies Expected Credit Losses (ECL) model for measurement and recognition of loss allowance on the loans given by the Company to the external parties. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the company expects to receive (i.e., all cash shortfalls), discounted at the effective interest rate.

The Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to 12-month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the reporting date. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as expense/income in the Statement of Profit and Loss under the head âOther expensesâ/ âOther incomeâ.

c) Other financial assets

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

12.9 Liquidity Risk Management

Ultimate responsibility for liquidity risk management rests with the committee of Board of Directors for operations, which has established an appropriate liquidity risk management framework for the management of the Companyâs short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

12.9.1Liquidity and interest risk table

The following table detail the analysis of derivative as well as non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

12.10 Fair Value Measurements

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

12.10.2 Fair Value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)

The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

13. Related Party disclosures

(A) Where control exists:

Holding company -

Inox Leasing and Finance Limited

Subsidiary companies -

Inox Leisure Limited (ILL)

Inox Wind Limited (IWL)

Inox Renewables Limited (IRL)

Inox Infrastructure Limited

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

Gujarat Fluorochemicals GmbH, Germany

Gujarat Fluorochemicals Singapore Pte. Limited

Inox Renewables (Jaisalmer) Limited- Subsidiary of IRL

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

Shouri Properties Private Limited - Subsidiary of ILL

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

Marut Shakti Energy Limited - Subsidiary of IWISL

Sarayu Wind Power (Kondapuram) Private Limited-Subsidiary of IWISL

Sarayu Wind Power (Tallimadugula) Pvt. Ltd-Subsidiary of IWISL

Vinirrmaa Energy Generation Pvt. Ltd-Subsidiary of IWISL

Satviki Energy Private Limited - Subsidiary of IWISL

RBRK Investments Limited - Subsidiary of IWISL w.e.f. 30^th August 2016

Wind One Renergy Private Limited - Subsidiary of IWISL incorporated on 26^th April, 2017

Wind Three Renergy Private Limited - Subsidiary of IWISL incorporated on 20^th April, 2017

Suswind Power Private Limited - Subsidiary of IWISL incorporated on 27^th April, 2017

Vasuprada Renewables Private Limited - Subsidiary of IWISL incorporated on 27^th April, 2017

Ripudaman Urja Private Limited - Subsidiary of IWISL incorporated on 28^th April, 2017

Vibhav Energy Private Limited - Subsidiary of IWISL incorporated on10^th July, 2017

Haroda Wind Energy Private Limited - Subsidiary of IWISL incorporated on16^th November, 2017

Vigodi Wind Energy Private Limited - Subsidiary of IWISL incorporated on 20^th November, 2017

Aliento Wind Energy Private Limited - Subsidiary of IWISL incorporated on17^th January, 2018

Flurry Wind Energy Private Limited - Subsidiary of IWISL incorporated on18^th January, 2018

Tempest Wind Energy Private Limited - Subsidiary of IWISL incorporated on 17^th January, 2018

Vuelta Wind Energy Private Limited - Subsidiary of IWISL incorporated on 17^th January, 2018

Flutter Wind Energy Private Limited - Subsidiary of IWISL incorporated on 18^th January, 2018

Swanston Multiplex Cinema Private Limited (SMPCL) - Subsidiary of ILL from 5^th March, 2018

(a joint venture up to 4^th March, 2018)

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

Associates-

Following subsidiaries of IWISL incorporated during the year, have subsequently ceased to be subsidiaries and accounted as an âassociateâ

Key Management Personnel -

Mr. V K Jain (Managing Director)

Mr. D K Jain (Non Executive Director)

Mr. P K Jain (Non Executive Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. Anand Bhusari (Whole Time Director)

Mr. Shailendra Swarup (Non Executive Director)

Mr. Om Prakash Lohia (Non Executive Director)

Mr. Deepak Asher (Non Executive Director)

Mr. Shanti Prasad Jain (Non Executive Director)

Mr. Rajagopalan Doraiswami (Non Executive Director)

Ms.Vanita Bhargava (Non Executive Director)

Mr. Chandra Prakash Jain (Non Executive Director)

