Notes to Accounts of Gujarat Mineral Development Corporation Ltd.

Mar 31, 2023

2.05.01 Investments measured at fair value through Other Comprehensive Income (FVTOCI) reflect investments in unquoted and quoted equity securities except investment in the shares of Gujarat State Financial Corporation which is measured at cost and provision for impairment is made for the same as above. Refer Note 2.45 for determination of their fair values.

2.05.02 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 lakh number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by the Company from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to repurchase the above shares and the Company shall hold these shares as investment. The Board of Directors of the Company and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The remaining 25.45 lakh shares of GACL as shown in above note have been purchased by the Company from the open market.

2.06.01 Naini Coal Company Ltd. is a 50:50 joint venture of the Company and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given Bank Guarantee of '' 6,500 lakh to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Odisha. The said bank guarantee was secured by Corporate Guarantee of the Company for an amount of '' 3,250 lakh and another '' 3,250 lakh was secured by Bank Guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. '' 3,250 lakh given by the Naini Coal Company Ltd. vide their letter dated 27th December, 2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. The Company had discharged its liability of '' 1,625 lakh towards invoked Bank Guarantee and has accounted for the same as advance to Naini Coal Company Ltd. Total provision for impairment made for advances to Naini Coal Company Ltd. amounts to '' 1,625 lakh (2021-22: '' 1,625 lakh).

The Company filed special civil application before the Hon''ble High Court of Gujarat against arbitrary cancellation of coal block as well as invocation of Bank Guarantee. During the pendency of petition before the Hon''ble High Court of Gujarat, the Hon''ble Supreme Court has cancelled all the coal blocks. Therefore, the petition with the Hon''ble High Court of Gujarat was pending in respect of invocation of Bank Guarantee of '' 1,625 lakh only. The Hon''ble High Court of Gujarat vide its judgement and order dated 31st July, 2019 has rejected the relief sought by the Company for seeking refund of Bank Guarantee.

In view thereof the company has preferred civil suit before Ld. Small Cause Court, Ahmedabad for recovery of '' 1,625 lakh given as Bank Guarantee. After filing the Suit before the civil court it was necessary to conduct mediation under section 89 of the Civil Procedure Code, 1908. Accordingly, the Court issued notice to all the parties to the suit to remain present for mediation process on 27th January, 2021. However, none other than GMDC attended the said proceeding therefore the mediation proceedings have been declared failed and the suit has been transferred to regular board of Small Cause Court, Ahmedabad for hearing on merits. Now the matter is pending for adjudication.

2.07.02 As per the Mine Closure Guidelines (MCG), the amount is required to be deposited in Escrow Account with a scheduled bank. The Company has opened the Escrow accounts for its all six lignite mines and deposited the amount.

Panandhro Mine is having lease area of 1,151 hectares and 568 hectares. In respect of lease area of 1,151 hectares, the company has deposited an amount of '' 9,600 lakh in escrow account as per calculation accepted by the Office of the Coal Controller of India as against provision of '' 11,399.20 lakh as per draft mine closure plan. Necessary effect in the provision for mine closure will be given in the books of account after the acceptance of mine closure plan of the said mine by the Ministry of Coal, Government of India.

In respect of lease area of 568 hectares, the life of mine was over in March 2007. As lignite was exhausted, the last production of lignite was done therein in March 2007. It was last done more than two years before the Mine Closure Guidelines, 2009 which came into force w.e.f. 27th August, 2009. Mine closure activities are also almost over in the said lease area.

In the MCG there was a clause for deposition of funds for mine closure in the escrow account at the prescribed rates. However, there was no provision in the MCG to apply them with retrospective date. Therefore, the MCG are not applicable in respect of 568 hectares lease area. Hence, the same has not been provided and deposited.

2.07.03 As per the technical certificate the company has carried out mine closure activities and incurred expenses during the year as per mine plan in respect of all the metallic-ferrous(non-lignite) mines either departmentally or through outside agencies and compliances are verified periodically by IBM authorities mandated by the Government of India.

2.11.01 Other bank balances include restricted bank balances on account of Unpaid dividend, Fixed deposits for Security against borrowings (overdraft facility), Security against guarantees and Security against other commitments as stated above.

Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, was not executed and an amount of '' 24.92 lakh (31st March, 2022: '' 24.92 lakh) was recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to depoit the said amount with a nationalised bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly, the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

2.13.01 The company has paid in May 2015 an amount of '' 37.50 lakh for 3.75 lakh shares of '' 10 each to Stone Research Foundation to subscribe its shares which is included under the head "Others" above. However, no shares have been allotted by the said company so far and it has been decided to close the Stone Research Foundation. Necessary adjustments in accounts will be made after receiving share application money and other receivables, if any.

2.13.02 In order to expand the area of operations and exploring mineral resources in mangnese in the allotted areas of operations a Memorandum of Understanding has been executed between the company and MOIL Ltd. on 1st October, 2019.

The work of geo hydrological, geo technical and other related scientific studies are under progress. If project is feasible for both the entities, a Joint Venture Company (JVC) will be formed between GMDC and MOIL with shareholding of 49% and 51% respectively. If JVC is formed, expenditure incurred before JVC formation by both the companies shall be considered as their investment in JVC. Pending such conversion, expenditure incurred so far will be shared by MOIL and GMDC in equal proportion. The company’s share therein has been shown above under the head “Advance to others".

2.15.01 Assets classified as held for sale during the reporting period were measured at the carrying value on the date of such classification which approximates fair value less cost to sell. Consequently, no impairment loss was identified on these assets. There has been no material change in the value of such assets after the date of initial classification as assets classified as held for sale.

2.16.02 Rights, preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a face value of '' 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

In respect of the Financial Year 2021-22 dividend of '' 4.30 per share was proposed and approved. The same was recognised as distributions to equity shareholders during the year ended 31st March, 2023 (31st March 2022: '' 0.20 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.19.02 As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India the Company has made a provision for mine closure expenses to the tune of '' 58,292.99 lakh (31st March, 2022: '' 60,380.42 lakh) after considering the approved, submitted, prepared mine closure plans and has incurred progressive mine closure expenses of '' 10,943.35 lakh (31st March, 2022: '' 15,022.46 lakh) so far. During the year, expenses reversed on reimbursement by Coal Controller of India from Esrow accounts amounting to '' 5,897.56 lakh.

2.23.01 Vide Government Resolution dated 19th November, 2009, the Company has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose of the same for which the Company will be entitled to retain 20% of the sale price. The Company has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, '' 578.99 lakh (31st March, 2022: '' 565.12 lakh) (i.e. 80% of the basic sale price) has been transferred during the year to GMRDS and included under the head "Other Financial Liabilities".

2.25.01 The Government of Gujarat (GoG) has provided funds amounting to '' 4,547.66 lakh (31st March, 2022: '' 4,357.66 lakh) which are in the nature of deposits for Construction and other expenses for Stone Park and Laboratory on behalf of Commissioner of Geology & Mining (CGM), GoG. Out of the said deposits, the Company has utilised '' 4,428.44 lakh (31st March, 2022: '' 4,185.84 lakh) till 31st March, 2023. Net balance of unutilised funds amounting to '' 119.22 lakh (31st March, 2022:'' 171.82 lakh) is shown under the head "Other Current Liabilities".

2.26.01 The Company is selling lignite/power to Gujarat State Electricity Corporation Limited (GSECL) / Gujarat Urja Vikas Nigam Limited (GUVNL). For arriving at the rate of lignite to be charged in the invoice for the sale of such lignite/power by charging rate of interest of 13% on the fixed assets of the respective project for deciding the cost of lignite as per the agreed formula up to 31st March, 2022. Accordingly, the company has recognised the revenue on such sale. However, w.e.f. 1st July, 2017, while making the payment GSECL/GUVNL are allowing the rate of interest of 8.50% only instead of 13%.Amount receivable thereagainst is '' 1,027.02 lakh (31st March, 2022: '' 1,027.02 lakh). The matter is under correspondence with the said companies. Necessary adjustment entries, if any, will be passed after the matter is finally decided.

During the year the Government of Gujarat (GoG) has changed the formula (including rate of interest on fixed assets) for arriving at the rate of lignite to be charged in the invoice for the sale of such lignite/power to GSECL/ GUVNL acceptable to all parties effective from 1st April, 2022. The company has raised debit notes aggregating to '' 4,584.22 lakh for the same.

2.27.01 During the year, the company earned an interest of '' 4,178.73 lakh (2021-22: '' 3,680.30 lakh) on the fixed deposits of '' 76,595.09 lakh (31st March, 2022: '' 76,988.30 lakh) held in the escrow accounts for mine closure expenses and recognised such interest as income in the Statement of Profit and Loss. The interest income so earned is a part of escrow account over which the company has no hold until the provisions of mine closure plan are complied.

As per prevailing guidelines of Ministry of Coal, Govt of India, up to 50% of the total deposited amount including interest accrued in the escrow account would be released to the company after every five years in proportion to the expenditure incurred on mine closure and the balance will be released at the end of final mine closure on compliance of all the provisions of mine closure plan, provided that restoration of mine is completed within the specified period, failing which the amount in the escrow account is liable to be forfeited.

2.27.02 Interest Income from Others includes Interest on Income Tax amounting '' 18,147.02 lakh (2021-22: '' Nil).

2.32.01 During the year, royalty on account of sale of Bauxite had been accounted for '' 2,535.26 lakh (2021-22: '' 1,423.89 lakh) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome ofthe matter.

2.32.02 In view of the Supreme Court’s decision in respect of mining activities, applications made by the Company for renewal of leases covering 2,040 (2021-22: 2,040) hectares of land at Panandhro lignite mine for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalisation of renewal applications.

2.32.03 During the year, the Company has written off '' 1.12 lakh (2021-22: '' 3.68 lakh) and written back '' 1.33 lakh (2021-22: '' 4.15 lakh) in the books of account. In the opinion of the management, such amounts are no longer receivable / payable. Net effect thereof is written off/(back) to the Statement of Profit and Loss amounting to ''(0.21) lakh (2021-22: '' (0.47) lakh).

2.32.04 In compliance with Section 135(5) of the amended Companies Act, 2013, the Company has spent '' 1,200.00 lakh (2021-22: '' 785.00 lakh) against the minimum statutory requirement of spending '' 696.42 lakh (2021-22: '' 609.05 lakh) (based on average net profits of last 3 years) during the year towards Corporate Social Responsibility (CSR) Expense.

2.33.01 Short Provision for Tax of Earlier years : During the year, the company has written back/(off) the difference between the provision for income tax as per books of account and income tax payable on taxable income as per income tax returns filed for earlier years amounting to '' 1,663.99 lakh (2021-22: '' 675.96 lakh) and the same has been disclosed in the Statement of Profit and Loss Account as Short Provision for Tax of Earlier years.

2.36 LEASES (Ind AS 116)

The Company has adopted Ind AS 116 ‘Leases'', effective from 1st April, 2019, using modified retrospective approach.

The Company as a lessee

The Company used a number of practical expedients summarised here below:

1) Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

2) Applied the exemption not to recognise right-of-use assets and liabilities for leases of low value assets.

2.37 CONTINGENT LIABILITIES
Contingent liabilities not provided for Claims against the Company not acknowledged as debt		('' in Lakh)
S.r Particulars No.	As at 31st March, 2023	As at 31st March, 2022
1 Income Tax	23,221.68	37,554.57
2 Sales Tax/VAT	425.45	419.04
3 Excise & Service Tax	1,581.71	1,601.13
4 Related to contractors, land compensation and others	84,874.99	56,654.72
5 Royalty, stamp duty, conversion tax and other Government levies etc.	6,275.32	6,275.32
6 Incentives to employees	1,158.84	1,158.84
Total Contingent Liabilities	1,17,537.99	1,03,663.62

2.37.01 The company is a sole merchant seller of Lignite in the State of Gujarat. Lignite was exhausted in the Panandhro mines in April 2018. Prior to that production from Panandhro mines was inadequate to meet the needs of the power plants of the company and GSECL as well as demand of the customers of Kutch region.

Apart from power plants, the company has also to cater to the fuel needs of Micro, Small, Medium and Large enterprises, therefore, it was inevitable in the larger public interest to increase lignite production in Kutch Region i.e. from Mata No Madh and Umarsar mines above its specified annual lignite production capacity for which the concurrence of Board has been accorded and the Government of Gujarat has been intimated to enhance the Annual Lignite Production Capacity. Liability in this regard, if any, cannot be ascertained at this stage. Necessary adjustment entries, if any, will be passed after the final outcome of the matter.

2.38 COMMITMENTS		('' in Lakh)
Sr	As at	As at
HjQ Particulars	31st March, 2023	31st March, 2022
A Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for	746.09	676.46

B Other Commitments

The company had participated in the auction of coal and lignite blocks announced by the Ministry of Coal, Govt of India, vide the auction under 16th tranche of CM (SP) Act, 2015 and 6th tranche of MMDR Act, 1957. The company has been declared as the preferred bidder for two nos. of Coal mines named as Burapahar and Baitarani West both are located in the state of Odisha in the month of March 2023. Agreement with Ministry of Coal, Govt of India has been signed on 29th March 2023 and the Company has given an irrevocable and unconditional bank guarantees amounting to '' 1,63,693.73 lakh for the performance of its obligations. In addition to this, the company has committed to pay '' 79,925.75 lakh and '' 7,179.97 lakh as upfront fee and fixed fee respectively in respect of the above mentioned two coal mines.

2.39 EVENTS OCCURRING AFTER THE REPORTING PERIOD

The board has recommended dividend of '' 11.45 per share which is subject to approval of shareholders in the ensuing general meeting.

2.40 In the opinion of Management, any of the assets other than items of property, plant and equipment, investment properties, intangible assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

2.41 Balances of trade payables, trade receivables, loans & advances, advances from customers, other non-current/current liabilities, etc. are subject to confirmation and adjustments, if any, in the accounts.

2.42 On periodical basis and as and when required, the company reviews the carrying amounts of its assets. During the year 2020-21, the company had booked an impairment loss of '' 39,659.49 lakh for Akrimota Thermal Power Station (ATPS).Considering the Plant Load Factor (PLF) of only around 27% and 38% in the year 2021-22 and 2022-23 respectively as against around 19.87% in the year 2020-21, review for possible reversal of impairment in ATPS has not been considered in the current year. However, such review for possible reversal of impairment will be considered after perusal of the financial implication of Power Purchase Agreement (PPA) between the company and GUVNL which is under approval of Gujarat Electricity Regulatory Commission (GERC).

2.43 SEGMENT INFORMATION

(a) Description of segment and principal activities

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment, and accordingly, the Company has identified two reportable operating segments viz. Mining and Power. Operating segments have been identified and reported in a manner consistent with the internal reporting provided to the CODM.

(b) Segment revenue and expenses

Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on a reasonable basis have been disclosed as "Unallocated".

(c) Segment assets and liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as "Unallocated".

(d) Secondary segment reporting

The Company does not have geographical distribution of revenue as the operations of the Company are carried out within the country and hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

(e) Information about major customers

Revenue from power segment (which exceeds 10% of total segment revenue) amounting to '' 34,644.85 lakh (2021-22: '' 27,704.46 lakh) is derived from a single customer and revenue from mining segment (which exceeds 10% of total segment revenue) amounting to '' 27,069.63 lakh (2021-22: '' 13,406.64 lakh) (inclusive of tax) is derived from a single customer.

(f) Information about product and services

The Company''s revenue from external customers for each product is the same as disclosed below under "segment revenue".

1. The above compensation has been paid to Directors, Chief General Manager & Chief Financial Officer and Company Secretary as Key Managerial Personnel.

2. In the last year, the figures of Post-employment benefits and Long-term employee benefits shown in the financial statements were cumulative up to FY 2021-22, instead of respective financial years, therefore, the same have been modified during the year to make them comparable with figures of FY 2022-23.

3. Directors'' sitting Fees includes taxes, wherever applicable. Further, directors'' sitting fees in respect of Government nominated directors are deposited directly into Government Treasury.

2.44.05 Other transactions with Government related entities

Apart from the above transactions, the Company has also entered into other transactions in ordinary course of business with Government related entities. These are transacted at arm''s-length prices based on the agreed contractual terms.

2.44.06 Further, the Company has entered into various long-term material supply and Power Purchase Agreements with the related parties (including Government related entities) where goods/services are to be provided at prices determined based on the contractual terms agreed. Some of the contracts are in the process of being finalised pending the necessary approvals.

Types of inputs are as under:

Input Level I (Directly Observable) which includes quoted prices in active markets for identical assets such as quoted price for an

equity security on Security Exchanges

Input Level II (Indirectly Observable) which includes prices in active markets for similar assets such as quoted price for similar assets in active markets, valuation multiple derived from prices in observed transactions involving similar businesses etc.

Input Level III (Unobservable) which includes management''s own assumptions for arriving at a fair value such as projected cash flows used to value a business etc.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

As per the accounting policy of the company on Equity Instruments, all equity instruments in the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at Fair Value Through Profit or Loss (FVTPL). For all other equity instruments, the company has the option to make an irrevocable election on initial recognition, on an instrument-byinstrument basis, to present changes in fair value through Other Comprehensive Income (OCI) rather than through profit or loss. The option to present changes in Fair Value Through Other Comprehensive Income (FVTOCI) is available only at the time of initial recognition. Accordingly, the company has elected to measure its equity instruments through FVTOCI.

B. Measurement offair values

i) Valuation techniques and significant unobservable inputs

The following are the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Financial instruments measured at fair value FVTOCI in unquoted equity shares:

Gujarat State Petroleum Corporation Limited

1. Market Approach: This approach uses information generated by market transactions of the Company being valued or the transactions of comparable companies. The following market-linked information may be used for determining valuation under this approach.

- Quoted price of the company being valued,

- Past transaction value of the company being valued,

- Listed comparable companies'' trading multiples like price to earning ratio, enterprise value to earning before interest, tax, depreciation and amortisation, enterprise value to sales etc.

- Transactions multiples for investment / M & A transaction of comparable companies.

The valuation arrived at based on the market approach reflects the current value of the Company perceived in the active market. However, as the valuation arrived at using market multiples is based on the past/current transaction or traded values of comparable companies/businesses, it may not reflect the possible changes in future trend of cash flows being generated by a business.

2. Income Approach : The income approach reflects present value of future cash flows. For valuing a business, the discounted cash flow (DCF) methodology is used under this approach. This methodology works on the premise that the value of a business is measured in terms of future cash flow streams, discounted to the present time at an appropriate discount rate. This method is used to determine the present value of business on a going concern assumption. The DCF technique recognises the time value of money.

The value of the firm is arrived at by estimating the Free Cash Flow to Firm (FCFF) and discounting the same at the Weighted Average Cost of Capital (WACC). FCFF is estimated by forecasting free cash flows available to the Arm (which are derived on the basis of the likely future earnings of the company).

3. Cost Approach: The cost approach essentially estimates the cost of replacing the tangible assets of the business. The replacement cost takes into account the market value of various assets or the expenditure required to create the infrastructure exactly similar to that of a company being valued.

Significant unobservable inputs

Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cash flows used in income approach.

Inter-relationship between significant unobservable inputs and fair value measurement

The estimated fair value would increase (decrease) if there is a change in significant unobservable inputs used in determination of fair value.

Considering the diverse asset and investment base of the Company with differing risk/return profiles, a sum of the parts approach has been adopted for the valuation. Under this method, the value of each distinct business/asset/investment has been arrived at separately and total value estimate for the Company presented as the sum of all its business/assets/investments.

Gujarat Guardian Limited

Fair value is determined using the ratio of enterprise value to EBIDTA adjusted for the industry average. The industry average has been computed using peer companies. Further, in the absence of latest valuation report of Gujarat Guardian Limited, the fair value is determined based on valuation report as on 31st December, 2022. Once the latest valuation report is available, appropriate changes would be made in the subsequent periods.