Relatives of Key Management Personnel -

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

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

Devansh Gases Private Limited Devansh Trademart LLP Inox India Private Limited Inox Air Products Private Limited Inox Chemicals LLP Refron Valves Limited Rajni Farms Private Limited Siddhapavan Trading LLP Siddho Mal Trading LLP Swarup & Company

(C) Guarantees

For Corporate Guarantees given by the Company - see Note 38

(D) Compensation of Key management personnel

The remuneration of directors and Key Management Personnel (KMP) is determined by the Nomination and Remuneration Committee having regard to the performance of individuals and market trends. As the liabilities for the defined benefit plans and other long term benefits are provided on actuarial basis for the Company, the amount pertaining to KMP are not included above.Contribution to Providend Fund (defined contribution plan) is Rs.17.72 Lakhs (previous year Rs.14.71 Lakhs) included in the amount of remuneration reported above.

(E) Professional fees includes payment made to Swarup & Company Rs.25.00 Lakhs (2016-17 : Nil)

Notes

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

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

(c) No expense has been recognised for the year ended 31^st March, 2018 and 31^st March, 2017 for bad or doubtful trade receivables in respect of amounts owed by related parties.

(d) There have been no other guarantees received or provided for any related party receivables or payables.

Note: During the year, to meet the minimum public shareholding requirements by the Companyâs subsidiary Inox Wind Limited (âIWLâ), the âPromoter/Promoter Groupâhave sold, in aggregate, 2,35,61,331 equity shares in IWL through an Offer For Sale (OFS) of shares through the stock exchange. The OFS included sale of 1,35,61,331 equity shares in IWL by GFL as a promoter. The net gain of Rs.15,402.58 Lakhs on sale of these shares by GFL is included in Exceptional Items above.

14. (a) Disclosure as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

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

In respect of related parties:

i) The inter-corporate deposits of Rs.16,249.00 Lakhs (31^st March, 2017: Rs.16,249.00 Lakhs) to Inox Leisure Limited (ILL) are unsecured and given for business purpose. The inter-corporate deposits are repayable in 9 to 11 years from the date of respective inter-corporate deposits and carry interest @ 10% p.a.

(ii) The inter-corporate deposits of Rs.22,700.00 Lakhs (31^st March, 2017: Rs.20,000.00 Lakhs) to IRL are unsecured and given for business purpose. The inter-corporate deposit is repayable at call and carry interest in the range of @ 9.35% p.a. to 10% p.a.

(iii) For Corporate Guarantees given by the Company - see Note 38

15. 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.283.67 Lakhs (31^st March, 2017: Rs.235.72 Lakhs)

(b) Amount spent during the year on:

Mar 31, 2017

Notes:-

a) ICICI Bank Limited:- The foreign currency term loan from ICICI Bank Limited is secured by way of an exclusive first ranking security interest /mortgage /hypothecation on movable and immovable assets including cash flow receivables and escrow account of 14 MW Wind Power Project at Mahidad. Further, the lender has exclusive first and 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.

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

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

d) Axis Bank Limited:- The foreign currency term loan 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 assets 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.

e) DBS Bank Limited:- The foreign currency term loan 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.

f) The Royal Bank of Scotland NV:- The foreign currency buyerâs credit from The Royal Bank of Scotland NV was secured by way of first pari-passu charge in favour of the bank by way of hypothecation over the borrowerâs stock and receivables, both present and future, of the Companyâs unit located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat.

g) HDFC Bank Limited:- The over draft facility from HDFC Bank Limited was secured by first pari-passu charge in favour of the bank by way of hypothecation over the borrowerâs stock and receivables, both present and future, of the Companyâs unit located at Plot No.12-A, GIDC Estate, Village - Dahej, Taluka Vagra, District Bharuch, Gujarat.

1. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt - in respect of claim by a service provider - Rs, 7.22 Lakhs (as at 31^st March, 2016 : Rs, 7.22 Lakhs, as at 1^st April, 2015 : Rs, 7.22 Lakhs ).

b. In respect of Income tax matters - Rs, 27,427.89 Lakhs (as at 31^st March, 2016 : Rs, 8,093.33 Lakhs, as at 1^st April, 2015 : Rs, 8,093.33 Lakhs ).

The Company has received CIT (A) orders for Assessment Year 2008-2009 to A.Y. 2011-2012 wherein 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. 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.

iii. Disallowance u/s 14A in respect of exempt income.

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 year 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, 8,359.20 Lakhs (as at 31^st March, 2016 : Rs, 8,093.33 Lakhs, as at 1^st April, 2015 : Rs, 8,093.33 Lakhs) has been paid in respect of above income tax demands and not charged to the Statement of Profit and Loss.

iv. For the A.Y. 2012-2013, Assessing Officer has made protective disallowance in respect of slump sale transaction and treated the same as income from short term capital gain as per direction given by Dispute Resolution Panel, Mumbai. The total demand as per assessment order is Rs, 19,068.69 lakhs (as at 31^st March, 2016 : Nil, as at 1^st April, 2015 : Nil).

The Company has not accepted the orders of the Assessing Officer and has preferred appeal before ITAT, Ahmedabad.

c. In respect of Service tax matters - Rs, 432.16 Lakhs (as at 31^st March, 2016 : Rs, 580.54 Lakhs, as at 1^st April 2015: Rs, 417.67 Lakhs ). This includes:

i. Amount of Rs, 17.94 Lakhs (as at 31^st March, 2016 : Rs, 573.68 Lakhs, as at 1^st April, 2015 : Rs, 410.83 Lakhs) 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.

ii. Amount of Rs, 414.22 Lakhs (as at 31^st March, 2016 : Nil, as at 1^st April, 2015 : Nil ) in respect of Service tax demand on account of non-payment of Service tax in respect of Import of services relating to supply of intangible services and Storage Warehousing services.

d. In respect of Excise duty matters - Rs, 3,641.43 Lakhs (as at 31^st March, 2016 : Rs, 3,361.39 Lakhs, as at 1^st April, 2015 : Rs, 2,816.65 Lakhs). This includes:

i. Amount of Rs, 2,251.52 Lakhs (as at 31^st March, 2016 : Rs, 2,357.02 Lakhs, as at 1^st April, 2015 : Rs, 2,189.12 Lakhs ) 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.

ii. Amount of Rs, 462.58 Lakhs (as at 31^st March, 2016 : Rs, 155.19 Lakhs, as at 1^st April, 2015 : Nil ) is 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.

iii. Amount of Rs, 927.32 Lakhs (as at 31^st March, 2016 Rs, 849.18 Lakhs, as at 1^st April, 2015 : Rs, 627.53 Lakhs ) 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, 1,170.50 Lakhs (as at 31^st March, 2016: Rs, 1,087.53 Lakhs, as at 1^st April, 2015: Rs, 973.57 Lakhs).

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.

f. In respect of above Service tax, Excise and Customs matters, the Company has paid an amount of Rs, 115.10 Lakhs (as at 31^st March 2016 : Rs, 97.64 Lakhs, as at 1^st April, 2015 : Nil) and not charged to Statement of Profit and Loss.

g. In respect of Sales tax matters - VAT Rs, 62.88 Lakhs (as at 31^st March, 2016 : Rs, 18.00 Lakhs, as at 1^st April, 2015 : Nil) & CST Rs, 49.85 Lakhs (as at 31^st March, 2016 : Rs, 49.33 Lakhs, as at 1^st April, 2015 : Nil).

Company has received VAT & CST assessment order levying VAT demand of Rs, 62.88 Lakhs & CST demand of Rs, 49.58 Lakhs for the F.Y.2011-2012 & F.Y. 2012-2013 respectively. Company has not accepted the Order and has filed appeal before Joint Commissioner of Commercial tax for F.Y. 2011-2012 and is in process of filing appeal with Joint Commissioner of Commercial tax for F.Y. 2012-2013.

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

i. Corporate guarantee given to bank in respect of loan taken by a step-down subsidiary Rs, 6,156.63 Lakhs (as at 31^st March, 2016: Rs, 3,787.62 Lakhs, as at 1^st April, 2015: Rs, 1,062.50 Lakhs ) - equivalent to USD 9.49 million (as at 31^st March, 2016 : USD 5.72 million, as at 31^st March, 2015 : USD 1.70 million).