Gujarat Industrial And Technical Consultancy Organisation Limited (GITCO) and Gujarat Informatics Limited

In the absence of sufficient information for determination of fair value, the Company has determined the same using net worth as reflected in the financial statements as at the each reporting date. Management is of the view that the value so determined are reflective ofthe fair values.

Further, in the absence of the audited financial statements of GITCO and Gujarat Informatics Limited, the fair value is determined based on unaudited financial statements for the year ended 31st March, 2023 and 31st March, 2022 respectively. Once the audited financials are available, appropriate changes would be made in the subsequent periods.

ii) Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the reporting periods

Sensitivity analysis - Investments in unquoted equity instruments

On account of lack of sufficient information as at the end of reporting period and nature of investments, the management is of the view that it is impracticable to determine the sensitivity of the fair values to changes in the underlying assumptions.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk.

Risk management framework

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. Company has also set up a Risk Management Committee.

Looking to the profile of the Company, i.e., Mining and Power Operations, the Company has inbuilt risk management practices to address various operational risks. The Company has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. The Company has no external borrowings. Hence, there is no financial risk that can impact the Company’s Financial Position. The Company primarily deals with natural resources. Hence, Policy of Government may impact the Company’s operational strategy. The Company’s risk management process revolves around following parameters:

1. Risk Identification and Impact Assessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

4. Risk Mitigation

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.

Other financial assets

The Company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their creditworthiness on an ongoing basis.

Trade and other receivables

Trade receivables of the Company are typically unsecured, except to the extent of advance received against sales for sale of lignite. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. Significant portion of trade receivables at the respective reporting date comprise State Governments'' PSUs. Management does not expect any credit risk on the same. The allowance for impairment of trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.

Management estimates that there are no instances of past due or impaired trade and other receivables.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments.

Currency risk

The functional currency of the Company is Indian Rupees.

The Company do not use derivative financial instruments for trading or speculative purposes. As the Company does not engage in foreign exchange transaction, it is not exposed to currency risk.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company does not have any undrawn or outstanding borrowings and hence does not possess any interest rate risk.

Price risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through other comprehensive income (FVTOCI). Some of the equity investments are publicly traded and are included in the NSE Nifty 50 Index.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company''s equity and other comprehensive income for the period. The analysis is based on the assumption that the index had increased by 20% or decreased by 20% with all other variables held constant, and that the Company''s quoted equity instruments moved in line with the index. The % have been determined considering average of the actual movements in quoted prices of equity shares held as investments as at 31st March, 2023.

2.46 CAPITAL MANAGEMENT

The Company''s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total non-current liabilities, less cash and bank balances. Adjusted equity comprises all components of equity.

2.48: PRIOR PERIOD ITEMS, ERRORS AND CHANGES IN ACCOUNTING POLICIES & ACCOUNTING ESTIMATES

(a) The Company has accounted for material prior period errors discovered during the current period, retrospectively by restating the comparative amounts to which the same relate. Since certain periods were prior to comparative period presented, the impact has been considered in opening balance sheet of comparative period presented.

(b) During the year, the company has made changes in the following accounting policies:

(I) Till FY 2021-22 in respect of Employee benefits of Provident Fund, it was stated in the accounting policy that ‘The Company pays provident fund contributions to GMDC Employees Provident Fund Trust. The Company has no further payment obligations once the contributions have been paid.’ It was also stated that ‘Reimbursement of losses and other related expenses to Provident Fund Trust are charged to the Statement of Profit and Loss as and when crystallised’ Thus the company reimburses the loss and other related expenses also to the Trust in addition to the provident fund contributions. Further during the year, the Trust informed the company that the finalisation of its accounts for FY 2022-23 is in progress and it is going to provide for the principal and interest on its stressed investments and requested the company to reimburse the above loss in addition to any other loss that the Trust may incur on the finalisation of accounts for FY 2022-23. The change is made in the policy with a view to remove the anomaly as stated above and also to provide for the known loss to the Trust on the stressed investments in FY 2022-23. On account of the change in the accounting policy profit for the year is decreased by '' 1,587.13 lakh (Previous Year '' Nil) and Provisions / Other current liabilities under the head Current Liabilities has increased by the like amount.

(II) In the Accounting policy of Revenue Recognition, it is added that in respect of Insurance claims, they are recognised as and when received, as the final amount of such claims to be settled cannot be measured reliably. The company is consistently following the above policy from year to year. But this fact was not disclosed in the accounting policy. For the sake of proper disclosure the change in policy has been made. However, the above change has not resulted in any change in profit or loss and/or asset or liability.

(III) Earlier the Company revised its Accounting Policy in respect of Leases in FY 2019-20 wherein ‘Adoption of Ind AS 116 and Transition’ was referred to. The mention of its accounting treatment on adoption of Ind AS 116 during transition was also made therein. As the Company has already adopted Ind AS 116 since 01st April,2019, reference of ‘transition’ in Significant Accounting policies is redundant. accordingly, the policy on leases is revised deleting the reference pertaining to transition therein. For the sake of proper disclosure the change in policy has been made. However, the above change has not resulted in any change in profit or loss and/or asset or liability.

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Mar 31, 2022

2.05.01 Investments measured at fair value through Other Comprehensive Income (FVTOCI) reflect investments in unquoted and quoted equity securities except investment in the shares of Gujarat State Financial Corporation which is measured at cost and provision for impairment is made for the same as above. Refer Note 2.45 for determination of their fair values.

2.05.02 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 Lakh number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by the Company from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to repurchase the above shares and the Company shall hold these shares as investment. The Board of Directors of the Company and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The remaining 25.45 Lakh shares of GACL as shown in above note have been purchased by the Company from the open market.

2.06.01 Naini Coal Company Ltd. is a 50:50 joint venture of the Company and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given Bank Guarantee of '' 6,500 Lakh to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Odisha. The said bank guarantee was secured by Corporate Guarantee of the Company for an amount of '' 3,250 Lakh and another '' 3,250 Lakh was secured by Bank Guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. '' 3,250 Lakh given by the Naini Coal Company Ltd. vide their letter dated 27th December, 2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. The Company had discharged its liability of '' 1,625 Lakh towards invoked Bank Guarantee and has accounted for the same as advance to Naini Coal Company Ltd. Total provision for impairment made for advances to Naini Coal Company Ltd. amounts to '' 1,625 Lakh (2020-21: '' 1,625 Lakh).

The Company filed special civil application before the Hon''ble High Court of Gujarat against arbitrary cancellation of coal block as well as invocation of Bank Guarantee. During the pendency of petition before the Hon''ble High court of Gujarat, the Hon''ble Supreme Court has cancelled all the coal blocks. Therefore, the petition with the Hon''ble High Court of Gujarat was pending in respect of invocation of Bank Guarantee of '' 1,625 Lakh only. The Hon''ble High Court of Gujarat vide its judgement and order dated 31st July, 2019 has rejected the relief sought by the Company for seeking refund of Bank Guarantee.

In view thereof the company has preferred civil suit before Ld. Small Cause Court, Ahmedabad for recovery of '' 1,625 Lakh given as Bank Guarantee. The suit is subjudicial before the above court at Ahmedabad.

After filing the Suit before the civil court it was necessary to conduct mediation under section 89 of the Civil Procedure Code, 1908. Accordingly, the Court issued notice to all the parties to the suit to remain present for mediation process on 27th January, 2021. However, filing none other than GMDC attended the said proceeding therefore the mediation proceedings have been declared failed and the suit has been transferred to regular board of small cause court, Ahmedabad for hearing on merits. The matter is pending at the stage of summons for settlement of issues before the court.

2.07.02 As per the Mine Closure guidelines (MCG), the amount is required to be deposited in Escrow Account with a scheduled bank. The Company has opened the Escrow accounts for its all six lignite mines and deposited the amount.

Panandhro Mine is having lease area of 1,151 hectares and 568 hectares. In respect of lease area of 1,151 hectares, the company has deposited an amount of '' 9,600 Lakh in escrow account as per calculation accepted by the Office of the Coal Controller of India as against provision of '' 11,399.20 Lakh as per draft mine closure plan. Necessary effect in the provision for mine closure will be given in the books of account after the acceptance of mine closure plan of the said mine by the Ministry of Coal, Government of India.

In respect of lease area of 568 hectares, the life of mine was over in March 2007. As lignite was exhausted, the last production of lignite was done therein in March 2007. It was last done more than two years before the Mine Closure Guidelines, 2009 which came into force w.e.f. 27th August, 2009. Mine closure activities are also almost over in the said lease area.

In the MCG there was a clause for deposition of funds for mine closure in the escrow account at the prescribed rates. However, there was no provision in the MCG to apply them with retrospective date. Therefore, the MCG are not applicable in respect of 568 hectares lease area. Hence, the same has not been provided and deposited.

2.07.03 It was observed by the Office of the Accountant General (AG) on the audited financial statements of the company for the Financial Year 2018-19 in respect of Bhavnagar Mines for understatement of provision for mine closure and overstatement of profit by '' 13.27 Crore and understatement of Balance with Banks in Escrow Account as well as of Cash and Cash equivalents by '' 13.93 Crore and assurance was given by the company to refer the matter to the Office of the Coal Controller of India (CCI) for their final conclusion. Accordingly, the matter has been referred to CCI and the final decision thereto is still awaited. Necessary adjustment, if any, will be made in the accounts after the final outcome of the matter. However, the company has not received any notice of shortfall for the amount deposited in escrow account.

2.07.04 As per the technical certificate, the company has carried out mine closure activities and incurred expenses during the year as per mine plan in respect of all the metallic-ferrous (non-lignite) mines either departmentally or through outside agencies and compliances are verified periodically by IBM authorities mandated by the Government of India.

2.10.01 Considering the affirmations for compliance of code of conduct of the Company given by the directors and other officers of the Company, neither any trade receivables are due from directors or other officers of the Company either severally or jointly with any other person, nor any trade receivables are due from firms or private companies in which any director is a partner, a director or member.

2.11.01 Other bank balances include restricted bank balances on account of unpaid dividend, Fixed deposits for Security against borrowings (overdraft facility), Security against guarantees and Security against other commitments as stated above.

Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, was not executed and an amount of '' 24.92 Lakh (31st March, 2021: '' 24.92 Lakh) was recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalised bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly, the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

2.13.01 The company has paid in May 2015 an amount of '' 37.50 lakh for 3.75 Lakh shares of '' 10 each to Stone Research Foundation to subscribe its shares which is included under the head "Others" above. However, no shares have been allotted by the said company so far and it has been decided to close the Stone Research Foundation. Necessary adjustments in accounts will be made after receiving share application money and other receivables, if any.

2.13.02 In order to expand the area of operations and exploring mineral resources in the allotted areas of operations, a Memorandum of Understanding has been executed between the company and MOIL Ltd. on 1st October, 2019.

After completion of exploration work and its analysis, MOIL will prepare Techno Economic Feasibility Report (TEFR). Based on the TEFR, if project is viable, a Joint Venture Company (JVC) will be formed between GMDC and MOIL with shareholding of 49% and 51% respectively. If JVC is formed, expenditure incurred before JV formation by both the companies shall be considered as their investment in JVC. Pending such conversion, cost of exploration will be shared by MOIL and GMDC in equal proportion. The company’s share therein has been shown above under the head “Advance to others”.

2.16.02 Rights, preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a face value of '' 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

In respect of the Financial Year 2020-21, dividend of '' 0.20 per share was proposed and approved. The same was recognised as distributions to equity shareholders during the year ended 31st March, 2022 (31st March, 2021: '' 2 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.24.01 Vide Government Resolution dated 19th November, 2009, the Company has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose of the same for which the Company will be entitled to retain 20% of the sale price. The Company has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, '' 565.12 Lakh (31st March, 2021: '' 297.04 Lakh) (i.e. 80% of the basic sale price) has been transferred during the year to GMRDS and included under the head "Other Financial Liabilities".

2.26.01 The Government of Gujarat (GOG) has provided funds amounting to '' 4,357.66 Lakh (31st March, 2021: '' 4,035.22 Lakh) which are in the nature of deposits for Construction and other expenses for Stone Park and Laboratory on behalf of Commissioner of Geology & Mining (CGM), GOG. Out of the said deposits, the Company has utilised '' 4,185.84 Lakh (31st March, 2021: '' 2,880.49 Lakh) till 31st March, 2022. Net balance of unutilised funds amounting to '' 171.82 Lakh (31st March, 2021: '' 1,154.73 Lakh) is shown under the head "Other Current Non-Financial Liabilities".

2.27.01 The Company is selling lignite/ power to GSECL/GUVNL. For arriving at the rate of lignite to be charged in invoice for sale of Lignite/power from year to year, it is charging rate of interest of 13% on fixed assets of the respective project for finalisation of cost as per agreed formula and accordingly has recognised the revenue on such sale. However, w.e.f. 1st July, 2017, while making the payment, GSECL and GUVNL are allowing rate of interest of 8.50% only instead of 13%. Amount receivable from GSECL/GUVNL thereagainst is '' 1,027.02 Lakh (31st March, 2021: '' 998.62 Lakh)

After 1st July, 2021, from time to time the company has revised upward the rate of lignite/power sold to GSECL/GUVNL and accordingly has recognised the revenue on such sale as per agreed formula. However, payments are being made by GSECL and GUVNL without considering such rate revision. Amount receivable from GSECL/GUVNL thereagainst is '' 2,967.04 Lakh (31st March, 2021: '' Nil).

The matter has been referred to Government of Gujarat (GOG) to settle the issue. Necessary adjustment entries, if any, will be passed after the matter is finalised by GOG.

2.28.01 During the year, the company earned an interest of '' 3,680.30 Lakh (2020-21: '' 3,920.90 lakh) on the fixed deposits of '' 76,988.30 Lakh (31st March, 2021: '' 68,731.39 Lakh) held in the escrow accounts for mine closure expenses and recognised such interest as income in the Statement of Profit and Loss. The interest income so earned is a part of escrow account over which the company has no hold until the provisions of mine closure plan are complied.

As per prevailing guidelines of Ministry of Coal, Govt of India, up to 50% of the total deposited amount including interest accrued in the escrow account would be released to the company after every five years in proportion to the expenditure incurred on mine closure and the balance will be released at the end of final mine closure on compliance of all the provisions of mine closure plan, provided that restoration of mine is completed within the specified period, failing which the amount in the escrow account is liable to be forfeited.

2.34.01 During the year, royalty on account of sale of Bauxite had been accounted for '' 1,423.89 Lakh (2020-21: '' 1,288.21 Lakh) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

2.34.02 In view of the Supreme Court’s decision in respect of mining activities, applications made by the Company for renewal of leases covering 2,040 (2020-21: 2,040) hectares of land at Panandhro lignite mine for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

2.34.03 During the year, the Company has written off '' 3.68 Lakh (2020-21: '' 21 Lakh) and written back '' 4.15 Lakh (2020-21: '' 89.33 Lakh) in the books of account. In the opinion of the management, such amounts are no longer receivable / payable. Net effect thereof is written off/(back) to the Statement of Profit and Loss amounting to '' (0.47) Lakh (2020-21: '' (68.33) Lakh).

2.34.04 In compliance with Section 135(5) of the amended Companies Act, 2013, the Company has spent '' 785.00 Lakh (2020-21: '' 955.33 Lakh) against the minimum statutory requirement of spending '' 609.05 Lakh (2020-21: '' 947.97 Lakh) (based on average net profits of last 3 years) during the year towards Corporate Social Responsibility (CSR) Expense.

2.35.01 Short/Excess Provision for Tax of Earlier years - During the year, the company has written off/(back) the difference between the provision for income tax as per books of account and income tax payable on taxable income as per income tax returns filed for earlier years amounting to '' 605.45 Lakh (2020-21: '' 16,087.27 Lakh) and the same has been disclosed in the Statement of Profit and Loss Account as Short/Excess Provision for Tax of Earlier years.

2.35.02 As per Section 115BAA of the Income Tax Act, 1961, the company has the option to exercise switchover to new tax regime on or after the 1st day of April, 2020, by forgoing certain available tax deductions, which cannot be reversed in the subsequent years. The applicable Income tax rate as per the new tax regime comes to 25.17% as against the tax rate of 34.944% as per old tax regime. Till the Financial Year (F.Y.) 2020-21 such switchover was not beneficial to the company. However, considering the net fund outflow under both the tax regimes, from F.Y. 2021-22 it was decided to switchover to new tax regime. The tax liability under the new tax regime comes to '' 19,584.41 Lakh as against tax liability of '' 23,577.68 Lakh as per the old regime and tax impact has been given in the accounts considering new tax regime.

Adoption of new tax regime as stated above has resulted in increase in the deferred tax liability on account of reversal of deferred tax asset available to the company. This has net tax impact of '' 13,423.70 Lakh which has been shown as deferred tax expense in the Statement of Profit and Loss.

2.37.01 The company is a sole merchant seller of Lignite in the State of Gujarat. Lignite was exhausted in the Panandhro mines in April 2018. Prior to that production from Panandhro mines was inadequate to meet the needs of the power plants of the company and GSECL as well as demand of the customers of Kutch region.

Apart from power plants, the company has also to cater to the fuel needs of Micro, Small, Medium and Large Enterprises, therefore, it was inevitable in the larger public interest to increase lignite production in Kutch Region i.e. from Mata No Madh and Umarsar mines above its specified annual lignite production capacity for which the concurrence of Board has been accorded and the Government of Gujarat has been intimated to enhance the Annual Lignite Production Capacity. Liability in this regard, if any, cannot be ascertained at this stage. Necessary adjustment entries, if any, will be passed after the final outcome of the matter.

2.39 EVENTS OCCURRING AFTER THE REPORTING PERIOD

The Board has recommended dividend of '' 4.30 per share which is subject to approval of shareholders in the ensuing general meeting.

2.40 In the opinion of Management, any of the assets other than items of property, plant and equipment, investment properties, intangible assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

2.41 Balances of trade payables, trade receivables, loans & advances, advances from customers, other non-current/current liabilities, etc. are subject to confirmation and adjustments, if any, in the accounts.

2.42 On periodical basis and as and when required, the Company reviews the carrying amounts of its assets. In case the fair value is less than the carrying value, an impairment charge is created.

GMDC Ltd. had commissioned 2 X 125 MW Akrimota Thermal Power Station (ATPS) at Village Nani Chher, Taluka-Lakhpat, Dist. Kutchh, Gujarat State in the year 2005, wherein lignite was supplied from its own mines.

The ATPS was incurring heavy losses since financial year 2019-20. Plant load factor (PLF) had gone down drastically from 54.22% in 2018-19 to as low as 19.87% in 2020-21.

Therefore, in the financial year 2020-21, the Company had reviewed the carrying amount of ATPS’s assets and the recoverable amount. The recoverable amount is higher of fair value less cost to sales and value in use. In case of ATPS (cash generating unit), the recoverable amount i.e. fair value less cost to sale as on 31st March, 2021 was '' 21,901.81 Lakh. Carrying amount of ATPS in books as on 31st March, 2021 was '' 61,561.30 Lakh. Therefore, there was an impairment loss of '' 39,659.49 Lakh being difference between carrying amount and recoverable amount. ''Market Value'' basis of Valuation has been adopted as per the framework and guidelines provided in the international valuation guidelines.

The said loss of '' 39,659.49 Lakh has been shown as impairment loss in ATPS as an exceptional item in the Statement of Profit and Loss for financial year 2020-21.

2.43 SEGMENT INFORMATION

(a) Description of segment and principal activities

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment, and accordingly, the Company has identified two reportable operating segments viz. Mining and Power. Operating segments have been identified and reported in a manner consistent with the internal reporting provided to the CODM.

(b) Segment revenue and expenses

Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on a reasonable basis have been disclosed as "Unallocated".

(c) Segment assets and liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax-related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as "Unallocated".