2. Commitments:

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs, 11,641.74 Lakhs (as at 31^st March, 2016 : Rs, 8,488.73 Lakhs, as at 31^st March, 2015: Rs, 9,829.64 Lakhs).

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 and /or for working capital.

b) The Company has provided an undertaking to one of the lenders of its step-down subsidiary Inox Renewables (Jaisalmer) 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.

3. Segment information

Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on single business segment of âChemicalsâ -comprising of Refrigerant Gases, Anhydrous Hydrochloric Acid, Caustic-Chlorine, chloromethane, PTFE and PT-PTFE. Electricity generated by captive power plant is consumed in chemical business and not sold outside.Hence the Company is having only one reportable business segment under Ind AS 108 on âOperating segment . The information is further analysed based on the different classes of products.

b) Interest in land taken on lease and classified as operating lease:

The leasehold land are generally taken for the period of 83 to 99 years. The entire lease premium is already paid and future rentals are nominal. Amortization of such lease payments is included in âRentâ in Statement of Profit and Loss and the balance remaining amount to be amortized is included in balance sheet as Prepayments Leasehold land .

4 As a Less or

General description of operating Lease

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

Rental Income earned by the Company from its Investment Properties and direct operating expenses arising on the investment properties for the year are set out in Note 29 and Note 36 respectively.

5 Employee Benefits:

(a) Defined Contribution Plans

The Company contributes to the Government managed provident & pension fund for all qualifying employees.

Contribution to Provident fund of '' 495.74 Lakhs (31^st March, 2016: '' 412.26 Lakhs) is recognized as an expense and included in Contribution to Provident & Other fundsâ in the Statement of Profit and Loss.

(b) Defined Benefit Plans:

The company has defined benefit plan for payment of gratuity to all qualifying employees. It is governed by the payment of Gratuity Act,1972. Under this Act, an employee who has completed five years of service is entitled to the specified benefit. The level of benefits provided depends on the employeeâs length of services and salary at retirement age. The companyâs defined benefit plan is unfunded.

There are no other post retirement benefits provided by the company.

The most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31^st March, 2017 by Mr. G N Agarwal, fellow member of the institute of the Actuaries of India. The present value of the defined benefit obligation, the related current service cost and past service cost, were measured using the projected unit credit method

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

These plans typically expose the company to actuarial risks such as interest rate risk and salary risk

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

(iv) Sensitivity Analysis

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the defined benefits plan obligation at the end of the reporting period is 12.55 years

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

Annual leave and short term leave

The liability towards compensated absences (annual and short term leave) for the year ended 31^st March, 2017 based on actuarial valuation carried out by using Projected Accrued Benefit method resulted in increase in liability by Rs, 224.68 lakhs (31st March, 2016: Rs, 170.40 lakhs), which is included in the employee benefits in the Statement of Profit and Loss.

6. Financial Instruments:

7 Capital Management

The Company manages its capital structure with a view that it will be able to continue as going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance

The capital structure of Company consists of net debt (borrowings as detailed in Note 20 and Note 24 offset by cash and bank balance) and total equity of the Company.

The Company is not subject to any externally imposed capital requirement. However, under the terms of the major borrowings the Company is required to keep the gearing ratio of debt to equity not more than 300% and the ratio of debt to EBITDA must not be more than 300%. The Company has complied with these covenants throughout the reporting period. As at 31^st March, 2017, the ratio of debt to EBITDA is 211% (31^st March, 2016 was 176%)

The Companyâs risk management committee reviews the capital structure of the Company on annual basis. As part of this review, committee considers the cost of capital and risk associated with each class of capital. The Company has a target gearing ratio of less than 100 % determined as the proportion of net debt to equity.

The carrying amount reflected above represents the entityâs maximum exposure to credit risk for such financial assets.

8 Financial risk management objectives

The Company seeks to minimize the effects of currency and interest rate risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Companyâs policies approved by the Board, which provide principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments and the investment of the excess liquidity. Compliance with policies and exposure limits is reviewed by the Internal auditor on a continuous basis. The Company doesnât enter into or trade financial instruments including derivative financial instruments for speculative purpose.