(d) Secondary segment reporting

The Company does not have geographical distribution of revenue as the operations of the Company are carried out within the country and hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

(e) Information about major customers

Revenue from power segment (which exceeds 10% of total segment revenue) amounting to '' 27,704.46 Lakh (2020-21: '' 19,801.32 Lakh) is derived from a single customer and revenue from mining segment (which exceeds 10% of total segment revenue) amounting to '' 13,406.64 Lakh (2020-21: '' 17,919.57 Lakh) (inclusive of tax) is derived from a single customer.

(f) Information about product and services

The Company''s revenue from external customers for each product is same as that disclosed below under "segment revenue".

Types of inputs are as under:

Input Level I (Directly Observable) which includes quoted prices in active markets for identical assets such as quoted price for an equity security on Security Exchanges

Input Level II (Indirectly Observable) which includes prices in active markets for similar assets such as quoted price for similar assets in active markets, valuation multiple derived from prices in observed transactions involving similar businesses etc.

Input Level III (Unobservable) which includes management''s own assumptions for arriving at a fair value such as projected cash flows used to value a business etc.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

As per the accounting policy of the company on Equity Instruments, all equity instruments in the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at Fair Value Through Profit or Loss (FVTPL). For all other equity instruments, the company has the option to make an irrevocable election on initial recognition, on an instrument-byinstrument basis, to present changes in fair value through Other Comprehensive Income (OCI) rather than through profit or loss. The option to present changes in Fair Value Through Other Comprehensive Income (FVTOCI) is available only at the time of initial recognition. Accordingly, the company has elected to measure its equity instruments through FVTOCI.

B. Measurement offair values

i) Valuation techniques and significant unobservable inputs

The following are the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Gujarat State Petroleum Corporation Limited

1. Market approach: This approach uses information generated by market transactions of the Company being valued or the transactions of comparable companies. The following market-linked information may be used for determining valuation under this approach:

- Quoted price of the company being valued,

- Past transaction value of the company being valued,

- Listed comparable companies'' trading multiples like price-to-earning ratio, enterprise value to earning before interest, tax, depreciation and amortisation, enterprise value to sales etc.

- Transactions multiples for investment / M & A transaction of comparable companies.

The valuation arrived at based on the market approach reflects the current value of the Company perceived in the active market. However, as the valuation arrived at using market multiples is based on the past/current transaction or traded values of comparable companies/businesses, it may not reflect the possible changes in future trend of cash flows being generated by a business.

2. Income Approach: The income approach reflects present value of future cash flows. For valuing a business, the discounted cash flow (DCF) methodology is used under this approach. This methodology works on the premise that the value of a business is measured in terms of future cash flow streams, discounted to the present time at an appropriate discount rate. This method is used to determine the present value of business on a going concern assumption. The DCF technique recognises the time value of money.

The value of the firm is arrived at by estimating the Free Cash Flow to Firm (FCFF) and discounting the same at the Weighted Average Cost of Capital (WACC). FCFF is estimated by forecasting free cash flows available to the Arm (which are derived on the basis of the likely future earnings of the company).

3. Cost Approach: The cost approach essentially estimates the cost of replacing the tangible assets of the business. The replacement cost takes into account the market value of various assets or the expenditure required to create the infrastructure exactly similar to that of a company being valued.

Significant unobservable inputs

Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cash flows used in income approach.

Inter-relationship between significant unobservable inputs and fair value measurement

The estimated fair value would increase (decrease) if there is a change in significant unobservable inputs used in determination of fair value.

Considering the diverse asset and investment base of the Company with differing risk/return profiles, a sum of the parts approach has been adopted for the valuation. Under this method, the value of each distinct business/asset/investment has been arrived at separately and total value estimate for the Company presented as the sum of all its business/assets/investments.

Gujarat Guardian Limited

Fair value is determined using the ratio of enterprise value to EBIDTA adjusted for the industry average. The industry average has been computed using peer companies. Further, in the absence of the latest valuation report of Gujarat Guardian Limited, the fair value is determined based on valuation report as on 31st December, 2021. Once the latest valuation report is available, appropriate changes would be made in the subsequent periods.

Gujarat Industrial And Technical Consultancy Organisation Limited (GITCO) and Gujarat Informatics Limited

In the absence of sufficient information for determination of fair value, the Company has determined the same using net worth as reflected in the financial statements as at the each reporting date. Management is of the view that the value so determined are reflective of the fair values.

Further, in the absence of the audited financial statements of GITCO and Gujarat Informatics Limited, the fair value is determined based on unaudited financial statements for the year ended 31st March, 2022. Once the audited financials are available, appropriate changes would be made in the subsequent periods.

ii) Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the reporting periods

iii) Level 3 fair values

Movements in the values of unquoted equity instruments for the period ended 31st March, 2022 and 31st March, 2021:

On account of lack of sufficient information as at the end of reporting period and nature of investments, the management is of the view that it is impracticable to determine the sensitivity of the fair values to changes in the underlying assumptions.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk.

Risk management framework

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. Company has also set up a Risk Management Committee.

Looking to the profile of the Company, i.e., Mining and Power Operations, the Company has inbuilt risk management practices to address various operational risks. The Company has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. The Company has no external borrowings. Hence, there is no financial risk that can impact the Company’s Financial Position. The Company primarily deals with natural resources. Hence, Policy of Government may impact the Company’s operational strategy. The Company’s risk management process revolves around following parameters:

1. Risk Identification and Impact Assessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

4. Risk Mitigation

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.

Other financial assets

The Company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their creditworthiness on an on-going basis.

Trade and other receivables

Trade receivables of the Company are typically unsecured, except to the extent of advance received against sales for sale of lignite. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. Significant portion of trade receivables at the respective reporting date comprise of State Governments'' PSUs. Management does not expect any credit risk on the same. The allowance for impairment of trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.

Management estimates that there are no instances of past due or impaired trade and other receivables.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements, if any.

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments.

Currency risk

The functional currency of the Company is Indian Rupees.

The Company do not use derivative financial instruments for trading or speculative purposes. As the Company does not engage in foreign exchange transaction, it is not exposed to currency risk.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company does not have any undrawn or outstanding borrowings and hence does not possess any interest rate risk.

Price risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through other comprehensive income (FVTOCI). Some of the equity investments are publicly traded and are included in the NSE Nifty 50 Index.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company''s equity and other comprehensive income for the period. The analysis is based on the assumption that the index had increased by 20% or decreased by 20% with all other variables held constant, and that the Company''s quoted equity instruments moved in line with the index. The % have been determined considering average of the actual movements in quoted prices of equity shares held as investments as at 31st March, 2022.

2.46 CAPITAL MANAGEMENT

The Company''s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total non-current liabilities, less cash and bank balances. Adjusted equity comprises all components of equity.

2.50 COVID-19 IMPACT ON BUSINESS

Considering both the internal and external factors up to the date of approval of these financial results by the Board of Directors, the Company continues to believe that the impact of COVID-19 on its business, assets, profitability and liquidity, both present and future, if any, would be limited. There is no material impact on the carrying amounts of its inventories, intangible assets, trade receivables, investments and other financial assets. The management does not foresee any medium-to-long term risks at this stage in the company''s ability to continue as a going concern.

2.51 RECENT PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 23rd March, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from 1st April, 2022, as below:

Ind AS 103 - Reference to Conceptual Framework

The amendments specify that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These changes are clarificatory in nature and do not significantly change the requirements of Ind AS 103. The Company does not expect the amendment to have any significant impact in its financial statements.

Ind AS 16 - Proceeds before intended use

The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, such sales proceeds and related costs are to be recognised in profit or loss. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its financial statements.

Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract

The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification and is not expected to have any significant impact in company''s financial statements.

Ind AS 109 - Annual Improvements to Ind AS (2021)

The amendment clarifies which fees an entity includes when it applies the ‘10 percent’ test of Ind AS 109 in assessing whether to derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements.

Ind AS 106 - Annual Improvements to Ind AS (2021)

The amendments remove the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives were described in that illustration. The Company does not expect the amendment to have any significant impact in its financial statements.

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Mar 31, 2021

Gujarat State Electricity Corporation Limited (GSECL) and the Company had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities and also for general public in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992,1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Company as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of items of property, plant and equipment towards 50% share of the Company to the tune of''59.40 Lakh (31st March, 2020: ''59.40 Lakh) is accounted in the books of the Company and included in the respective items of property, plant and equipment.

Investments measured at fair value through Other Comprehensive Income (FVTOCI) reflect investments in unquoted and quoted equity securities except investment in the shares of Gujarat State Financial Corporation which is measured at cost and provision for impairment is made for the same as above. Refer Note 2.45 for determination oftheirfairvalues.

As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 Lakh number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by the Company from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to repurchase the above shares and the Company shall hold these shares as investment. The Board of Directors of the Company and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The remaining 25.45 Lakh shares of GACL as shown in above note have been purchased by the Company from the open market.

Naini Coal Company Ltd. is a 50:50 joint venture of the Company and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given Bank Guarantee of ''6,500 Lakh to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Odisha. The said bank guarantee was secured by Corporate Guarantee of the Company for an amount of''3,250 Lakh and another ''3,250 Lakh was secured by Bank Guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. ''3,250 Lakh given by the Naini Coal Company Ltd. vide their letter dated 27th December,2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. The Company had discharged its liability of ''1,625 Lakh towards invoked Bank Guarantee and has accounted for the same as advance to Naini Coal Company Ltd. Total provision for impairment made for advances to Naini Coal Company Ltd. amounts to '' 1,625 Lakh (2019-20: '' 1,625 Lakh).

The Company filed special civil application before the Hon''ble High court of Gujarat against arbitrary cancellation of coal block as well as invocation of Bank Guarantee. During the pendency of petition before the Hon''ble High court of Gujarat, the Hon''ble Supreme Court has cancelled all the coal blocks. Therefore, the petition with the Hon''ble High court of Gujarat was pending in respect of invocation of Bank Guarantee of '' 1,625 Lakh only. The Hon''ble High court of Gujarat vide itsjudgement and order dated 31st July,2019 has rejected the relief sought by the Company for seeking refund of BankGuarantee.

In view thereof the company has preferred civil suit before Ld. Small Cause Court,Ahmedabad for recovery of '' 1,625 Lakh given as Bank Guarantee. The suit is subjudicial before the above court atAhmedabad.

After filing the Suit before the civil court it was necessary to conduct mediation under section 89 of the Civil Procedure Code, 1908. Accordingly, the Court issued notice to all the parties to the suit to remain present for mediation process on 27th January, 2021. However, none other than GMDC attended the said proceeding therefore the mediation proceedings have been declared failed and the suit has been transferred to regular board of small cause court,Ahmedabad for hearing on merits.

As per the Mine Closure guidelines the amount is required to be deposited in Escrow Account with a scheduled bank. The Company has opened the Escrow accounts for its all six lignite mines and deposited the amount. Panandhro mine is having lease area of 1151 hectares and 568 hectares. In respect of lease area of 1151 hectares, the company has deposited an amount of ''9,600 lakh in escrow account as per calculation accepted by Office of the Coal Controller of India as against provision of ''11,399.20 lakh as per draft mine closure plan. Necessary effect in the provision for mine closure will be given in the books of account after the acceptance of mine closure plan of the said mine by Ministry of Coal, Government of India.

In respect of lease area of 568 hectares, the life of mine was over in March, 2007. As lignite was exhausted, the last production of lignite was done therein in March, 2007. It was last done more than two years before the Mine Closure Guidelines, 2009 (MCG) which came into force w.e.f. 27thAugust, 2009. Mine closure activities are also almost over in the said lease area.

In the MCG there was a clause for deposition of funds for mine closure in the escrow account at the prescribed rates. However, there was no provision in the MCG to apply them with retrospective date. Therefore, the MCG are not applicable in respect of 568 hectares lease area.

Hence, the same has not been provided and deposited.

It was observed by the Office of the Accountant General(AG) on the audited financial statements of the company for the Financial Year 2018-19 in respect of Bhavnagar Mines for understatement of provision for mine closure and overstatement of profit by '' 13.27 Crore and understatement of Balance with Banks in Escrow Account as well as of Cash and Cash equivalents by ''13.93 Crore and assurance was given by the company to refer the matter to the Office of the Coal Controller of India(CCI) for their final conclusion. Accordingly, the matter has been referred to CCI and the final decision thereto is still awaited. Necessary adjustment, if any, will be made in the accounts after final outcome of the matter. However, the company has not received any notice of shortfall for the amount deposited in escrow account.

Other bank balances include restricted bank balances on account of unpaid dividend, Fixed deposits for Security against guarantees and Security against other commitments as stated above.

Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, was not executed and an amount of ''24.92 Lakh (31 March, 2020: ''24.92 Lakh) was recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Company has placed the same with Union Bankof India, VastrapurBranch,Ahmedabad.

The company has paid in May,2015 an amount of ''37.50 lakh for 3.75 lakh shares of '' 10 each to Stone Research Foundation to subscribe its shares which is included under the head "Others" above. However, no shares have been allotted by the said company so far and it has been decided to close the Stone Research Foundation. Necessary adjustments in accounts will be made after receiving share application money and other receivables, if any.

I The Government of Gujarat (GOG) has provided funds amounting to '' 4,035.22 Lakh (31st March, 2020: '' 8,134.73 Lakh) which are in the nature of deposits for Construction and other expenses for Stone Park, Laboratory and Trade Fair on behalf of Commissioner of Geology & Mining (CGM), GOG. Out of the said deposits, the Company has utilized '' 2,880.49 Lakh (31st March, 2020: '' 7,677.62 Lakh) till 31st March, 2021. Net balance of unutilised funds amounting to '' 1,154.73 Lakh (31st March, 2020: '' 457.11 Lakh) is shown underthe head "OtherCurrentNon-Financial Liabilities".

The company is selling lignite/ power to GSECL/GUVNL. For arriving at the rate of lignite to be charged in invoice for sale of Lignite/powerfrom year to year, the company is charging rate of interest of 13% on fixed assets of the respective project for finalization of cost as per agreed formula. Accordingly, the company has recognised the revenue for the sale of lignite/power to GSECL/GUVNL. However, while making the payment, GSECLand GUVNL are allowing rate of interest of 8.50% only instead of 13% w.e.f 01st July,2017. Amount receivable from GSECL/GUVNLthere against is ''998.62 lakh (31st March, 2020: ''880.46 lakh). The matter has been referred to Government of Gujarat (GOG) to settle the issue. Necessary adjustment entries, if any, will be passed afterthe matter is finalised by GOG.

The company during the year, earned an interest of ''3,920.90 lakh (2019-20: ''4,144.76 lakh) on the fixed deposits of ''68,731.39 lakh (31st March, 2020: '' 55,174.27 lakh) held in the escrow accounts for mine closure expenses and recognised such interest as income in the Statement of Profit and Loss. The interest income so earned is a part of escrow account over which the company has no hold until the provisions of mine closure plan are complied. As per prevailing guidelines of Ministry of Coal, Govt of India, up to 50% of the total deposited amount including interest accrued in the escrow account would be released to the company after every five years in proportion to the expenditure incurred on mine closure and the balance will be released at the end of final mine closure on compliance of all the provisions of mine closure plan, provided that restoration of mine is completed within the specified period, failing which the amount in the escrow account is liable to be forfeited.

During the year, royalty on account of sale of Bauxite had been accounted for '' 1,288.21 Lakh (2019-20: ''891.06 Lakh) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

In view of the Supreme Court''s decision in respect of mining activities, applications made by the Company for renewal of leases covering 2,040 (2019-20: 2,040) hectares of land at Panandhro lignite mine for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

During the year, the Company has written off ''21 Lakh (2019-20: ''746.35 Lakh) and written back ''89.33 Lakh (2019-20: ''Nil Lakh) in the books of account. In the opinion of the management, such amounts are no longer receivable / payable. Net effect thereof is written off/(back) to the Statement of Profit and Loss amounting to''(68.33) Lakh (2019-20: '' 746.35 Lakh).

Short/Excess Provision forTaxof Earlieryears

During the year the company has written back the difference between the provision for income tax as per books of account and income tax payable on taxable income as per income tax returns filed for earlier years amounting to ''16,087.27 lakh and the same has been disclosed in the Statement of Profit and Loss Account as Short/Excess Provision for Tax of Earlieryears.

EVENTS OCCURRING AFTER THE REPORTING PERIOD

The Board of Directors has recommended dividend of '' 0.20 per share which is subject to approval of shareholders in the ensuing general meeting.

In the opinion of Management, any of the assets other than items of property, plant and equipment, investment properties, intangible assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

Balances of trade payables, trade receivables, loans & advances, advances from customers, other non-current/current liabilities, etc. are subject to confirmation and adjustments, if any, in the accounts.

On periodical basis and as and when required, the Company reviews the carrying amounts of its assets. In case the fair value is less than the carrying value an impairment charge is created.

GMDC Ltd. had commissioned 2 X 125 MW Akrimota Thermal Power Station (ATPS) at village Nani Chher, Taluka-Lakhpat, Dist. Kutchh, Gujarat State in the year 2005. wherein lignite was supplied from its own mines.

The ATPS is incurring heavy losses since financial year 2019-20. Plant load factor (PLF) has gone down drastically from 54.22% in 2018-19 to as low as 19.87% in 2020-21.

Therefore, in the financial year 2020-21, the company has reviewed the carrying amount of ATPS''s assets and the recoverable amount. The recoverable amount is higher of fair value less cost to sales and value in use. In case of ATPS (cash generating unit), the recoverable amount i.e. fair value less cost to sale is ''21,901.81 lakh. Carrying amount of ATPS in books is ''61,561.30 lakh. Therefore, there is an impairment loss of ''39,659.49 lakh being the difference between carrying amount and recoverable amount. ''Market Value'' basis of Valuation has been adopted as per the framework and guidelines provided in the international valuation guidelines.

The said loss of ''39,659.49 Lakh has been shown as impairment loss in ATPS as an exceptional item in the Statement of Profit and Loss.

SEGMENT INFORMATION

(a) Description of segment and principal activities

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment, and accordingly, the Company has identified two reportable operating segments viz. Mining and Power. Operating segments have been identified and reported in a manner consistent with the internal reporting provided to the CODM.

(b) Segment revenue and expenses

Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on a reasonable basis have been disclosed as "Unallocated".

(c) Segment assets and liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as "Unallocated".

(d) Secondary segment reporting

The Company does not have geographical distribution of revenue as the operations of the Company are carried out within the country and hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

Information about major customers

Revenue from power segment (which exceeds 10% of total segment revenue) amounting to ''19,462.25 Lakh (2019-20: ''29,568.10 Lakh) is derived from a single customer and revenue from mining segment (which exceeds 10% of total segment revenue) amounting to ''17,919.57 Lakh (201920: ''17,859.60 Lakh) (inclusive of tax) is derived from a single customer.

Terms and conditions

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders. Goods were sold to related parties as mentioned above on mutually agreed terms. Most of the outstanding balances are unsecured.

Other transactions with Government related entities

Apart from the above transactions, the Company has also entered into other transactions in ordinary course of business with Government related entities. These are transacted at arm''s length prices based on the agreed contractual terms.

Further, the Company has entered into various long term material supply and power purchase agreements with the related parties (including Government related entities) where goods/services are to be provided at prices determined based on the contractual terms agreed. Some of the contracts are in the process of being finalised pending the necessary approvals.

Types of inputs are as under:

Input Level! (Directly Observable) which includes quoted prices in active markets for identical assets such as quoted price for an equity security on Security Exchanges

Input Level II (Indirectly Observable) which includes prices in active markets for similar assets such as quoted price for similar assets in active markets, valuation multiple derived from prices in observed transactions involving similar businesses etc.

Input Level III (Unobservable) which includes management''s own assumptions for arriving at a fair value such as projected cash flows used to value a business etc.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

As per the accounting policy of the company on Equity Instruments, all equity instruments in the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at Fair Value Through Profit or Loss(FVTPL). For all other equity instruments, the company has the option to make an irrevocable election on initial recognition, on an instrument-by-instrument basis, to present changes in fair value through Other Comprehensive Income(OCI) rather than through profit or loss. The option to present changes in Fair Value Through Other Comprehensive Income (FVTOCI) is available only at the time of initial recognition. Accordingly, the company has elected to measure its equity instruments through FVTOCI.