9 Market Risk

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

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

10 Foreign Currency Risk Management

The Company is subject to the risk that changes in foreign currency values impact the Company exports revenue, imports of material/capital goods, services/royalty etc and borrowings exchange rate exposures are managed within approved policy parameters by entering in to foreign currency forward contracts, options and swaps.

Foreign exchange transactions are covered with in limits placed on the amount of uncovered exposure, if any, at any point in time. The aim of the Companyâs approach to management of currency risk is to leave the Company with no material residual risk.

The carrying amount of unhedged foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follow:

11 Foreign Currency Sensitivity Analysis

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

The following table details the Companyâs sensitivity to a 10% increase and decrease in the Rupees against the relevant foreign currencies.10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes unhedged external loans, receivables and payables in currency other than the functional currency of the Company.

12 Interest Rate Risk Management

Interest rate risk refers to the possibility that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rate. The Company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

13. Interest Rate Sensitivity Analysis

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

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Companyâs profit for the year ended 31^st March, 2017 would decrease/increase by INR 8.13 Lakhs (net of tax) (for the year ended 31^st March, 2016 decrease/increase by INR 11.33 Lakhs(net of tax)). This is mainly attributable to the Companyâs exposure to interest rates on its variable rate borrowings.

14.Interest Rate Swap Contracts

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

The line items in the Standalone Balance sheet that include the above hedging instruments is âother financial assets" and âother financial liabilitiesâ

15.Other price risks

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and mutual funds. The company is exposed to equity price risks arising from equity investments. Equity investments in subsidiaries and Joint Ventures are held for strategic rather than trading purposes. The Group does not actively trade these investments. The Company is also exposed to price risk arising from investments in debt and arbitrage mutual funds, but these being debt instruments, the exposure to risk of changes in market rates is minimal.

16.Equity Price Sensitivity Analysis

If equity prices had been 5% higher/lower, profit for the year ended 31^st March, 2017 would increase/ decrease by Rs, 398.37 Lakhs (for the year ended 31^st March, 2016: increase / decrease by Rs, 88.99 Lakhs) as a result of the change in fair value of equity investments which are designated as FVTPL.

17. Credit Risk Management

a) Trade receivables

Credit risk arising from trade receivables is managed in accordance with the Companyâs established policy, procedures and control relating to customer credit risk management. The average credit period on sales of products is less than 90 days. The concentration of credit risk is limited due to the fact that the customer base is large and diverse. There is no external customer representing more than 10% of the total balance of trade receivables. All trade receivables are reviewed and assessed for default on a quarterly basis.

b) Loans and other receivables

12-month ECL are a portion of the lifetime ECL which result from default events that are possible within 12 months from the reporting date. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/expense in the Statement of Profit and Loss under the head âOther expensesâ.

c) Other financial assets

Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the various credit rating agencies.

18. Liquidity Risk Management

19. Liquidity risk table

20. Related Party Disclosures

(A) Where control exists:

Holding company -

Inox Leasing and Finance Limited

Subsidiary companies -

Inox Leisure Limited (ILL)

Inox Wind Limited (IWL)

Inox Renewables Limited (IRL)

Inox Infrastructure Limited

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

Gujarat Fluorochemicals GmbH, Germany Gujarat Fluorochemicals Singapore Pte. Limited

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

Sarayu Wind Power (Kondapuram) Private Limited-Subsidiary of IWISL w.e.f from 25^th March, 2016. Sarayu Wind Power (Tallimadugula) Pvt. Ltd-Subsidiary of IWISL w.e.f from 09^th December, 2015 Vinirrmaa Energy Generation Pvt. Ltd-Subsidiary of IWISL w.e.f from 23^rdJanuary, 2016.

Satviki Energy Private Limited-Subsidiary of IWISL w.e.f from 19^th November, 2015 RBRL Investments Limited (w.e.f 30^th August 2016)

Inox Renewables (Jaisalmer) Limited- Subsidiary of IRL

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

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

XuanchengHengyuan Chemical Technology Co. Ltd (XHCT Co. Ltd) upto 07^th September, 2016 Swarnim Gujarat Fluorspar Private Limited

Key Management Personnel -

Mr. V K Jain (Managing Director)

Mr. D K Jain (Non Executive Director)

Mr. P K Jain (Non Executive Director)

Mr. D K Sachdeva (Whole Time Director)