B. Measurement of fairvalues

i) Valuation techniques and significant unobservable inputs

The following are the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Financial instruments measured at fair value FVTOCI in unquoted equity shares:

Gujarat State Petroleum Corporation Limited

1. Market approach : This approach uses information generated by market transactions of the Company being valued or the transactions of comparable companies. The following market-linked information may be used fordetermining valuation underthis approach.

- Quoted price of the company being valued,

- Past transaction value of the company being valued,

- Listed comparable companies'' trading multiples like price to earning ratio, enterprise value to earning before interest, tax, depreciation and amortisation, enterprise value to sales etc.

- Transactions multiples for investment / M & Atransaction of comparable companies.

The valuation arrived at based on the market approach reflects the current value of the Company perceived in the active market. However, as the valuation arrived at using market multiples is based on the past/current transaction or traded values of comparable companies/businesses, it may not reflect the possible changes in future trend of cash flows being generated by a business.

2. Income Approach : The income approach reflects present value of future cash flows. For valuing a business, the discounted cash flow (DCF) methodology is used under this approach. This methodology works on the premise that the value of a business is measured in terms of future cash flow streams, discounted to the present time at an appropriate discount rate. This method is used to determine the present value of business on a going concern assumption. The DCF technique recognizes the time value of money.

The value of the firm is arrived at by estimating the Free Cash Flow to Firm (FCFF) and discounting the same at the Weighted Average Cost of Capital (WACC). FCFF is estimated by forecasting free cash flows available to the firm (which are derived on the basis of the likely future earnings of the company).

3. Cost Approach: The cost approach essentially estimates the cost of replacing the tangible assets of the business. The replacement cost takes into account the market value of various assets or the expenditure required to create the infrastructure exactly similar to that of a company being valued.

Significant unobservable inputs

Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cashflows used in income approach.

Inter-relationship between significant unobservable inputs and fairvalue measurement.

The estimated fair value would increase (decrease) if there is a change in significant unobservable inputs used in determination offair value.

Considering the diverse asset and investment base of the Company with differing risk/return profiles, a sum of the parts approach has been adopted for the valuation. Underthis method, the value of each distinct business/asset/investment has been arrived at separately and total value estimate for the Company presented as the sum of all its business/assets/investments.

Gujarat Guardian Limited

Fair value is determined using the ratio of enterprise value to EBIDTA adjusted for the industry average. The industry average has been computed using peer companies. Further, in the absence of latest valuation report of Gujarat Guardian Limited, the fair value is determined based on valuation report as on 31st December 2020. Once the latest valuation report is available, appropriate changes would be made in the subsequent periods.

Gujarat Industrial And Technical Consultancy Organisation Limited (GITCO) and Gujarat Informatics Limited

In absence of sufficient information for determination offair value, the Company has determined the

same using net worth as reflected in the financial statements as at the each reporting date. Management is of the view that the value so determined are reflective of the fair values.

Further, in the absence of the audited financial statements of GITCO and Gujarat Informatics Limited, the fair value is determined based on unaudited financial statements for the year ended 31st March, 2021. Once the audited financials are available, appropriate changes would be made in the subsequent periods.

ii) Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the reporting periods

Transfer out of Level 3

There were no movements in level 3 in either directions during the year 2020-21 and 2019-20.

Sensitivity analysis - Investments in unquoted equity instruments

On account of lack of sufficient information as at the end of reporting period and nature of investments, the management is of the view that it is impracticable to determine the sensitivity of the fair values to changes in the underlying assumptions.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk

Risk management framework

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. Company has also set up a Risk Management Committee.

Looking to the profile of the Company, i.e., Mining and Power Operations, the Company has inbuilt risk management practices to address various operational risks. The Company has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. The Company has no external borrowings. Hence, there is no financial risk that can impact the Company''s Financial Position. The Company primarily deals with natural resources. Hence, Policy of Government may impact the Company''s operational strategy. The Company''s risk management process revolves around following parameters:

1. Risk Identification and ImpactAssessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

Risk Mitigation Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.

Otherfinancial assets

The Company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Trade and other receivables

Trade receivables of the Company are typically unsecured ,except to the extent of advance received against sales for sale of lignite. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers'' financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. Significant portion of trade receivables at the respective reporting date comprise of State Governments'' PSUs. Management does not expect any credit risk on the same. The allowance for impairment of trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables.

The above receivables which are past due but not impaired are assessed on individual case to case basis and relate to a number of independent third party customers from whom there is no recent history of default. Management is of the view that these financial assets (majorly state owned PSUs) are not impaired as there has not been a significant change in credit quality and are recoverable based on the nature of the activity with the respective customer to which they belong and the type of customers. Consequently, no additional provision has been created on account of expected credit loss on the receivables. There are no other classes of financial assets that are past due but not impaired except for trade receivables as at 31st March, 2021 and 31st March, 2020.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk, including underlying customers'' credit ratings if they are available.

Management estimates that there are no instances of past due or impaired trade and other receivables. (ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements, if any.

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments.

Currency risk

The functional currency of the Company is Indian Rupees.

The Company do not use derivative financial instruments for trading or speculative purposes. As the Company does not engage in foreign exchange transaction, it is not exposed to currency risk.

Interest rate risk

Interest rate riskcan be eitherfairvalue interest rate risk or cash flow interest rate risk. Fairvalue interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company does not have any undrawn or outstanding borrowings and hence does not possess any interest rate risk.

Price Risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through other comprehensive income (FVTOCI). Some of the equity investments are publicly traded and are included in the NSE Nifty 50 Index.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company''s equity and other comprehensive income for the period. The analysis is based on the assumption that the index had increased by 20% or decreased by 20% with all other variables held constant, and that the Company''s quoted equity instruments moved in line with the index. The percentage have been determined considering average of the actual movements in quoted prices of equity shares held as investments as at 31st March, 2021

2.47 Corresponding figures of the previous year have been re-grouped / re-arranged / re-classified / restated and revised, wherever necessary, for rounding off to nearest lakh and/or to make them comparable with the figures of the currentyear.

2.48 Prior Period Items, Errors and Changes inAccounting Policies &Accounting Estimates

(a) During the year, the company has changed method of providing amortisation on mining rights as per unit of production method based on technical estimation of mineable mineral reserves. Upto the previous year, the company was charging amortisation based on technical estimation of Gross geological mineral reserves. This has resulted in increase in amortisation of mining rights by ''355.77 lakhs.

(b) (i) As per GST tax structure, GMDC falls under inverted tax structure wherein Input Tax Credit(ITC) is

higher than output tax liability. As per Rule 89 of GST GMDC is not eligible to get refund of ITC for services on or after 13th June,2018. In view thereof such amounts of ITC of ''5,903.80 lakh have been written off during the year by giving the effect by restating the figures of financial year 2019-20. Amounts aggregating ''9,302.95 lakh pertaining to periods priorto 1st April, 2019 have been written offduring the year by restating the balance of opening retained earnings.

Till F.Y 2019-20, in respect of various lignite projects of the company, the Company used to charge overburden removal expenditure based on plot-wise technically evaluated average stripping ratio after due adjustment for stripping activity on FIFO basis, where the company has awarded ‘unit rate'' based contracts for overburden removal and lignite extraction.

From F.Y. 2020-21, in cases where, the company has awarded unit rate based contracts and/or in the contracts where payments are made based on actual stripping ratio, for overburden removal and lignite extraction, stripping cost is charged on technically evaluated average stripping ratio at each plot of mine after due adjustment for stripping activity on FIFO basis in the Statement of Profit & Loss under the head “Loading of lignite and over burden removal”.

On account of change in the accounting policy, the profit for the year has increased by ''3,121.58 Lakh (Previous year ''99.72 Lakh) and Stripping Activity Adjustment assets under the head “Other Current Non FinancialAssets “have also been increased by the like amount.

The Company has accounted for material prior period errors discovered during the current period, retrospectively by restating the comparative amounts to which the same relate. Since certain periods were prior to comparative period presented, the impact has been considered in opening balance sheet ofcomparative period presented.

Covid-19 impact on business

As per the current assessment of the situation based on the internal and external information available up to the date of approval of these financial results by the Board of Directors, the Company continues to believe that the impact of Covid-19 on its business, assets, profitability and liquidity, both present and future, would be limited and there is no indication of any material impact on the carrying amounts of inventories, intangible assets, trade receivables, investments and other financial assets. The management does not expect any medium to long term risks at this stage in company''s ability to continue as a going concern. Company is closely monitoring any material changes to the economic environment and their impact on its business.

Recent pronouncements

On March 24, 2021, the Ministry of Corporate Affairs (“MCA”) through a notification, amended Schedule III of the Companies Act, 2013. These amendments are applicable from April 1,2021. Key amendments relating to Division II of Schedule III which pertain to companies whose financial statements are required to comply with Companies (IndianAccounting Standards) Rules 2015 are as under:

Balance Sheet:

• Specificformatfordisclosure of shareholding of promoters.

• Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to prior period errors and restated balances at the beginning of the current reporting period.

• Specific format for ageing of trade receivables, trade payables, capital work-in-progress and intangible assets underdevelopment.

• Lease liabilities should be separately disclosed under the head ‘financial liabilities'', duly distinguished as current and non-current.

• If a company has not used funds for the specific purpose for which it was borrowed from banks and financial institutions, then disclosure of details of where it has been used.

• Specific disclosure under ‘additional regulatory requirement'' such as compliance with approved schemes of arrangements, compliance with number of layers of companies, title deeds of immovable property not held in name of company, loans and advances to promoters, directors, key managerial

personnel (KMP)and related parties, details of benami property held etc.

Statement of Profit and Loss:

• Additional disclosure relating to Corporate Social Responsibility (CSR), undisclosed income and crypto currency specified under the head ‘additional information'' in the notes forming part of financial statements. The amendments are extensive and the company will evaluate the same for applying them as required bylaw.

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Mar 31, 2018

The Company had entered into Power Purchase Agreement (PPA) with one of the Government owned entities for sale of electricity produced from thermal power plant. The tenure of PPA is 30 years whereas the economic life is determined to be atleast 40 years. The management has evaluated the arrangement as per the provisions of Appendix C to Ind AS 17 - Leases and its classification is determined at the inception of arrangement. Accordingly, the arrangement is considered as an operating lease.

1.01.01 Contractual Commitments

Refer to Note 2.38 for disclosure of contractual commitments to purchase, construct or develop investment property.

Estimation of Fair Value

The Company obtains valuation for its investment properties (other than those under construction) at least annually. All resulting fair value estimates for investment properties are included in level 3. For properties under construction, management is of the view that the fair value can be determined reliably only on completion of the construction. Accordingly, the same shall be disclosed when the related work is completed.

1.02.01 Amortisation on mining rights represents depletion on wasting assets.

1.02.02 Intangible assets shown above is other than internally generated intangible assets having useful life of 10 years. It is amortized as per Straight Line Method over its useful life.

1.03.01 jhe Company has provided for impairment in respect of the investment made in Gujarat State Mining & Resources Corporation Ltd, Gujarat Jaypee Cement and Infra Ltd. and Naini Coal Company Ltd. as at 1st April 2016, while the investment made in Gujarat State Mining & Resources Corporation Ltd was written off during the financial year 201617.

1.4.01 Investments measured at fair value through Other Comprehensive Income (FVTOCI) reflect investments in unquoted and quoted equity securities. Refer Note 2.45 for determination of their fair values.

1.04.02 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 Lakh number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to repurchase the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The remaining 25.45 Lakh shares of GACL as shown in above note have been purchased by the Company from the open market.

* Refer note 2.45 for classification

1.05.01 Naini Coal Company Ltd. is a 50:50 joint venture of GMDC and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given bank guarantee of Rs. 65 Crores to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Orissa. The said bank guarantee was secured by Corporate Guarantee of GMDC for an amount of Rs. 3250 Lakh and another Rs. 3250 Lakh was secured by bank guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. Rs. 3250 Lakh given by the Naini Coal Company Ltd. vide their letter dated 27/12/2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. GMDC had discharged its liability of Rs. 1625 Lakh towards invoked bank guarantee and has accounted for the same as advance to Naini Coal Company Ltd. Total provision for impairment made for advances to Naini Coal Company Ltd. amounts to Rs. 1703.81 Lakh (PY: Rs. 2035.62 Lakh). During the year GMDC has received Rs.331.81 lakh from Govt.of India (through Naini Coal Co. Ltd) towards expenditure incurred on Geological and other reports, hence, provision has been reduced to that extent.GMDC has already filed special civil application before the Hon’ble Gujarat High court against arbitrary cancellation of coal block as well as invocation of bank guarantee. During the pendency of petition before the Hon’ble Gujarat High Court, the Hon’ble Supreme Court has cancelled all the coal blocks. Therefore, the petition with Hon’ble High Court is pending in respect of invocation of Bank Guarantee only.”

1.6.1. As per the guidelines of Coal Controller, Ministry of Coal, the Company has so far deposited in Escrow account a sum (excluding interest accrued thereon) of Rs. 33,434.84 Lakh (31st March, 2017: Rs. 20,877.30 Lakh) for following Mines.

1.06.1 As per the Mine Closure guidelines the amount is required to be deposited in Escrow Account with a scheduled bank.

While the Company has opened the Escrow accounts for five mines and for remaining one mine at Panandhro, the company is required to Deposit an amount of Rs. 9,600 lakh (approx.) in escrow account as per calculation as accepted by Office of the Coal Controller. The company is in process to open an escrow account for Panandhro mine. In the mean time, ICDs worth Rs. 9,600 lakh has been kept separately with GSFS for mine closure expenses for Panandhro mine and same has been shown as Deposits with Corporate Bodies for Mine Closure and not in escrow account. However necessary effect in the provision for mine closure will be given in the books of accounts after the acceptance of mine closure plan of said mine by Ministry of Coal, Government of India.

1.7.01 Considering the affirmations for compliance of code of conduct of GMDC given by the directors and other officers of the Company, neither trade receivables are due from directors or other officers of the Company either severally or jointly with any other person, nor any trade receivables are due from firms or private companies respectively in which any director is a partner, a director or member.

1.8.01 Assets classified as held for sale during the reporting period were measured at the carrying value on the date of such classification which approximates fair value less cost to sell. Consequently, no impairment loss was identified on these assets. There has been no material change in the value of such assets after the date of initial classification as assets classified as held for sale.

1.8.02 Rights, preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a face value of Rs. 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

During the year ended 31st March, 2018, the amount of dividend per share recognised as distributions to equity shareholders is Rs. 3 per share (31st March 2017: Rs. 3 per share).

In the events of liquidation of the Company, the holders of equity shares will be entitled to remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.9.01 The amount that can be distributed by the Company as dividends to its equity shareholders is determined considering the requirements of the Companies Act, 2013. Thus, the amounts reported above are not distributable in entirety.

1.9.02 The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within reserves representing unrealised gain/losses.

1.10.01 For majority of the security deposits received, the timing of outflow is uncertain as it depends on outcome of the underlying contracts. Thus the same has not been discounted because their present value would not represent meaningful information. The management does not believe it is possible to make assumptions for the outcome of the contract beyond the balance sheet date.

1.10.02 As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India the Company has made a provision for mines closure expenses to the tune of Rs. 41,911.40 Lakh (31st March, 2017: Rs. 37,824.04 lakh; 1st April, 2016: Rs. 33111.49 lakh) after considering the approved, submitted, prepared mine closure plans and has incurred progressive mine closure expenses of Rs. 3,509.54 Lakh (31st March, 2017: Rs. 2,997.39 Lakh; 1st April, 2016: Rs.. 2741.14 Lakh ) so far. As per the guidelines the amount so provided is required to be deposited in Escrow Account with a scheduled bank. While the Company has opened the Escrow accounts for five mines and for remaining one mine at Panandhro, ICDs worth Rs.9600 lakh has been kept separately with GSFS for mine closure expenses as per calculation accepted by the office of Coal Controller. The company is in process to open an escrow account for Panandhro mine.

1.11.01 Vide Government Resolution dated 19/11/2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs. 263.18 Lakh (31st March, 2017: Rs. 164.77 Lakh; 1st April, 2016: Rs. 166.95 Lakh ) (i.e. 80% of the basic sale price) has been transferred to GMRDS and included under the head “Other Financial Liabilities”.

1.11.02 NALCO has made upfront payment of Rs. 15,100 Lakh for setting up Allumina refinery and smelter plant in Kutchh region. Accordingly based on facts and circumstances as at 01st April,2016 the same was disclosed as other current non-financial liability. However, subsequently based on detailed project report, both the companies mutually decided not to proceed with the project. The Company has initiated the process for repayment of the amount to NALCO without interest as approved by Government of Gujarat. Accordingly the amount has been classified as a other current financial liability.

The estimates of rate of escalation in salary considered in actuarial valuation by taking into account inflation, seniority, promotion and other relevant factors including attrition rate. The above information is certified by the actuary.

b) The Company has considered certain entitlements to earned leave, which can be carried forward to future periods as a long term employee benefit.

Sensitivity Analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

1.12.01 The Government of Gujarat (GOG) has provided funds amounting to Rs. 7,524.16 Lakh (31st March, 2017: Rs. 7,399.16 Lakh;1st April, 2016: Rs. 6640.31 Lakh) which are in the nature of deposits for construction and other expenses for Stone Parks, Laboratory and Trade Fair on behalf of Commissioner of Geology & Mining (CGM) GOG. Out of the said deposits, the Company has incurred Rs. 6,252.31 Lakh (31st March, 2017: Rs. 5,710.12 Lakh;1st April, 2016: Rs. 5262.66 Lakh) till 31st March, 2018. Net balance of unutilised funds amounting to Rs. 1,271.85 Lakh (31st March, 2017: Rs. 1,689.04 Lakh;1st April, 2016: Rs. 1377.66 Lakh) is shown under the head “Other Current Non-Financial Liabilities”

1.13.01 The Company has entered into power purchase agreement with state owned entity for sale of power generated from thermal power plant located at Akrimota for original lease tenure of 30 years. The arrangement has been determined to be an operating lease as per Ind AS 17. Details of lease rental estimated to be received over the remaining contract tenure are provided below. The same have been quantified assuming plant load factor of 2017-18 remaining constant over the remaining tenure.

1.14.01 The company during the year, had earned an interest of Rs.2004.85 lakh on the fixed deposits of Rs.34062.84 lakh held in the escrow accounts for mine closure expenses and recognised this interest as income in the statement of Profit and loss for the year ended on March 31,2018. The earned interest income is part of escrow account on which the company has no hold until the provisions of mine closure plan are fulfilled.

As per guidelines of Ministry of Coal, Govt of India, up to 80% of the total deposited amount including interest accrued in the escrow account would be released to the company after every five years in proportionate to the expenditure incurred on mine closure and the balance will be released at the end of final mine closure on compliance of all the provision of mine closure plan, provided that restoration of mine is completed within the period specified, failing which the amount in the escrow account is liable to be forfeited.

1.15.01 As per the guidelines issued by the Ministry of Coal, the Company has recalculated the Mine Closure Provisions with reference to Wholesale Price Index as per the approved mine closure plan. Due to This company has written back the excess mine closure provision of Rs. Nil (2016-17: Rs. 1792.97 Lakh) during the year.

1.16.01 During the year, royalty on account of sale of Bauxite had been accounted for Rs. 675.68 Lakh (2016-17: Rs. 522.25 Lakh) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

1.16.02 In view of the Supreme Court’s decision in respect of mining activities, applications made by the Company for renewal of leases covering 2,040 (2016-17: 2,040) hectares of land for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

1.16.03 During the year, the Company has written off Rs. 23.52 Lakh (2016-17: Rs. 0.18 Lakh) and written back Rs. 57.79 Lakh (2016-17: Rs. 3.13 Lakh) in the books of accounts. In the opinion of the management, such amounts are no longer receivable / payable. Net effect thereof is written back to the Statement of Profit and Loss amounting to Rs. 34.27 Lakh (2016-17: Rs. 2.95 Lakh).