Mr. J.S.Bedi (Whole Time Director) upto 28^th April, 2015

Mr. Anand Bhusari (Whole Time Director) w.e.f. from 28^th April, 2015

Mr. Shailendra Swarup (Non Executive Director)

Mr. Om Prakash Lohia (Non Executive Director)

Mr. Deepak Asher (Non Executive Director)

Mr. Shanti Prasad Jain (Non Executive Director)

Mr. Rajagopalan Doraiswami (Non Executive Director)

Ms. Vanita Bhargava (Non Executive Director)

Mr. Chandra Prakash Jain (Non Executive Director)

Relatives of Key Management Personnel -

Mr. Devansh Jain (Son of Mr. 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)

(ii) The inter-corporate deposits of Rs, 20,000.00 Lakhs (31^st March, 2016: Nil,1^st April, 2015: Nil) to IRL are unsecured and given for business purpose. The inter-corporate deposit is repayable in 363 days from the date of inter-corporate deposit and carry interest @ 9.35% p.a.

(iii) 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, 6,156.63 Lakhs (31^st March, 2016: Rs, 3,787.62 Lakhs, 1^st April, 2015: Rs, 1,062.50 Lakhs) - equivalent to USD 9.49 million (31^st March, 2016: USD 5.72 million, 1^st April, 2015: USD 1.70 million).

The basic and diluted EPS for the year 2015-2016 is reduced by Rs, 1.31 per share of Rs, 1 each on account of above.

* For the purposes of this clause, the term âSpecified Bank Notesâ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8^th November, 2016

21. First-time adoption of Ind AS

For all periods up to and including the year ended 31^st March, 2016, the Company had prepared its financial statements in accordance with the accounting standards notified under section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (previous GAAP).

This note explains the principal adjustments made by the Company in restating its financial statements prepared under previous GAAP.

The exemptions allowed by Ind AS 101 and availed by the Company are set out in Note 4.

22. Footnotes for IGAAP to Ind AS reconciliation

a) Reclassification of Investment Property from Property, Plant & Equipment:

Under previous GAAP, there were no requirement to present investment property separately and the same was included under tangible assets and measured at cost. Under IndAS, investment property is required to be presented separately in the balance sheet and continued to be measured at cost.

Consequent to this change, Rs, 1,095.81 Lakhs is transferred from property, plant and equipment to Investment property as at 31^st March, 2016 (Rs, 1,117.08 Lakhs as at 1^st April, 2015).

b) Reclassification of Leasehold Land:

Under previous GAAP, all leasehold lands were classified as property, plant and equipment. Under Ind AS, leasehold land is to be recognized as an operating or a finance lease as per the definition and classification criteria under Ind AS 17. Accordingly deemed cost of the leasehold lands are reclassified from property plant and equipment and disclosed as leases prepayments under non-financial assets.

Consequent to this change, amount of Rs, 4,385.73 lakhs is transferred from property, plant and equipment to âpre-payments - leasehold landsâ as at 31^st March, 2016 (Rs, 4,434.05 lakhs as at 1^st April 2015)

The above changes do not affect total equity as at date of transition to Ind AS and as at 31^st March, 2016 and the profit before tax and profit for the year ended 31^st March, 2016.

c) Investments:

(i) Non-Current:

In the financial statements prepared under previous GAAP, non-current investments of the Company were measured at cost less provision for diminution (other than temporary). Under Ind AS, the Company has recognized such investments as follows:

- Equity shares of subsidiary and joint venture company - at cost

- Investments in Equity Instruments - at fair value

- Investments in Mutual Funds - at fair value

The company has opted to fair value the investments in Xuancheng Hengyuan Chemical Technology Co. Ltd (XHCT Co. Ltd), a Joint Venture Entity on the date of transition and take the same fair value as deemed cost for subsequent period as per the option available in Ind AS 101.

On the date of transition to Ind AS, the difference between the fair value of non-current investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous

GAAP, has resulted in decrease in the carrying amount of these investments by Rs, 582.70 lakhs which has been recognized in retained earnings. As at 31^st March, 2016, the difference between the fair value of noncurrent investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in increase in the carrying amount of these investments by Rs, 288.68 lakhs.

During the year ended 31^st March, 2016, net gain amounting to '' 871.38 lakhs on such fair valuation is recognized in the Statement of Profit and Loss as other income.

(ii) Current:

In the financial statements prepared under previous GAAP, current investments of the Company were measured at lower of cost and fair value. Under Ind AS, the Company has recognized such investments as follows:

- Investments in Venture Capital Funds - at fair value

- Investments in Mutual Funds - at fair value

On the date of transition to Ind AS, the difference between the fair value of current investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in decrease in the carrying amount of these investments by Rs, 109.39 lakhs which has been recognized in retained earnings. As at 31^st March, 2016, the difference between the fair value of current investments as per Ind AS and their corresponding carrying amount as per financial statements prepared under previous GAAP, has resulted in decrease in the carrying amount of these investments by Rs, 253.51 lakhs.

During the year ended 31^st March, 2016, net loss amounting to Rs, 144.13 lakhs on such fair valuation is recognized in the Statement of Profit and Loss as other income.

d) Derivative Financial Instruments:

Under previous GAAP, derivative forward contracts were accounted as per AS 11. However, the same are classified as Financial Assets or Financial Liabilities as per Ind AS 109 and measured at fair value. The Company has reversed the impact of AS 11 on the date of transition and has restated those contracts at fair value on the date of transition and the gain or loss on the same has been adjusted in the Retained Earnings.

Consequent to this change, derivative financial assets were created amounting to Rs, 645.65 Lakhs as on 31^st March, 2016 (Rs, 2,629.37 Lakhs as on 1^st April, 2015).

During the year ended 31^st March, 2016, net gain amounting to Rs, 6.60 lakhs on such fair valuation is recognized in the Statement of Profit and Loss as other income.

As per the requirements of Ind AS 109, the Company has accounted gain/(loss) on account of fair valuation of financial instruments under cash flow hedge in Other Comprehensive Income (OCI). In previous GAAP, the same were accounted in Hedge Reserve. Accordingly Rs, 189.28 Lakhs were accounted in other comprehensive income during the year ended 31^st March, 2016.

e) Expected credit losses:

Under previous GAAP, the Company had created provision for impairment of receivables and deposits only in respect of specific amount for doubtful receivables. Under Ind AS, additional impairment allowance has been determined based on Expected Credit Loss (ECL) model.

Consequent to this change, on the date of transition to Ind AS, allowance for ECL of Rs, 762.90 lakhs (i.e. ECL of Rs, 62.90 lakhs on trade receivable and Rs, 700.00 lakhs on Inter-corporate deposit (ICD)) and reversal of accrued interest on ICD of Rs, 147.75 lakhs is recognized with corresponding reduction in the retained earnings.

The amount of allowance for ECL on trade receivables & ICD and reversal of interest on ICD recognized as at 31^st March, 2016 is Rs, 982.07 lakhs.

The profit before tax for the year ended 31^st March, 2016 is decreased by Rs, 71.42 lakhs on account of allowance for ECL.

f) Premium Payable on Option Contract:

On transition to Ind AS i.e. on 1^st April, 2015 the Company has provided for the outstanding Option Premium Liability, the other impact is being given in the opening reserves as per the requirements of Ind AS 109. The same was accounted as finance cost under previous GAAP and the Company used to charge the same when the banks are actually debiting the amount from the account of the Company.

Consequent to this change, premium payable on option contract was recognized amounting to Rs, 747.12 Lakhs as on 31^st March, 2016 (Rs, 968.87 Lakhs as on 1^st April, 2015)

The profit before tax for the year ended 31^st March, 2016 is increased by Rs, 221.76 lakhs due to reversal of finance cost.

g) Declaration of Dividend:

Under previous GAAP, dividends on equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognized in the financial statements as a liability. Under IndAS, such dividends are now recognized when declared by the members in annual general meeting.