1.16.04 In compliance with Section 135(5) of the amended Companies Act, 2013, the Company has spent Rs. 2191.24 Lakh (2016-17: Rs. 1,067.49 Lakh) against the statutory requirement of spending Rs. 933 Lakh (2016-17: Rs. 1,065.49 Lakh) (based on average net profits of last 3 years) during the year towards Corporate Social Responsibility (CSR) Expense.

1.17 INCOME TAX EXPENSES

This note provides an analysis of the Company’s income tax expenses show amounts that are directly recognised in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Company’s tax positions.

1.18 CONTINGENT LIABILITIES AS ON 31ST MARCH, 2018

Contingent liabilities not provided for Claims against the Company not acknowledged as debt Rs. 54,384.89 Lakh (31st March, 2017: Rs. 61,166.99 Lakh).

1.19 EVENTS OCCURRING AFTER THE REPORTING PERIOD

The board has recommended dividend of Rs. 3.50 per share which is subject to approval of share holders in the ensuing general meeting.

1.20 In the opinion of Management, any of the assets other than items of property, plant and equipment, investment properties, intangible assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

1.21 Balances of trade payables, trade receivables, loans & advances, advances from customers, other noncurrent/current liabilities, etc. are subject to confirmation, if any, in the accounts.

1.22 On periodical basis and as and when required, the Company reviews the carrying amounts of its assets. In the Financial Year 2017-18, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.

1.23 SEGMENT INFORMATION

(a) Description of segment and principal activities

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment, and accordingly, the Company has identified two reportable operating segments viz. Mining and Power. Operating segments have been identified and reported in a manner consistent with the internal reporting provided to the CODM.

(b) Segment revenue and expenses

Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallocable”.

(c) Segment assets and liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as “Unallocable”.

(d) Secondary segment reporting

The Company does not have geographical distribution of revenue as the operations of the Company are carried out within the country and hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

(e) Information about major customers

Revenue from power segment (which exceeds 10% of total segment revenue) amounting to Rs. 39,955.04 (P.Y.: Rs. 45,965.28) Lakh is derived from a single customer and revenue from mining segment (which exceeds 10% of total segment revenue) amounting to Rs. 21,181.39 (P.Y.: Rs. 25,706.85) Lakh (inclusive of tax) is derived from a single customer.

(f) Information about product and services

The Company’s revenue from external customers for each product is same as that disclosed below under “segment revenue”.

1.24 RELATED PARTY DISCLOSURES

As per the Indian Accounting Standard-24 on “Related Party Disclosures”, details are as follows:

1.24.01 Associate/Joint Venture

As per the Indian Accounting Standard-24 on “Related Party Disclosures”, details are as follows:

*The above transactions are inclusive of all taxes, wherever applicable.

** Sitting Fees includes service tax paid under reverse charge mechanism, wherever applicable. Further, sitting fees in respect of Government nominated directors are deposited directly into Government Treasury.

1.24.02 Terms and conditions

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders. Goods were sold to related parties as mentioned above on mutually agreed terms. All outstanding balances are unsecured. The Company has executed Power Purchase Agreements with one of Government owned PSUs for sale of power generated from windmills, solar and thermal power plant for the period ranging from 25 to 30 years.

1.24.03 Other transactions with Government related entities

Apart from the above transactions, the Company has also entered into other transactions in ordinary course of business with Government related entities. These are transacted at arm’s length prices based on the agreed contractual terms.

1.24.04 Further, the Company has entered into various long term material supply and power purchase agreements with the related parties (including Government related entities) where goods/services are to be provided at prices determined based on the contractual terms agreed. Some of the contracts are in the process of being finalised pending the necessary approvals.

Types of inputs are as under:

Input Level I (Directly Observable) which includes quoted prices in active markets for identical assets such as quoted price for an equity security on Security Exchanges

Input Level II (Indirectly Observable) which includes prices in active markets for similar assets such as quoted price for similar assets in active markets, valuation multiple derived from prices in observed transactions involving similar businesses etc.

Input Level III (Unobservable) which includes management’s own assumptions for arriving at a fair value such as projected cash flows used to value a business etc.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

B. Measurement of fair values

i) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Financial instruments measured at fair value FVTOCI in unquoted equity shares:

Gujarat State Petroleum Corporation Limited

1. Market approach : This approach uses information generated by market transactions of the Company being valued or the transactions of comparable companies. The following market-linked information may be used for determining valuation under this approach.

- Quoted price of the company being valued,- Past transaction value of the company being valued,

- Listed comparable companies’ trading multiples like price to earning ratio, enterprise value to earning before interest, tax, depreciation and amortisation, enterprise value to sales etc.

- Transactions multiples for investment / M & A transaction of comparable companies.

The valuation arrived at based on the market approach reflects the current value of the Company perceived in the active market. However, as the valuation arrived at using market multiples is based on the past/current transaction or traded values of comparable companies/businesses, it may not reflect the possible changes in future trend of cash flows being generated by a business.

2. Income Approach : The income approach reflects present value of future cash flows. For valuing a business, the discounted cash flow (DCF) methodology is used under this approach. This methodology works on the premise that the value of a business is measured in terms of future cash flow streams, discounted to the present time at an appropriate discount rate. This method is used to determine the present value of business on a going concern assumption. The DCF technique recognizes the time value of money.

The value of the firm is arrived at by estimating the Free Cash Flow to Firm (FCFF) and discounting the same at the Weighted Average Cost of Capital (WACC). FCFF is estimated by forecasting free cash flows available to the firm (which are derived on the basis of the likely future earnings of the company).

3. Cost Approach: The cost approach essentially estimates the cost of replacing the tangible assets of the business. The replacement cost takes into account the market value of various assets or the expenditure required to create the infrastructure exactly similar to that of a company being valued.

Significant unobservable inputs Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cash flows used in income approach.

Inter-relationship between significant unobservable inputs and fair value measurement The estimated fair value would increase (decrease) if there is a change in significant unobservable inputs used in determination of fair value.

Considering the diverse asset and investment base of the Company with differing risk/return profiles, a sum of the parts approach has been adopted for the valuation. Under this method, the value of each distinct business/asset/investment has been arrived at separately and total value estimate for the Company presented as the sum of all its business/investments/assets.

Gujarat Guardian Limited

Fair value is determined using the ratio of enterprise value to EBIDTA adjusted for the industry average. The industry average has been computed using peer companies.

GITCO and Gujarat Informatics Limited

In absence of sufficient information for determination of fair value, the Company has determined the same using net worth as reflected in the financial statements as at the each reporting date. Management is of the view that the value so determined are reflective of the fair values.

Further, in the absence of the audited financial statements of GITCO and Gujarat Informatics Limited, the fair value is determined based on unaudited financial statement for the year ended 31st March, 2018 of GITCO and 31st March, 2017 of Gujarat Informatics Limited. Once the audited financials are available, appropriate changes would be made in the subseqnuent periods.

ii) Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the reporting periods

iii) Level 3 fair values

Movements in the values of unquoted equity instruments for the period ended 31st March, 2018 and 31st March, 2017:

Transfer out of Level 3

There were no movement in level 3 in either directions during the year 2017-18 and 2016-17.

Sensitivity analysis - Investments in unquoted equity instruments

On account of lack of sufficient information as at the end of reporting period and nature of investments, the management is of the view that it is impracticable to determine the sensitivity of the fair values to changes in the underlying assumptions.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

Rs.Credit risk ;

Rs.Liquidity risk ; and Rs.Market risk

(i) Risk management framework

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. Company has also set up a Risk Management Committee.

Looking to the profile of GMDC, i.e., Mining and Power Operations, GMDC has inbuilt risk management practices to address various operational risks. The Company has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. GMDC has no external borrowings. Hence, there is no financial risk that can impact GMDC’s Financial Position. GMDC primarily deals with natural resources. Hence, Policy of Government may impact GMDC’s operational strategy.

GMDC’s risk management process revolves around following parameters:

1. Risk Identification and Impact Assessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

4. Risk Mitigation

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.

Other financial assets

The Company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Trade and other receivables

Trade receivables of the Company are typically unsecured ,except to the extent of advance received against sales for sale of lignite. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. Significant portion of trade receivables at the respective reporting date comprise of State Governments PSUs. Management does not expect any credit risk on the same. The allowance for impairment of trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables.

The above receivables which are past due but not impaired are assessed on individual case to case basis and relate to a number of independent third party customers from whom there is no recent history of default. Management is of the view that these financial assets (majorly state owned PSUs) are not impaired as there has not been a significant change in credit quality and are recoverable based on the nature of the activity with the respective customer to which they belong and the type of customers. Further, since the amount are collected within one year, there is no loss on account of time value of money. Consequently, no additional provision has been created on account of expected credit loss on the receivables. There are no other classes of financial assets that are past due but not impaired except for trade receivables as at 31st March, 2018; 31st March, 2017 and 1st April, 2016.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.

Management estimates that there are no instances of past due or impaired trade and other receivables.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

(iv) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices -will affect the Company’s income or the value of its holdings of financial instruments.

Currency risk

The functional currency of the Company is Indian Rupees.

The Company do not use derivative financial instruments for trading or speculative purposes. As the Company does not engage in foreign exchange transaction, it is not exposed to currency risk.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company does not have any undrawn or outstanding borrowings and hence does not possess any interest rate risk.

Price Risk

The Company’s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through other comprehensive income (FVTOCI). Some of the equity investments are publicly traded and are included in the NSE Nifty 50 Index.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company’s equity and other comprehensive income for the period. The analysis is based on the assumption that the index had increased by 20% or decreased by 20% with all other variables held constant, and that the Company’s quoted equity instruments moved in line with the index. The % have been determined considering average of the actual movements in quoted prices of equity shares held as investments as at 31st March, 2018.

1.25 CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total non-current liabilities, less cash and cash equivalents. Adjusted equity comprises all components of equity.

The Company’s adjusted net debt to equity ratio at 31st March, 2018 and 31st March, 2017 was as follows.

1.26 Corresponding figures of the previous year have been re-grouped / re-arranged / re-classified / restated and revised, wherever necessary, for rounding off to nearest lakhs and/or to make them comparable with the figures of the current year.

1.27 Prior Period Errors

The Company has accounted for prior period errors discovered during current period, retrospectively by restating the comparative amounts to which the same relates. Since certain periods were prior to comparative period presented, the impact has been considered in opening balance sheet of comparative period presented.

1.28 Change in estimates

Change in useful life of Power Plant assets

The Company was using CERC (Terms & Conditions of Tariff) Regulations for depreciating its Wind, Solar and Thermal power plant assets. For all other assets depreciation was being calculated as per Schedule II of the Companies Act, 2013. From 1st April, 2017, the company has discontinued to follow CERC Regulations for depreciating the power plant assets and has charged depreciation based on useful life as prescribed in Schedule II of the Companies Act, 2013 and accordingly, has estimated the useful life of the power plant assets. This change in estimate has resulted in decrease in depreciation to the tune of Rs. 6225.37 lakh for the year ended 31st March, 2018 and increase in profit before tax for the year ended that date by the same amount. This change in estimate would also have impact on future accounting periods for which estimation is currently impracticable.

1.29 Recent Indian Accounting Standards (Ind AS) effective from 1st April, 2018

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:

- Ind AS 115 Revenue from Contracts with Customers

- Ind AS 21 The effect of changes in Foreign Exchange rates

The Company is in process of evaluation of the possible impact of new Ind AS 115 and amended Ind AS 21. The Company does not expect the impact of the adoption of the new standard to be material on its retained earnings and to its net income on an ongoing basis.

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Mar 31, 2017

2.05.01 Investments measured at fair value through Other Comprehensive Income (FVOCI) reflect investments in unquoted and quoted equity securities. Refer Note 2.45 for determination of their fair values.

2.05.02 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 Lakh number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC has agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The balance 25.45 Lakh number of shares of GACL as shown in above note have been purchased by the Company from the open market.

* Refer note 2.45 for classification

2.06.01 Naini Coal Company Ltd. is a 50:50 joint venture of GMDC and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given bank guarantee of '' 65 Crores to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Orissa. The said bank guarantee was secured by Corporate Guarantee of GMDC for an amount of '' 3250 Lakh and another '' 3250 Lakh was secured by bank guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. '' 3250 Lakh given by the Naini Coal Company Ltd. vide their letter dated 27/12/2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. GMDC had discharged its liability towards invoked bank guarantee and has accounted for the same as advance to Naini Coal Company Ltd. GMDC has already filed special civil application before the Gujarat High court against arbitrary cancellation of coal block as well as invocation of bank guarantee. The said petition is still pending before the Gujarat High Court.

* Refer note 2.45 for classification

2.11.01 Cash and Cash Equivalents include restricted cash and bank balances of '' 350.37 Lakh (31st March 2016: '' 221.73 Lakh, 1st April, 2015: '' 290.88 Lakh). The restrictions are primarily on account of cash and bank balances held as margin money, fixed deposits and unclaimed dividends.

2.11.02 Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, was not executed and an amount of '' 24.92 Lakh (31 March, 2016: '' 24.92 Lakh, 1 April, 2015: '' 24.92 Lakh) was recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmadabad.

* For the purposes of this clause, the term ''Specified Bank Notes'' 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 the 8th November, 2016.

* Refer note 2.45 for classification

2.24.01 Vide Government Resolution dated 19/11/2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs, 164.77 Lakh (31st March, 2016: Rs, 166.95 Lakh; 1st April, 2015: Rs, 79.47 Lakh) (i.e. 80% of the basic sale price) has been transferred to GMRDS and included under the head "Other Financial Liabilities".

2.24.02 NALCO has made upfront payment of Rs, 15,100 Lakh for setting up Allumina refinery and smelter plant in Kutchh region. Accordingly based on facts and circumstances on the transition date the same was disclosed as non-current non-financial liability. However, subsequently based on detailed project report, both the companies mutually decided not to proceed with the project. The Company has initiated the process for repayment of the amount to NALCO without interest subject to approval of Government of Gujarat. Accordingly the amount has been classified as a other current financial liability.

The estimates of rate of escalation in salary considered in actuarial valuation by taking into account inflation, seniority, promotion and other relevant factors including attrition rate. The above information is certified by the actuary.

b) The Company has considered certain entitlements to earned leave, which can be carried forward to future periods as a long term employee benefit.

2.26.01 The Government of Gujarat (GOG) has provided funds amounting to Rs, 7,399.16 Lakh (31st March, 2016: Rs, 6,640.31 Lakh; 1st April, 2015: Rs, 6,729.01 Lakh) which are in the nature of deposits for construction and other expenses for Stone Parks, Laboratory and Trade Fair on behalf of Commissioner of Geology & Mining (CGM) GOG. Out of the said deposits, the Company has incurred Rs,5,710.12 Lakh (31st March, 2016: Rs,5,262.66 Lakh; 1st April, 2015: Rs,4,102.48 Lakh) till 31st March, 2017. These funds have been shown as Other Liabilities. Net balance of unutilised funds amounting to Rs,1,689.04 Lakh (31st March, 2016: Rs,1,377.66 Lakh; 1st April, 2015: Rs,2,626.53 Lakh) is shown under the head "Other Non-Financial Liabilities". Details of funds received and utilized for various activities are as under:

2.34.03 During the year, the Company has written off Rs, 0.18 Lakh (P.Y.: Rs, 0.96 Lakh) and written back Rs, 3.13 Lakh (P.Y.: Nil) in the books of accounts. In the opinion of the management, such amounts are no longer receivable / payable. Net effect thereof is written back to the Statement of Profit and Loss amounting to Rs, 2.95 Lakh (P.Y.: Rs, 0.96 Lakh).

2.34.04 In compliance with Section 135(5) of the amended Companies Act, 2013, the Company has spent Rs, 1,067.49 Lakh (P.Y. Rs, 1,496.69 Lakh) against the statutory requirement of spending Rs, 1,065.49 Lakh (P.Y. Rs, 1,446.10 Lakh) (based on average net profits of last 3 years) during the year towards Corporate Social Responsibility (CSR) Expense.

2.35 INCOME TAX EXPENSES

This note provides an analysis of the Company''s income tax expenses show amounts that are directly recognized in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Company''s tax positions.

2.37 CONTINGENT LIABILITIES AS ON 31ST MARCH, 2017

Contingent liabilities not provided for Claims against the Company not acknowledged as debt Rs, 59,913.83 Lakh (31st March, 2016: Rs, 47,276.28 Lakh; 1st April, 2015: Rs, 44,106.19 Lakh).

2.37.01 GMDC acquired 656 Hectares of land for mining purpose vide Government Notification under Section 4 issued in 2003. The Land Acquisition Officer decided land price @ Rs, 14 per Sq. Mtr and Rs, 18 per Sq. Mtr respectively for nonirrigated and irrigated land. The land owners dissatisfied by the amount of compensation and approached Collector who referred the matter before the Additional City Civil Judge, Bhavnagar. The Additional Civil Judge decided the matter and increased the compensation amount to Rs, 18 per Sq. Mtr and Rs, 22 per Sq Mtr respectively for non irrigated land and irrigated land. Aggrieved by this order, GMDC filed First Appeal before the High Court and Land Owners also filed Appeal for compensation @ Rs, 110 per Sq Mtr. The High Court remanded back the matter to Additional Civil Judge, Bhavnagar. The Additional Civil Judge, Bhavnagar decided compensation @ Rs, 74 per Sq Mtr and & Rs, 78 per Sq Mtr respectively for non irrigated and irrigated land. Against the said judgement, GMDC has filed First Appeal before the Hon''ble High Court which is admitted for final hearing subject to deposition of 100% awarded amount out of which 50% amount are allowed to be withdrawn. Accordingly, GMDC has deposited total amount of Rs, 19,700 Lakh before the Additional Civil Judge, Bhavnagar Court calculated at Rs, 74 per Sq Mtr and Rs, 78 per Sq Mtr for non irrigated and irrigated land respectively. The matter is pending for final hearing before the Hon''ble High Court.As stated above the land owners have filed Cross First Appeals for compensation @ Rs, 110/- per Sq. Mtr. Therefore calculating compensation @ Rs, 110/- per Sq. Mtr, additional financial burden of approximately Rs, 13,000/

- Lakh is estimated.

2.37.02 The Company has paid compensation of Rs, 1,200.28 Lakh to land owners of Umarsar Mines at Rs, 15.60 per sq. mtr. But during February 2016, land owners have preferred the appeal before the Hon''ble Supreme Court for enhancement of compensation of Rs, 25 per sq. mtr. which comes to additional claim of Rs, 1400.00 Lakh. The matter is presently pending before the Hon''ble Supreme Court of India.

2.37.03 The Company has acquired land in village of Akrimota, Dhareshi, Fulera and Khanot of Kutch District. As per the Hon''ble High Court order dated 06.05.2014, a compensation @ Rs, 12 per Sq. Mtr amounting Rs, 2400 lakh is already paid. In the meantime, land owners have filed Special Leave Pettion bearing SLP (C) No 17977-17998 of 2016, before the Hon''ble Supreme Court of India claiming additonal compensation @ Rs, 20 per Sq. Mtr. Therefore, approximately additional compensation amounting Rs, 2400 lakh is estimated.

2.37.04 Central excise, VAT, Service tax, Income tax and other matters related to contingent liabilities:

2.39 EVENTS OCCURRING AFTER THE REPORTING PERIOD

The Board has recommended dividend of Rs, 3 per share which is subject to approval of shareholders in the ensuing Annual General Meeting.

2.40 In the opinion of Management, any of the assets other than items of property, plant and equipment, investment properties, intangible assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

2.41 Balances of trade payables, trade receivables, loans & advances, advances from customers, other non-current/current liabilities, etc. are subject to confirmation, if any, in the accounts.

2.42 On periodical basis and as and when required, the Company reviews the carrying amounts of its assets. In the Financial Year 2016-17, the Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.

2.43 SEGMENT INFORMATION

(a) Description of segment and principal activities

The Company''s management, consisting of the chief executive officer, the chief financial officer and the manager for corporate planning, monitors the operating results of the below business segments separately for the purpose of making decisions about resource allocation and performance assessment and accordingly, the Company has identified two reportable operating segments viz. Mining and Power. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

(b) Segment revenue and expenses

Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

(c) Segment assets and liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

(d) Secondary segment reporting

The Company does not have geographical distribution of revenue as the operations of the Company are carried out within the country and hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

(e) Information about major customers

Revenue from power segment (which exceeds 10% of total revenue) amounting to Rs, 45,965.28 (P.Y.: Rs, 37,641.70) Lakh is derived from a single customer and revenue from mining segment (which exceeds 10% of total revenue) amounting to Rs, 25,706.85 (P.Y.: Rs, 18,003.35) Lakh is derived from a single customer.

(f) Information about product and services

The Company''s revenue from external customers for each product is same as that disclosed below under "segment revenue".

* The above transactions are inclusive of all taxes, wherever applicable.

** Sitting Fees includes service tax paid under reverse charge mechanism, wherever applicable. Further, sitting fees in respect of Government nominated directors are deposited directly into Government Treasury.

2.44.03 Terms and conditions

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders. Goods were sold to related parties as mentioned above on mutually agreed terms. All outstanding balances are unsecured.

The Company has execeuted Power Purchase Agreements with one of Government owned PSUs for sale of power generated from windmills, solar and thermal power plant for the period ranging from 25 to 30 years.

2.44.04 Rs, 1,032.10 lakh was received during the year from Govt of Gujarat on behalf of GFEE. The same has been deposited with GSFS and shown under the head "Fund Deposited with GSFS".

2.44.06 Other transactions with Government related entities

Apart from the above transactions, the Company has also entered into other transactions in ordinary course of business with Government related entities. These are transacted at arm''s length prices based on the agreed contractual terms.

2.44.07 Further, the Company has entered into various long term material supply and power purchase agreements with the related parties (including Government related entities) where goods/services are to be provided at prices determined based on the contractual terms agreed. Some of the contracts are in the process of being finalized pending the necessary approvals.

Types of inputs are as under:

Input Level I (Directly Observable) which includes quoted prices in active markets for identical assets such as quoted price for an equity security on Security Exchanges.

Input Level II (Indirectly Observable) which includes prices in active markets for similar assets such as quoted price for similar assets in active markets, valuation multiple derived from prices in observed transactions involving similar businesses etc.

Input Level III (Unobservable) which includes management''s own assumptions for arriving at a fair value such as projected cash flows used to value a business etc.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

B. Measurement of fair values

i) Valuation techniques and significant unobservable inputs

The following tables show the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Financial instruments measured at fair value FVOCI in unquoted equity shares:

Gujarat State Petroleum Corporation Limited

1. Market approach : This approach uses information generated by market transactions of the Company being valued or the transactions of comparable companies. The following market-linked information may be used for determining valuation under this approach.

- Quoted price of the company being valued,

- Past transaction value of the company being valued,

- Listed comparable companies'' trading multiples like price to earnings ratio, enterprise value to earnings before interest, tax, depreciation and amortization, enterprise value to sales etc.

- Transactions multiples for investment / M & A transaction of comparable companies.

The valuation arrived at based on the market approach reflects the current value of the Company perceived in the active market. However, as the valuation arrived at using market multiples is based on the past/current transaction or traded values of comparable companies/businesses, it may not reflect the possible changes in future trend of cash flows being generated by a business.

2. Income Approach : The income approach reflects present value of future cash flows. For valuing a business, the discounted cash flow (DCF) methodology is used under this approach. This methodology works on the premise that the value of a business is measured in terms of future cash flow streams, discounted to the present time at an appropriate discount rate. This method is used to determine the present value of business on a going concern assumption. The DCF technique recognizes the time value of money.

The value of the firm is arrived at by estimating the Free Cash Flow to Firm (FCFF) and discounting the same at the Weighted Average Cost of Capital (WACC). FCFF is estimated by forecasting free cash flows available to the firm (which are derived on the basis of the likely future earnings of the company).

3. Cost Approach: The cost approach essentially estimates the cost of replacing the tangible assets of the business. The replacement cost takes into account the market value of various assets or the expenditure required to create the infrastructure exactly similar to that of a company being valued.

Significant unobservable inputs Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cash flows used in income approach.

Inter-relationship between significant unobservable inputs and fair value measurement The estimated fair value would increase (decrease) if there is a change in significant unobservable inputs used in determination of fair value.

Considering the diverse asset and investment base of the Company with differing risk/return profiles, a sum of the parts approach has been adopted for the valuation. Under this method, the value of each distinct business/ asset/investment has been arrived at separately and total value estimate for the Company presented as the sum of all its business/investments/assets.

Gujarat Guardian Limited

Fair value is determined using the ratio of enterprise value to EBIDTA adjusted for the industry average. The industry average has been computed using peer companies.

GITCO and Gujarat Informatics Limited

On account of absence of sufficient information for determination of fair value, the Company has determined the same using net worth as reflected in the management prepared provisional financial statements as at the each reporting date. Management is of the view that the value so determined are reflective of the fair values. Further, in the absence of the management prepared provisional financial statements of Gujarat Informatics Limited for the year 2016-17, the fair value determined on 31st March, 2016 has been carried forward. Once the same are available, appropriate changes would be made in the subsequent periods.

ii) Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the reporting periods

Transfer out of Level 3

There were no movement in level 3 in either directions during March 2017 and the year 2015-16. Sensitivity analysis - Investments in unquoted equity instruments

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

* Credit risk ;

* Liquidity risk ; and

* Market risk

(i) Risk management framework

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. Company has also set up a Risk Management Committee.

Looking to the profile of GMDC, i.e., Mining and Power Operations, GMDC has inbuilt risk management practices to address various operational risks. The Company has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. GMDC has no external borrowings. Hence, there is no financial risk that can impact GMDC''s Financial Position. GMDC primarily deals with natural resources. Hence, Policy of Government may impact GMDC''s operational strategy. GMDC''s risk management process revolves around following parameters:

1. Risk Identification and Impact Assessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

4. Risk Mitigation

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers. Other financial assets

The Company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Trade and other receivables

Significant portion of trade receivables at the respective reporting date comprise of State Governments PSUs or entities with significant government influence. Management does not expect any credit risk on the same. On the other receivables of the Company are typically unsecured, except to the extent of advance received against sales for sale of mining products. The allowance for impairment of trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables giving due consideration to the historical trends adjusted for the expected credit losses.

The above receivables which are past due but not impaired are assessed on individual case to case basis and relate to a number of independent third party customers from whom there is no recent history of default. Management is of the view that these financial assets (majorly state owned PSUs) are not impaired as there has not been a significant change in credit quality and are recoverable based on the nature of the activity with the respective customer to which they belong and the type of customers. Further, since the amount are collected within one year, there is no loss on account of time value of money. Consequently, no additional provision has been created on account of expected credit loss on the receivables. There are no other classes of financial assets that are past due but not impaired except for trade receivables as at 31st March, 2017; 31st March, 2016 and 1st April, 2015.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk, including underlying customers'' credit ratings if they are available.

Management estimates that there are no instances of past due or impaired trade and other receivables.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

(iv) Market risk

The company is exposed to price risk on account of fluctuations in prices of the imported mining products which is managed by appropriately adjusting the prices of the mining products as may be relevant.

Further, the Company''s also has exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet at fair value through other comprehensive income (FVOCI).Some of the equity investments are publicly traded and are included in the NSE Nifty 50 index.

Currency risk

The functional currency of the Company is Indian Rupees.

The Company do not use derivative financial instruments for trading or speculative purposes. As the Company does not engage in foreign exchange transaction, it is not exposed to currency risk.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company does not have any undrawn or outstanding borrowings and hence does not possess any interest rate risk.

Price Risk

The Company''s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through other comprehensive income (FVOCI). Some of the equity investments are publicly traded and are included in the NSE Nifty 50 Index.

Sensitivity

The table below summarizes the impact of increases/decreases of the index on the Company''s equity and other comprehensive income for the period. The analysis is based on the assumption that the index had increased by 20% or decreased by 20% with all other variables held constant, and that the Company''s quoted equity instruments moved in line with the index. The % have been determined considering average of the actual movements in quoted prices of equity shares held as investments for the respective periods.

2.46 CAPITAL MANAGEMENT

The Company''s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total non-current liabilities, less cash and cash equivalents. Adjusted equity comprises all components of equity.

2.47 Corresponding figures of the previous year have been re-grouped / re-arranged / re-classified / restated and revised, wherever necessary, to make them comparable with the figures of the current year.

2.48 EXPLANATION OF TRANSITION TO IND AS

These are the Company''s first consolidated financial statements prepared in accordance with Ind ASs.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31st March 2017, the comparative information presented in these financial statements for the year ended 31st March 2016 and in the preparation of an opening Ind AS balance sheet at 1st April 2015 (the Company''s date of transition).

In preparing its opening Ind AS balance sheet, the Company has adjusted amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Indian GAAP or previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position and financial performance is set out in the following tables and the notes that accompany the tables and notes:

Exemption and exception applied

In preparing these financial statements, the Company has elected to apply the below optional exemptions and mandatory exceptions in line with principles of Ind AS 101.

Optional exemptions

1. Property, Plant and Equipment (PPE), intangible assets and investment properties

Ind AS 101 provides the below options with respect to the items of PPE and intangible assets:

- Carry forward the previous GAAP carrying values as at the transition date as "deemed cost" under Ind AS, provided there is no change in functional currency.

- Fair value the items of PPE as at the transition date and use this as the "deemed cost" under Ind AS.

- Restate the carrying values of PPE retrospectively as at the transition date based on Ind AS 16.

The above options are available for investment property as well except fair value option not permitted for investment property.

The Company has opted to measure all the items of PPE, intangible assets and investment properties at the previous GAAP carrying values as at the transition date.

2. Decommissioning liabilities included in the cost of PPE

A first-time adopter need not to comply with these requirements for changes in such liabilities that occurred before the date of transition to Ind ASs. If a first-time adopter uses this exemption, it shall:

- Measure the liability at the transition date in accordance with Ind AS 37;

- Using the historical risk adjusted discount rate, determine the amount which would have been capitalised when the liability first arose; and

- Compute the amount of depreciation based on the estimated useful life.

Accordingly, the Company has elected to apply the exemption for the obligations arising on account of decommissioning cost.

3. Determining whether an arrangement contains a lease

As per Appendix C to Ind AS 17, at the inception, an assessment is to be made whether an arrangement contains a lease or not. Ind AS 101 permits an entity to make an assessment based on the facts and circumstances existing as at the transition date.

Based on the exemption, the Company has opted not to apply the requirements retrospectively. Assessment of whether an arrangement contains a lease or not has been made on the basis of facts and circumstances existing as at the transition date. Further, lease classification i.e. operating or finance lease is made at the inception of lease.

4. Accounting for equity investments

Ind AS 101 permits designation of equity investments in entities (other than subsidiaries, associates and joint arrangements) as instruments fair valued through the other comprehensive income (FVOCI).

Accordingly, the Company has opted to designate equity investments as FVOCI on the transition date.

5. Deemed cost for investments in equity shares of subsidiaries, associates and joint arrangements

Under, Ind AS 101 an entity can determine the value of investment in a subsidiary, associate or joint arrangement as either of the below:

-Cost determined in accordance with Ind AS 27 (i.e. retrospective application of Ind AS 27)

-Fair value at the entity''s date of transition to Ind AS Previous GAAP carrying amount

Mandatory exceptions

Below are the key mandatory exceptions used in preparation of these financial statements:

1. Estimates

Under Ind AS 101, an entity''s estimates in accordance with Ind AS at ''the date of transition to Ind AS'' or ''the end of the comparative period presented in the entity''s first Ind AS financial statements'', as the case may be, should be consistent with estimates made for the same date in accordance with previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

The Company''s Ind AS estimates as on the transition date are consistent with the estimates made under previous GAAP as on this date. Key estimates considered in preparation of these financial statements that were not required under the previous GAAP are listed below:

- Fair valuation of financial instruments carried at FVOCI.

- Impairment of financial assets based on the expected credit loss model.

- Determination of the discounted value for financial instruments carried at amortized cost.

- Discounted value of liability on account of decommissioning cost.

2. Classification and measurement of financial assets

Ind AS 101 provides exemptions to certain classification and measurement requirements of financial assets under Ind AS 109, where these are impracticable to implement and hence, classification and measurement needs to be done on the basis of facts and circumstances existing as on the transition date.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the transition date.

1. Proposed dividend

Under previous GAAP, the Company used to provide for proposed dividend including dividend distribution tax as and when the same is declared by the Board of Directors considering the same as adjusting event. Under Ind AS, declaration of dividend by Board of Directors would be considered as non-adjusting event and the same would be provided once it is approved by the shareholders in their general meeting. As a result, the Company recorded an increase of Rs, 11,482.12 lakh in retained earnings as on the transition date and Rs, NIL Lakh as on 31st March 2016.

2. Decommissioning liability

Under previous GAAP, the Company was not providing for constructive obligation arising from contractual terms and cost of decommissioning was expensed as incurred. However, under Ind AS, it is required to provide for constructive obligation and hence, the Company has provided for the same. In accordance with Ind AS and based on the optional exemption discussed in note 2.48, a provision for decommissioning cost in respect of wind mills on the leased land, has been recognized . Accumulated depreciation from inception till the transition date has been recognized through the retained earnings. As on transition date, the power projects capitalised net of accumulated depreciation is Rs, 869.46 Lakh and decommissioning liability is recognized at Rs, 1,267.48 Lakh. The corresponding impact is given to retained earnings. During 2015-16, the Company claimed depreciation amounting to Rs, 39.75 Lakh and unwinding of discount on decommissioning provision amounting to Rs, 101.40 Lakh.

3. Operation and Maintenance (O & M) expenses

Under previous GAAP, the Company used to record the expenses of O & M as and when incurred and accordingly, the Company used to account for nil amount during the free period of O & M contract. Under Ind AS, all the contractual payments agreed over the O & M tenure needs to be straight-lined including the free period. Hence, as on transition date, the Company has recorded non financial liability amounting to Rs, 850.50 Lakh. During 2015-16, the Company recorded decrease in O & M expenses amounting to Rs, 141.75 Lakh.

4. Fair value of investments (other than investments in subsidiary, joint venture or associates)

Under previous GAAP, the Company used to carry the investments in equity instruments companies at cost. Under Ind AS, the Company elected to fair value the same through the other comprehensive income. As a result, the Company recorded upward fair valuation of Rs, 30,496.32 Lakh as on the transition date. During 2015-16, the unrealized loss amounting to Rs, 5,838.05 Lakh is reported in the other comprehensive income.

5. Remeasurement of post-employment benefit obligations

Under Ind AS, the Company''s accounting policy is to recognize all actuarial gains and losses pertaining to post employment benefit obligations in other comprehensive income. Under previous GAAP, the Company recognized such actuarial gains and losses in the profit or loss. However, this has no impact on the total equity as on 1st April, 2015 as well as 31st March 2016. During 2015-16, the Company credited Rs, 420.15 Lakh in the other comprehensive income.

6. Prior Period Errors

Under previous GAAP, the Company used to account for the prior period items in the period in which the same arose. Under Ind AS, based on requirements of Ind AS 8, the Company has accounted for the same retrospectively by restating the comparative amounts to which the same relates. Since certain periods were prior to the transition date, the impact has been considered in prepartion of the opening balanace sheet. Consequently, this has increased the equity on the transition date by Rs, 1.70 Lakh and reduced the equity as on 31 March 2016 by Rs, 1,013.73 Lakh.

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Mar 31, 2016

1 The Government of Gujarat (GOG) has provided funds amounting to Rs, 8,740.31 Lacs (P.Y. Rs, 7,629.01 Lacs) which are in the nature of deposits for construction and other expenses for Stone Parks, Laboratory, Trade Fair and ISRC activities on behalf of Commissioner of Geology & Mining (CGM) GOG, iCEM and iCREATE . Out of the said deposits, Corporation has incurred Rs, 5,513.18 Lacs (P.Y. Rs, 4,134.78 Lacs) till 31st March, 2016. These funds have been shown as Other Liabilities. Net balance of unutilized funds amounting to Rs, 3,227.13 Lacs (P.Y. Rs, 3,494.24 Lacs) is shown under the head “Other Liabilities”.

2 Vide Government Resolution dated 19/11/2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs, 166.95 Lacs (P.Y. Rs, 79.47 Lacs) (i.e. 80% of the basic sale price) has been transferred to GMRDS and included under the head “Other Liabilities” above. 2.08.01 During the year ended 31st March, 2016, the amount of dividend per share recognized as distribution to equity shareholders was Rs, 3 per share (P.Y. Rs, 3 per share), subject to approval of share holders in ensuing Annual General Metting.

Defined Benefit Plan

a) The following table sets out the status of the gratuity plan as required under AS 15 (Revised 2005) and the reconciliation of opening balances of the present value of the defined benefit obligation.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including attrition rate. The above information is certified by the actuary.

b) Consequent to the Guidance on implementing Accounting Standard 15 “Employees Benefits” (AS-15) which clarifies the applicability of the Accounting Standard, the Corporation has considered certain entitlements to earned leave which can be carried forward to future periods as a long term employee benefit.

3. Depreciation on free hold land represents depletion on wasting assets.

4. GSECL and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities and also for general public in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs, 59.40 Lacs (P.Y. Rs, 59.40 Lacs) are accounted in the books of the Corporation and included in the respective heads of the assets

5. Fixed Assets shown above include 373 assets valuing Rs, 13.76 Crores which were commissioned long back. Corporation has taken 1st April, 1987 as an identical commissioning date for such assets.

6. Intangible assets shown above is other than internally generated intangible assets having useful life of 10 years. It is amortized as per Straight Line Method over its useful life.

7. Statement showing assets discontinued from operations awaiting disposal included in fixed assets stated above.

8. As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 Lacs number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The balance 25.45 Lacs number of shares as shown in above schedule of GACL have been purchased by the corporation from the open market.

9. The corporation has provided for diminution in respect of the investment made in Gujarat State Mining & Resources Corporation Ltd, Gujarat Jaypee Cement and Inftra Ltd. and Naini Coal Company Ltd.

10. Naini Coal Company Ltd. is a 50:50 joint venture of GMDC and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given bank guarantee of Rs, 65 Crores to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Orissa. The said bank guarantee was secured by Corporate Guarantee of GMDC for an amount of Rs, 3,250 Lacs and another Rs, 3,250 Lacs was secured by bank guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. Rs, 3,250 Lacs given by the Naini Coal Company Ltd. vide their letter dated 27/12/2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. GMDC had discharged its liability towards invoked bank guarantee and has accounted for the same as advance to Naini Coal Company Ltd.

Recently, the Supreme Court has delivered a landmark judgment cancelling all coal block allocation. GMDC has already filed special civil application before the Gujarat High court against arbitary cancellation of coal block as well as invocation of bank guarantee. The said petition is still pending before the Gujarat High Court.

11. Corporation has given Operation & Maintenance Contract to KEPCO for the Thermal Power Project from February-2013 to Feberuary-2028. As per terms and conditions of the contract, the inventory of stores, spares and parts lying at the plant in the ownership of Corporation has been given on loan to KEPCO for utilization in Operation & Maintenance activities and those inventories would be given back by KEPCO to Corporation at the end of contract.

12. As per the guidelines of Coal Controller, Ministry of Coal, the corporation has deposited in Escrow account a sum of Rs, 10,096.44 Lacs (P.Y. Rs, 945.78 Lacs) for following Mines during the Financial Year in line with the Mine Closure Plan approved by the Coal Controller.