Consequent to this change, on the date of transition to Ind AS, provision for dividend including dividend distribution tax amounting to Rs, 4,627.45 Lakhs is reversed with corresponding increase in the retained earnings. Same is recognized in FY 2015-2016 with corresponding reduction in retained earnings.

h) Remeasurement of defined benefit plan:

In the financial statements prepared under previous GAAP, remeasurement of defined benefit plans and assets (gratuity), arising due to change in actuarial assumptions was recognized as employee benefits expense in the Statement of Profit and Loss. Under Ind AS, such remeasurement benefit relating to defined benefit plans and assets is recognized in OCI as per the requirements of Ind AS 19- Employee benefits. Consequently, the related tax effect of the same has also been recognized in OCI.

For the year ended 31^st March, 2016, remeasurement of gratuity liability resulted in a net gain of Rs, 11.36 lakhs which has now been removed from employee benefits expense in the Statement of Profit and Loss and recognized separately in OCI.

The above changes do not affect total equity as at date of transition to Ind AS and as at 31^st March, 2016.

i) Deferred Tax

In the financial statements prepared under previous GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/liability on timing differences between taxable profit and accounting profit. Under Ind AS, deferred tax is accounted as per the Balance sheet approach which requires creation of deferred tax asset/liability on temporary differences between the carrying amount of an asset/liability in the Balance Sheet and its corresponding tax base.

The application of Ind AS has resulted in recognition of deferred tax on new temporary differences which were not required to be recognized under previous GAAP. In addition, the transitional adjustments as described in the preceding paragraphs have also led to temporary differences and creation of deferred tax thereon.

This has resulted in creation of net deferred tax assets of Rs, 126.44 lakhs as at date of transition to Ind AS with a corresponding increase in retained earnings and reduction in the amount of deferred tax liabilities in the Balance Sheet.

For the year ended 31^st March, 2016, it has resulted in increase in deferred tax expense by Rs, 313.98 lakhs in the Statement of Profit and Loss and recognition of deferred tax benefit of Rs, 61.58 lakhs in OCI.

j) Prior period items:

Reversal of legal and professional expense of Rs, 311.18 Lakhs and electricity duty refund of Rs, 1,122.90 lakhs which was included in âOther Expensesâ during the year ended 31^st March, 2017, is now charged to Statement of Profit and Loss during the year ended 31^st March, 2016 with corresponding effect in the carrying amount of capital advance and electricity duty refund receivable respectively.

k) Other Comprehensive Income:

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

This change does not affect total equity as at date of transition to Ind AS and as at 31^st March, 2016.

l) Excise duty:

In the financial statements prepared under previous GAAP, revenue from sale of products was presented net of excise duty. However, under Ind AS, revenue from sale of products includes excise duty.

Consequently, the revenue from sale of products for the year ended 31^st March, 2016 includes excise duty Rs, 10,082.03 lakhs with a corresponding excise duty expense presented separately on the face of the Statement of Profit and Loss.

The above changes do not affect profit for the year ended 31^st March, 2016 and total equity as at date of transition to Ind AS and as at 31^st March, 2016.

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 1^st 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 1^st 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 15^th 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 15^th 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. 18^th 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 15^th 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. 18^th 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 20^th 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 14^th 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 31^st 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 31^st December, 2015 are as under:

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

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

d) The Companyâs 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 31^st 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 Companyâs share of capital commitments in the JVC as at 31^st March, 2016 is Rs, Nil (previous year Rs, Nil)

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

d) The Companyâs 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. 8^th August, 2014)

Shouri Properties Private Limited - Subsidiary of ILL w.e.f. 24^th 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. 19^th November 2015

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

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

Sarayu Wind Power (Kondapuram) Private Limited - Subsidiary of IWISL w.e.f. 25^th 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 28^th April, 2015 Mr. Paresh Trivedi (Whole Time Director) - upto 27^th June, 2014 Mr. Anand Bhusari (Whole Time Director) w.e.f. 28^th 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 31^st 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 Â 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 Â 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 Â 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 Â 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 Â in respect of claim by a service provider - Rs. 7.22 Lakh (previous year Rs. 7.22 Lakh):

b) Income tax demands Â 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 Â 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 Â 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 Â 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 Â 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 Â amount is not ascertainable

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

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 Â

Inox Leasing and Finance Limited

Subsidiary Companies Â

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 ÂSubsidiary of Inox Lesisure Limited (w.e.f. 8th August, 2014)

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

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

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

Key Management Personnel Â

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 Â

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 Â

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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