13. Cash and Cash Equivalents as of 31st March, 2016 and 31st March, 2015 include restricted cash and bank balances of Rs, 221.72 Lacs (P.Y. Rs, 289.65 Lacs). The restrictions are primarily on account of cash and bank balances held as margin money, fixed deposits and unclaimed dividends.

14. Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, is not executed and an amount of Rs, 24.92 Lacs (P.Y. Rs, 24.92 Lacs) is recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Corporation has placed the same with Union Bank of India, Vastrapur Branch, Ahmadabad.

15. As per the Mine Closure guidelines the amount is required to be deposited in Escrow Account with a scheduled bank. While corporation has opened the Escrow accounts for four mines and for other two mines, the Corporation is having sufficient funds in the form of inter-corporate deposits (ICDs) to meet such obligation. The matter is under correspondence with the Ministry of Coal and the amount will be transferred as directed by the Ministry of Coal out of available ICDs to Escrow Accounts, on approval of mine closure plan.

16. In respect of sale of electricity by Themal Power Project, as per Power Purchase Agreement between Corporation and Gujarat Urja Vikas Nigam Ltd, the rate of Return of Equity is 13%, Normative Plant Load Factor is 75% and auxiliary consumption @ 11%.

17. As per the guidelines issued by the Ministry of Coal, the corporation has amended the Mine Closure Provisions with reference to WPI as per the approved / submitted mine closure plan. Due to this, the corporation has written back the excess mine closure provisions of Rs, 381.86 Lacs for Rajpardi Project during the year.

18. During previous year Royalty on account of sale of Bauxite had been accounted for Rs, NIL (P.Y. Rs, 466.23 lacs) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

19. In view of the Supreme CourtRs,s decision in respect of mining activities, applications made by the Corporation for renewal of leases covering 2040 (P.Y. 2040) hectares of land for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

20. During the year, corporation has written off Rs, 0.96 Lacs and written back Rs, NIL to the books of accounts. In the opinion of the management, such amounts are no longer payable / receivable. Net effect is write off to the Profit & Loss account an amount of Rs, 0.96 Lacs.

21. In compliance with Section 135(5) of the amended Companies Act, 2013, the corporation has spent Rs, 1,496.69 Lacs against the statutory requirement of spending Rs, 1,446.10 Lacs (based on average net profits of last 3 years) during the year towards Corporate Social Responsibility (CSR) Expense which mainly includes Contribution to Sardar Vallabhbhai Patel Rashtriya Ekta Trust of Rs, 1,000 Lacs and Donation To Gujarat Cancer Hospital for MRI, CT Scan & Highend Ultrasonography Machines of Rs, 345 Lacs.

22 Contingent Liabilities

Contingent liabilities not provided for Claims against the Corporation not acknowledged as debt Rs, 47,276.28 Lacs (P.Y. Rs, 44,106.19 Lacs).

23. As against claims for additional compensation of Rs, 1,000 per sq. mtr. by ex-owners of land acquired for Bhavnagar Project, District Court has partly allowed the claims of ex-land owners by Rs, 4 per sq. mtr. The Corporation has deposited Rs, 912.32 Lacs with District Court, Bhavnagar in AprilRs,14 towards this order. The Corporation has also decided to file an application before High Court against the order of District Court. Necessary adjustment shall be made in accounts after final decision/outcome of the case. During this year case is again refered to civil court in which compensation is demanded @ Rs, 85/- per sq. mtr. which comes to Rs, 2,700 Lacs. Management perceives that liability recognized by the corporation is based on the order of judicial authority and land acquisition act. Management is of the view that it is unlikely of significant increase of compensation by higher court.

24. The Honourable Supreme Court has given judgement to pay additional compensation to land owners of Rajpardi lignite mines. However, the total compensation amount has not been quantified by the Court till date. Necessary adjustment shall be made in the books as and when the amount is quantified by the court. At present, Rs, 552.31 Lacs deposited earlier are shown as Deposits with Courts.

25. Corporation has paid compensation of Rs, 1,200.28 Lacs to land owners of Umarsar Mines at Rs, 15.60 per sq. mtr. But during this Feb 16 land owners has filed the appeal with supreme court for enhancement of compensation of Rs, 25 per sq. mtr. which comes to additional claim of Rs, 1,400.00 Lacs. Management percives that liability recognized by the corporation is based on the order of judicial authority and land acquisition act. Management is of the view that it is unlikely of significant increase of compansation by higher court.

26. Income Tax : Rs, 28,524.73 Lacs (P.Y. Rs, 26,730.03 Lacs)

27. Sales Tax/ VAT : Rs, 425.45 Lacs (P.Y. Rs, 425.45 Lacs)

28. Excise : Rs, 504.39 Lacs (P.Y. Rs, 450.58 Lacs)

29 Related to Contractors and Others : Rs, 7,029.92 Lacs (P.Y. Rs, 8,896.02 Lacs)

30. Bank Guarantee/letter of credits issued by banks on behalf of the Corporation. : Rs, 37.16 Lacs (P.Y. Rs, 37.16 Lacs)

31. Royalty, Stamp duty and Conversion tax : Rs, 4,943.48 Lacs (P.Y. Rs, 4,943.48 Lacs)

32. Incentive to Employees : Rs, 1,158.84 Lacs (P.Y. Rs, 1,158.84 Lacs)

In view of the various court cases/litigations and claims disputed by the Corporation, financial impact as to outflow of resources in respect of various expenses is not ascertainable at this stage.

33 Capital and other commitments :

34. Capital Commitments

Estimated amount of Capital Contracts remaining to be executed and not provided for is Rs, 28,787.91 lacs (P.Y. Rs, 6,200.45 lacs)

35. Other Commitments

a) Corporation has entered into the Sponsor Support Agreement with Bhavnagar Energy Company Ltd (BECL), whereby corporation has given commitment to meet the Cost overrun to the extent of its share of 23.36% in BECL.

b) NALCO has made upfront payment of Rs, 15,100 Lacs for setting up Alumina Refinery & Smelter plant in Kutch region and same has been shown under the head “Other long term Liabilities”. Further, GMDC has deposited the said amount with GSFS as inter corporate deposit. GMDC will supply Bauxite, Limestone and Lignite to NALCO on a long term basis, as per terms and conditions as may be mutually agreed between the parties and subject to approval of appropriate authorities; In case the said arrangement is not materialized as per proposed agreement, then GMDC shall refund the said amount and other compensation to NALCO as admissible as per law prevailing at that time.

36. In the opinion of Management, any of the Assets other than Fixed Assets and Non-Current Investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

37 Balances of trade payables, trade receivables, loans & advances, advances from customers, other long term/current liabilities, etc. are subject to confirmation, if any, in the accounts.

38 On periodical basis and as and when required, Corporation reviews the carrying amounts of its assets. In the Financial Year 2015-16, Corporation has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.

40. SEGMENT REPORTING

The Corporation has identified two reportable segments viz. Mining and Power. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with Accounting Standard 17 on Segmental Reporting issued by the Institute of Chartered Accountants of India.

a) Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallowable”.

b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as “Unallowable”.

Notes :

1 Segment assets and liabilities are subject to reconciliation.

2 Segment Revenue of Mining includes Rs, 10,789.46 Lacs (P.Y. Rs, 8,471.20 Lacs) being captive consumption of Lignite/Lime for Power Project.

3 Inter-segment transfers of Lignite and Lime are accounted for at cost.

4 Depreciation is net off Rs, NIL (P.Y. including Rs, 181.07 Lacs) relating to previous years.

5 The operations of the Company are carried out within the country and therefore geographical segments are not applicable.

41. Related party disclosures on 31.3.2016 :

(i) List of Related parties & Relationships :

Name of Related Party Relationship

Shri Atanu Chakraborthy, IAS - Chairman upto 13th May, 2015 Key Managerial Personnel

Shri Arvind Agarwal, IAS - Chairman (w.e.f. 13th May, 2015) and CMD (w.e.f. 18th Feb, 2016)

Shri B B Swain, IAS, - Managing Director up to 23rd April, 2015 Shri Manoj Aggarwal, IAS, - Managing Director (w.e.f. 23rd April, 2015 to 15th June, 2015)

Shri Premkumar Gera, IAS, - Managing Director

(w.e.f. 15th June, 2015 to18th Feb, 2016)__

Gujarat Foundation for Entrepreneurial Excellence Associates

Gujarat Jaypee Cement Infrastructure Ltd. Joint Ventures

Gujarat Credo Mineral Industries Ltd.

Bhavnagar Energy Co. Ltd.

Aikya Chemicals Pvt. Ltd.

Swarnim Gujarat Fluorspar Pvt. Ltd.

Naini Coal Company Ltd.

GMDC Gram Vikas Trust Enterprises over which key management

Lakhpat Welfare Society personnel are able to exercise significant

GMDC Science & Research Centre influence

International Centre for Excellence in Mining Safety & Automation__

42._Corresponding figures of the previous year have been re-grouped / re-arranged and re-classified, wherever necessary, _to make them comparable with the figures of the current year._

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Mar 31, 2015

1. In line with the amended Companies Act, 2013, the corporation has changed the method of depreciation from Written Down Value Method to Straight Line Method based on useful life of asset as specified in Schedule II to the Companies Act, 2013 for all the assets of projects and corporate office except plant and machineries pertaining to power generation plant of ATPS project, solar plant and windmills during the year. As a result of this, depreciation charge of Rs. 972.15 Lakhs has been made to General Reserve to bring it in line with the amended Companies Act, 2013. This charge of Rs. 972.15 Lakhs reflect the WDV of all those assets forwhose useful life ofasset as on 31st March, 2014 is Nil.

2. As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India the Corporation has made a provision for mines closure expenses to the tune of Rs. 23535.97 Lakhs (P.Y. Rs. 26442.15 Lakhs) and has incurred progressive mine closure expenses of Rs. 2517.52 Lakhs (P.Y. Rs.1555.81 Lakhs) so far. As per the guidelines the amount so provided is required to be deposited in ESCROW Account with a scheduled bank. While corporation has opened the Escrow accounts for two mines and for other four mines, the Corporation is having sufficient funds in the form of inter-corporate deposits (ICDs) to meet such obligation. The matter is under correspondence with the Ministry of Coal and the amount will be so deposited as directed by the Ministry of Coal out of available ICDs, on approval of mine closure plan.

TRADE PAYABLES

3. Based on the information available with the corporation, there are no amounts due to suppliers covered under Micro, Small and Medium Enterprises Development Act, 2006.

4. The Government of Gujarat (GOG) has provided funds for amounting to Rs. 7629.01 Lakhs (P.Y. Rs. 6610.86 lakhs) which are in the nature of deposits for construction and other expenses for Stone Parks, Laboratory, Trade Fair and ISRC activities on behalf of Commissioner of Geology & Mining (CGM), GOG. Out of the said deposits, Corporation has incurred Rs. 4134.77 Lakhs (P.Y. Rs. 3531.86 lakhs) till 31st March, 2015. Further, the corporatoin has also received funds of Rs. 900 Lakhs (P.Y. Rs. 1000 Lakhs) from Government of Gujarat (GOG) for setting up two centres viz., iCEM and iCREATE. These funds have been shown as Other Liabilities. Net balance of unutilised funds amounting to Rs. 3494.24 Lakhs (P.Y. Rs. 3079.00 lakhs) is shown under the head "Other Liabilities".

Details of funds received and utilized for various activities are as under:

5. Vide Government Resolution dated 19/11/2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs. 79.47 lakhs (P.Y. Rs. 123.43 lakhs) (i.e. 80% of the basic sale price) has been transferred to GMRDS.

6. During the year ended 31st March, 2015, the amount of dividend per share recognised as distribution to equity shareholders was Rs. 3 per share (P.Y. Rs. 3 per share), subject to approval of share holders in ensuing Annual General Metting.

Defined Benefit Plan

a) The following table sets out the status of the gratuity plan as required under AS 15 (Revised 2005) and the reconciliation of opening balances of the present value of the defined benefit obligation.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including attrition rate. The above information is certified by the actuary.

b) Consequent to the Guidance on implementing Accounting Standard 15 "Employees Benefits" (AS-15) which clarifies the applicability of the Accounting Standard, the Corporation has considered certain entitlements to earned leave which can be carried forward to future periods as a long term employee benefit.

7. Depreciation on free hold land represents depletion on wasting assets.

8. During the year, depreciation charge of Rs. 972.15 Lakhs has been made to General Reserve to bring it in line with the amended Companies Act, 2013. This charge of Rs. 972.15 Lakhs reflect the WDV of all those assets for whose useful life of asset as on 31st March, 2014 is Nil. Further, corporation has also provided prior period depreciation amounting to Rs. 181.07 Lakhs (Net off Prior Period Depreciation expense of Rs. 1.85 Lakhs) due to change in depreciation rate as per Companies Act, 1956 and the amended useful life specified in the Companies Act, 2013. The same has been adjusted and shown separately in above table.

9. GSECL and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities and also for general public in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs. 59.40 lakhs (P.Y.Rs. 59.40 lakhs) are accounted in the books of the Corporation and included in the respective heads of the assets.

10. During the year the corporation has changed the policy from Written Down Value method to Straight Line Method based on useful life of the asset in compliance with amended Companies Act, 2013. Had the corporation not changed the method of depreciation, the depreication for the current year would have been higher by Rs. 317.42 Lakhs and profit would have been lower to that extent.

11. During the year, the corporation has undertaken physical verification exercise for all of its fixed assets located at all the projects and at corporate office. As an outcome of this exercise, 1326 number of assets having WDV of Rs. 191.57 Lakhs, were written off from the books of accounts. Further, the corporation has also recognized 151 number of surplus assets with nominal amount of Rs. 1 in the books of accounts.

12. During the Financial Year 2014-15, the corporation has changed the depreciation rates on Solar and Wind Farm projects to 5.83% from 5.28% to bring it in line with CERC Guidelines. Had it not changed the rates, the corporation's depreciation would have been lower by Rs. 1675.04 Lakhs and the Profit for the year would have been higher to that extent.

13. The corporation is in the process of undertaking impairment study of all of fixed assets. This exercise will be undertaken in the next financial year.

14. As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase the 16 Lakhs number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt, of Gujarat for its approval. The balance 25.45 lakhs number of shares as shown in above schedule of GACL have been purchased by the corporation from the open market.

15. The corporation has not provided any dimunition in respect of the investment made in subsidiary company Gujarat State Mining & Resources Corporation Ltd because the said company is in the process of reviewing its business and also to introduce fresh capital.

16. Naini Coal Company Ltd. is a 50:50 joint venture of GMDC and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given bank guarantee of Rs. 65 Crores to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Orissa. The said bank guarantee was secured by Corporate Guarantee of GMDC for an amount of Rs. 3250 lakhs and another Rs. 3250 lakhs was secured by bank guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. Rs. 3250 lakhs given by the Naini Coal Company Ltd. vide their letter dated 27/12/2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. GMDC had discharged its liability towards invoked bank guarantee and has accounted for the same as advance to Naini Coal Company Ltd. The corporation has also made provision of the same amount in its books of accounts.

Recently, the Supreme Court has delivered a landmark judgement of cancelling all the coal blocks allocation including Naini Coal Block and has also held that such allocation was void ab initio. The corporation is of the view that since the allocation of coal block has been held void ab initio, all the consequent transactions including the encashment of the bank guarantee shall also be termed as void ab initio. Hence, the corporation is in the process of filling an application to appropriate judiciary for obtaining an order to that effect.

17. Cash and Cash Equivalents as of 31st March, 2015 and 31st March, 2014 include restricted cash and bank balances of Rs. 1128.82 Lakhs and Rs. 176.67 Lakhs respectively. The restrictions are primarily on account of cash and bank balances held as escrow account margin money, fixed deposits and unclaimed dividends.

18. Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, is not executed and an amount of Rs. 24.92 Lakhs (P.Y.Rs. 24.92 Lakhs) is recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Corporation has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

19. As per the guidelines of Coal Controller, Ministry of Coal, the corporation has deposited in escrow account a sum of Rs. 945.78 Lakhs for its Umarsar Lignite Mines during the Financial Year in line with the Mine Closure Plan approved by the Coal Controller. Further, the Corporation has also opened another escrow account for its Rajpardi G-19 Amod Mines on 18th April 2015 and deposited a sum of Rs.801.02 Lakhs in the month of April 2015, in line with the Mine Closure Plan approved by the Coal Controller.

20. The corporation had sold the land at gotri in vadodara during the year 2012-13 for the payment of Rs. 1831.11 lakhs. At the time of execution of documents Rs. 183.11 lakhs was received . Balance amount of Rs. 1648 lakhs is recoverable in four equal half yearly installments. The said amount is secured by bank guarantee of Dena Bank. During the year 2014-15, the balance amount has been recovered and no dues is pending now.

21. In respect of sale of electricity, GUVNL has considered the Return on Equity, Normative Plant Load Factor and auxiliary consumption @ 13% per annum, 75% and 11% respectively as per letter dated 6.10.2006 issued by Energy and Petrochemicals Department, Government of Gujarat. However, as per Power Purchase Agreement, the rate of Return of Equity is 16%, Normative Plant Load Factor is 68.5% and auxiliary consumption @ 10%. GMDC and GUVNL has executed Supplementary Power Purchase Agreement.

22. As per the guidelines issued by the Ministry of Coal, the corporation has amended the Mine Closure Provisions with reference to WPI as per the approved / submitted mine closure plan. Due to this, the corporation has written back the excess mine closure provisions of Rs. 10916.23 Lakhs during the year.

Contingent liabilities not provided for Claims against the Corporation not acknowledged as debt T 44106.20 lakhs (P.Y. Rs. 42204.61 lakhs).

23. There is a litigation going on amongst the corporation and Ashapura Minechem Ltd (AML) regarding corporation's decision of not executing an MOU with AML due to its failure to find a strong financial partner. Aggrieved by the decision of GMDC, Ashapura Minechem Ltd. has filed an appeal with Supreme Court for appointment of Arbitrator. However, at this point of time, the corporation has not received any statement of claims from Ashapura Minechem and hence the amount of claim cannot be quanitified. Further, the corporation has decided to file review petition against the order of Hon Supreme Court for appointment of arbitrator.

24. As against claims for additional compensation of Rs. 1000 per sq. mtr. by ex-owners of land acquired for Bhavnagar Project, District Court has partly allowed the claims of ex-land owners by T 4 per sq. mtr. The Corporation has deposited T912.32 lakhs with District Court, Bhavnagar in April' 14 towards this order. The Corporation has also decided to file an application before High Court against the order of District Court. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

25. The Honourable Supreme Court has given judgement to pay additional compensation to land owners of Rajpardi lignite mines. However, the total comensation amount has not been quantified by the Court till date. Necessary adjustment shall be made in the books as and when the amount is quantified by the court. At present, T 552.31 Lakhs deposited earlier are shown as Deposits with Courts.

26. Income Tax : Rs. 26730.04 lakhs (PY. Rs 27586.75 lakhs)

27. Sales Tax/ VAT : Rs 425.45 lakhs (PY Rs. 425.45 lakhs)

28. Excise : Rs.450.58 lakhs (PY. Rs. 450.58 lakhs)

29. Related to Contractors : Rs. 8896.02 lakhs (PY Rs.4657.22 lakhs) and Others

30. Bank Guarantee/letter : Rs. 37.16 lakhs (P.Y. Rs. 57.42 lakhs) of credits issued by banks on behalf of the Corporation.

31. Royalty, Stamp duty : Rs. 4943.48 lakhs (PY Rs 4943.48 lakhs) and Conversion tax

32.Incentive to : Rs. 1158.84 lakhs (PY Rs. 1158.84 lakhs) Employees

In view of the various court cases/litigations and claims disputed by the Corporation, financial impact as to outflow of resources in respect of various expenses is not ascertainable at this stage.

33. Capital Commiments

Estimated amount of Capital Contracts remaining to be executed and not provided for T 6200.45 lakhs (P.Y. Rs. 6205.36 lakhs)

34. Other Commitments

a) Corporation has entered in to the Sponsor Support Agreement with Bhavnagar Energy Company Ltd (BECL), where by corporation has given commitment to meet the Cost overrun to the extent of its share of 26% in BECL.

b) NALCO has made upfront payment of T 15100 lakhs for setting up Alumina Refinery & Smelter plant in Kutch region and same has been shown under the head "Other long term Liabilities". Further, GMDC has deposited the said amount with GSFS as inter corporate deposit. GMDC will supply Bauxite, Limestone and Lignite to NALCO on a long term basis, as per terms and conditions as may be mutually agreed between the parties and subject to approval of appropriate authorities; In case the said arrangement is not materialized as per proposed agreement, then GMDC shall refund the said amount and other compensation to NALCO as admissible as per law prevailing at that time.

35. In the opinion of Management, any of the Assets other than Fixed Assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

36. Balances of trade payables, trade receivables, loans & advances, advances from customers, other long term/current libilities, etc. are subject to confirmation, if any, in the accounts.

37. On periodical basis and as and when required, Corporation reviewes the carrying amounts of its assets. In the Financial Year 201213, Corporation had reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.

38. SEGMENT REPORTING

The Corporation has identified two reportable segments viz. Mining and Power. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with Accounting Standard 17 on Segmental Reporting issued by the Institute of Chartered Accountants of India.

a) Revenue and expenses have been identifed to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

(i) List of Related parties & Relationships :

Name of Related Party Relationship

Shri D.J. Pandian, IAS - Chairman up to December 30' 2014

Shri Atnu Chakraborthy, IAS - Chairman

Shri B B Swain, IAS, - Managing Director (w.e.f. 01st November 2014) Key Managerial Personnel

Shri Pankaj Kumar, IAS - Managing Director up to August 25, 2014

Shri D J Pandian, IAS - Managing Director - up to October 31, 2014

Gujarat Foundation for Entrepreneurial Excellence Associates

Gujarat Jaypee Cement Infrastructure Ltd.

Gujarat Credo Mineral Industries Ltd.

Bhavnagar Energy Co. Ltd.

Joint Ventures

Aikya Chemicals Pvt. Ltd.

Swarnim Gujarat Flourspar Pvt. Ltd.

Naini Coal Company Ltd.

Gujarat Mining & Resources Corporation Ltd. Subsidiary company

GMDC Gram Vikas Trust Enterprises over which key management personnel are able to exercise Lakhpat Welfare Society significant influence

GMDC Science & Research Centre

39. Corresponding figures of the previous year have been re-grouped / re-arranged and re-classified, wherever necessary, to make them comparable with the figures of the current year.

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Mar 31, 2014

1. PRE-OPERATIVE EXPENSES ON MINING PROJECTS:

Pre-operative Expenses of Mines/Mining Projects under implementation incurred upto the date of commencement of the production on commercial basis are written off in the year in which they are incurred.

2. IMPAIRMENT OF ASSETS:

An asset is treated as impaired when carrying cost of asset exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed, if there has been a change in estimate of recoverable amount. In case of intangible assets, the same will be tested on periodical basis for impairment.

3. REHABILITATION AND RESETTLEMENT EXPENSES:

Rehabilitation and Resettlement Expenses are charged as revenue in the year in which they are incurred.

4. AFFORESTATION EXPENSES:

Afforestation Expenses are charged as revenue to the extent they are incurred by the respective departments.

5. MINE CLOSURE EXPENSES FOR LIGNITE MINES:

a) Progressive mine closure expenses are accounted for as and when incurred.

b) The annual cost of final mine closure is calculated and accounted for considering the useful life of the mines on the basis of approved final mine closure plans otherwise annual cost is calculated on the basis of draft mine closure plans submitted to the Ministry of Coal, GOI or on the basis of technical estimations for mines for which draft mine closure plans have not been submitted.

6. EVENTS OCCURING AFTER THE BALANCE SHEET DATE:

Material adjusting events (that provide evidence of conditions that existed at the balance sheet date) occurring after the balance sheet date are recognized in the financial statements. Non adjusting events (that are indicative of conditions that arose subsequent to the balance sheet date) occurring after the balance sheet date that represent material change and commitment affecting the financial position are disclosed in the reports of the Board of Directors.

7. PROPOSED DIVIDEND:

Provision is made in accounts for proposed dividend, subject to approval of shareholders in annual general meeting.

2.05.01 As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India the Corporation has made a provision for mines closure expenses to the tune of Rs. 26,442.15 Lakhs (P.Y. Rs. 21,317.56 Lakhs) and has incurred progressive mine closure expenses of Rs. 1,555.81 Lakhs (P Y Rs. 656.63 Lakhs) so far. As per the guidelines the amount so provided is required to be deposited in ESCROW Account with a bank. The company is having sufficient funds in the form of inter-corporate deposits (ICDs) to meet such obligation. The matter is under correspondence with the Ministry of Coal and the amount will be so deposited as directed by the Ministry of Coal out of available ICDs.

2.06.01 Based on the information available with the corporation, there are no amounts due to suppliers covered under Micro, Small and Medium Enterprises Development Act, 2006.

2.07.01 The Government of Gujarat (GOG) has provided funds for amounting to Rs. 5,610.86 Lakhs (P.Y. Rs. 3,758.85 Lakhs) which are in the nature of deposits for construction and other expenses for Stone Parks, Laboratory, Trade Fair and ISRC activities on behalf of Commissioner of Geology & Mining (CGM), GOG. Out of the said deposits, Corporation has incurred Rs. 3,531.85 Lakhs (P.Y. Rs. 2,616.70 Lakhs) till 31st March, 2014. Net balance of unutilised funds amounting to Rs. 2,079.01 Lakhs (P.Y. Rs. 1,142.15 Lakhs) is shown under the head "Other Liabilities". Details of funds received and utilized for various activities are as under:

2.07.02 Vide Government Resolution dated 19.11.2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs. 123.43 Lakhs (P.Y. Rs.. 149.48 Lakhs) (i.e. 80% of the basic sale price) has been transferred to GMRDS.

2.08.01 During the year ended 31st March, 2014, the amount of dividend per share recognised as distribution to equity shareholders was Rs. 3 per share (P.Y. Rs. 3 per share), subject to approval of shareholders in ensuing Annual General Meeting.

2.08.02 Employee Benefits

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below :

Defined Benefit Plan

a) The following table sets out the status of the gratuity plan as required under AS 15 (Revised 2005) and the reconciliation of opening balances of the present value of the defined benefit obligation.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including attrition rate. The above information is certified by the actuary.

b) Consequent to the Guidance on implementing Accounting Standard 15 "Employees Benefits" (AS-15) which clarifies the applicability of the Accounting Standard, the Corporation has considered certain entitlements to earned leave which can be carried forward to future periods as a long term employee benefit.

2.09.01 Depreciation on free hold land represents depletion on wasting assets.

2.09.02 Depreciation is net off Rs. 85.36 Lakhs (P.Y. including Rs. 12.06 Lakhs) relating to previous years including depreciation of Rs.19.93 Lakhs on addition in intengible assets (ERP) amounting to Rs. 31.40 Lakhs.

2.09.03 GSECL and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs. 59.40 Lakhs (P.Y. Rs. 59.40 Lakhs) are accounted in the books of the Company and included in the respective heads of the assets.

2.09.05 During the current year the Corporation has changed the policy for provision of depletion.Now onwards it will be based on geological reserve submitted in mine closure plan. Had the corporation continued with earlier policy of the mineable reserve used in previous year then depletion charged during the current year would have been higher by Rs. 45.63 Lakhs and profit before tax and net fixed assets would have been lower to that extent. Due to change in the policy, the corporation has accounted for reduction in provision of Rs. 99.81 Lakhs accounted as prior period income.

2.10.04 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase the 16 Lakhs number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The balance 25.45 Lakhs number of shares as shown in above schedule of GACL have been purchased by the corporation from the open market.

2.10.05 Naini Coal Company Ltd. is a 50:50 joint venture of GMDC and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given bank guarantee of Rs. 65 Crores to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Orissa. The said bank guarantee was secured by Corporate Guarantee of GMDC for an amount of Rs. 3,250 Lakhs and another Rs. 3,250 Lakhs was secured by bank guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. Rs. 3,250 Lakhs given by the Naini Coal Company Ltd. vide their letter dated 27.12.2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. GMDC had discharged its liability towards invoked bank guarantee and has accounted for the same as advance to Naini Coal Company Ltd. The Company has made provision of Rs. 2,038.12 Lakhs towards advances of Rs. 2,035.62 Lakhs and investments of Rs. 2.50 Lakhs respectively in F.Y. 2012-13, which has been shown as "Exceptional Items" in Statement of Profit & Loss. Meanwhile, company has filed petition in high court against the order of Government of India.

2.15.01 Cash and Cash Equivalents as of 31st March, 2014 and 31st March, 2013 include restricted cash and bank balances of Rs. 176.67 Lakhs and Rs. 164.07 Lakhs respectively. The restrictions are primarily on account of cash and bank balances held as margin money, fixed deposits and unclaimed dividends.

2.15.02 Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, is not executed and an amount of Rs. 24.92 Lakhs (P.Y.Rs. 24.92 Lakhs) is recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

2.17.01 The corporation had sold the land at Gotri in Vadodara during the year 2012-13 for the payment of Rs. 1,831.11 Lakhs. At the time of execution of documents Rs. 183.11 Lakhs was received. Balance amount of Rs. 1,648 Lakhs is recoverable in four equal half yearly installments. The said amount is secured by bank guarantee of Dena Bank. During the year 2013-14 two installments have been received.

2.18.01 In respect of sale of electricity, GUVNL has considered the Return on Equity, Normative Plant Load Factor and auxiliary consumption @ 13% per annum, 75% and 11% respectively as per letter dated 6.10.2006 issued by Energy and Petrochemicals Department, Government of Gujarat. However, as per Power Purchase Agreement, the rate of Return of Equity is 16%, Normative Plant Load Factor is 68.5% and auxiliary consumption @ 10%. GMDC and GUVNL are in the process of execution of Supplementary Power Purchase Agreement. Pending such execution and finalization, the revenue has been booked on the basis of amount paid by GUVNL against electricity bills and adjustment of U.I. charges. Necessary adjustment, if any, shall be made in accounts after final outcome of the matter.

2.22.01 Royalty on account of sale of Bauxite has been accounted for Rs. 251.17 Lakhs (P.Y. Rs. 1,130.46 Lakhs) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

2.22.02 In view of the Supreme Court''s decision in respect of mining activities, applications made by the Corporation for renewal of leases covering 2,040 (P.Y. 2,040) hectares of land for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

2.23 Contingent Liabilities

Contingent liabilities not provided for Claims against the Corporation not acknowledged as debt Rs. 42,204.61 Lakhs (P.Y. Rs. 99,083.65 Lakhs).

2.23.01 The ex-owners of land acquired for the Akrimota Project of the Corporation have filed suits for enhancement of compensation awarded by the order of the competent authority and the value of enhancement claimed is Rs. 773.52 Lakhs upto 31st March, 2014 (P.Y. Rs. 773.52 Lakhs). Necessary adjustment shall be made in accounts after final decision/outcome of the case.

2.23.02 As against claims for additional compensation of Rs. 1,000 per sq. mtr. by ex-owners of land acquired for Bhavnagar Project, District Court has partly allowed the claims of ex-land owners by Rs. 4 per sq. mtr. The Corporation has deposited Rs. 912.32 Lakhs with District Court, Bhavnagar in April''14 towards this order. The Corporation has also decided to file an application before High Court against the order of District Court. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

2.23.03 Claims for additional compensation against acquisition of land at Rajpardi and Panandhro for mining activities of the Corporation are under litigation before the Hon''ble Gujarat High Court. Pending the final disposal of the matters by the Hon''ble High Court Rs. 1,239.03 Lakhs (P.Y. Rs. 1,239.03 Lakhs) has been deposited and shown under the head ''Deposits with various Courts''. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

2.23.04 Income Tax : Rs. 27,586.75 Lakhs (P.Y. Rs. 24,062.98 Lakhs)

2.23.05 Sales Tax/ VAT : Rs. 425.45 Lakhs (P.Y. Rs. 425.45 Lakhs)

2.23.06 Excise : Rs. 450.58 Lakhs (P.Y. Rs. 450.58 Lakhs)

2.23.07 Related to Contractors and Others : Rs. 4,657.22 Lakhs (P.Y. Rs. 5,548.22 Lakhs)

2.23.08 Bank Guarantee/letter of credits issued by banks on behalf of the Corporation. : Rs. 57.42 Lakhs (P.Y. Rs. 121.88 Lakhs)

2.23.09 Royalty, Stamp duty and Conversion tax : Rs. 4,943.48 Lakhs (P.Y. Rs. 4,466.88 Lakhs)

2.23.10 Incentive to Employees : Rs. 1,158.84 Lakhs (P.Y. Rs. 1,158.84 Lakhs)

In view of the various court cases/litigations and claims disputed by the Corporation,financial impact as to outflow of resources in respect of various expenses is not ascertainable at this stage.

2.24 Capital and other commitments :

2.24.01 Capital Commiments

Estimated amount of Capital Contracts remaining to be executed and not provided for Rs. 6,205.36 Lakhs (P.Y. Rs. 9,844.86 Lakhs)

2.24.02 Other Commitments

a) Corporation has entered in to the Sponsor Support Agreement with Bhavnagar Energy Company Ltd (BECL), whereby corporation has given commitment to meet the Cost overrun to the extent of its share of 26% in BECL.

b) NALCO has made upfront payment of Rs. 15,100 Lakhs for setting up Alumina Refinery & Smelter plant in Kutch region and same has been shown under the head "Other long term Liabilities". Further, GMDC has deposited the said amount with GSFS as inter corporate deposit. GMDC will supply Bauxite, Limestone and Lignite to NALCO on a long term basis, as per terms and conditions as may be mutually agreed between the parties and subject to approval of appropriate authorities; In case the said arrangement is not materialized as per proposed agreement, then GMDC shall refund the said amount and other compensation to NALCO as admissible as per law prevailing at that time.

2.26 In the opinion of Management, any of the Assets other than Fixed Assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

2.27 Balances of trade payables, trade receivables, loans & advances, advances from customers, other long term/current libilities, etc. are subject to confirmation, if any, in the accounts.

2.28 As at the Balance Sheet date Corporation has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.

2.30 SEGMENT REPORTING

The Corporation has identified two reportable segments viz. Mining and Power. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with accounting policy of the corporation with the following additional policies for segment reporting.

a) Revenue and expenses have been identifed to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

2.32 Corresponding figures of the previous year have been re-grouped / re-arranged and re-classified, wherever necessary, to make them comparable with the figures of the current year.

2.33 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956 subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the consolidated financial statements.

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Mar 31, 2013

1.01.01 As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India, the Corporation has made a provision for mines closure expenses to the tune of Rs.. 20,660.93 lakhs (P.Y. Rs.. 20,062.43 lakhs) so far. As per the guidelines the amount so provided is required to be deposited in ESCROW Account with a bank. The company is having sufficient funds in the form of inter-corporate deposits (ICDs) to meet such obligation. The matter is under correspondence with the Ministry of Coal and the amount will be so deposited as directed by the Ministry of Coal out of available ICDs.

1.02.01 There are no amounts due to suppliers covered under Micro, Small and Medium Enterprises Development Act, 2006. This information takes into account only those suppliers who have responded to the enquiries made by the company for this purpose.

1.03.01 The Government of Gujarat (GOG) has provided funds amounting to Rs.. 2,876.95 lakhs (P.Y. Rs.. 2,226.95 lakhs) which is in the nature of deposit for construction of Stone Parks on behalf of Commissioner of Geology & Mining (CGM), GOG. Out of the said deposits, Corporation has incurred Rs.. 2,221.60 lakhs (P.Y.Rs.. 1,788.11 lakhs) till 31st March, 2013. Amount received from GOG for construction of stone parks and expenditure incurred against the same are shown under the heads "Other Liabilities" and "Other Loans & Advances" respectively

1.03.02 The GOG has provided funds amounting to Rs.. 850.40 (P.Y. Rs.. 739.40 lakhs) which is in the nature of deposit for construction of laboratory building on behalf of CGM. Out of the said deposits, Corporation has incurred Rs.. 395.11 lakhs (P.Y. Rs.. 6.07 lakhs) till 31st March, 2013. Amount received from GOG for construction of laboratory building and expenditure against the same are shown under the heads "Other Liabilities" and "Loans & Advances" respectively.

1.03.03 Vide Government Resolution dated 19.11,2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs. 149.48 lakhs (P.Y. Rs. 198.16 lakhs) (i.e. 80% of the basic sale price) has been transferred to GMRDS.

1.04.01 During the year ended 31st March, 2013, the amount of dividend per share recognised as distribution to equity shareholders was Rs.. 3 per share (P.Y Rs.. 3 per share), subject to approval of shareholders in ensuing Annual General Meeting

1.05.01 GSECL and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs.. 59.40 lakhs (P.Y. Rs.. 59.40 lakhs) are accounted in the books of the Company and included in the respective heads of the assets.

1.05.02 During the year, the company has changed method of depreciation on plant and machinery of solar project from written down value method to straight line method as prescribed in Schedule XIV to the Companies Act, 1956. Had the company continued to provide depreciation for plant and machinery of solar project on written down value method, depreciation charged during the current year would have been higher by Rs.. 535.05 lakhs as well as profit and net fixed assets would have been lower to that extent.

1.06.01 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase all the shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt, of Gujarat for its approval.

1.06.02 Naini Coal Company Ltd. is a 50:50 joint venture of GMDC and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given bank guarantee of t. 65 Crores to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Orissa. The said bank guarantee was secured by Corporate Guarantee of GMDC for an amount of Rs.. 3250 Lakhs and another Rs.. 3250 Lakhs was secured by bank guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. Rs.. 3250 Lakhs given by the Naini Coal Company Ltd. vide their letter dated 27.12.2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. GMDC has discharged its liability towards invoked bank guarantee and has accounted for the same as advance to Naini Coal Company Ltd. Total advance given to Naini Coal Company Ltd. as on 31st March, 2013 amounts to 2035.62 Lakhs. The Company has made provision of Rs.. 2038.12 Lakhs towards advances of Rs.. 2035.62 Lakhs and investments of 2.50 lakhs respectively, which has been shown as "Exceptional Items" in Statement of Profit & Loss. Meanwhile, company has filed petition in high court against the order of Government of India.

1.07.01 Cash and Cash Equivalents as of 31st March, 2013 and 31st March, 2012 include restricted cash and bank balances of Rs..164.07 lakhs and t. 143.62 lakhs respectively. The restrictions are primarily on account of cash and bank balances held as margin money, fixed deposits with more than 3 months maturity and unclaimed dividends.

1.07.02 Pending clearance of the title of the land, sale deed in respect of the land of the Cement Plant at Hadad sold earlier, is not executed and an amount of Rs.. 24.92 lakhs (P.Y. Rs.. 24.92 lakhs) is recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

1.08.01 The possession of the Corporation''s Guest-house at Bhuj given to Tourism Corporation of Gujarat Limited (TCGL) on 6.8.2002 against proposed sale in terms of letter No GMC-102002-415-CHH.1 dated 10.6.2002 of Ministry of Industries and Mines, Government of Gujarat has been returned to the Corporation on 28.2.2006 in terms of letter No TDC-102001-929-S dated 26.10.2005. TCGL during the period of possession has let out some portion of the Guest house. The Corporation is taking necessary steps with TCGL and the Government of Gujarat for recovery of rent for the period of possession, maintenance expenditure, gram panchayat tax and rent recovery from the tenants, which is in process. The said recoveries will be considered in accounts on finalization of negotiations with TCGL and the State Government.

1.09.01 In respect of sale of electricity, GUVNL has considered the Return on Equity, Normative Plant Load Factor and auxiliary consumption @ 13% per annum, 75% and 11% respectively as per letter dated 6.10.2006 issued by Energy and Petrochemicals Department, Government of Gujarat. However, as per Power Purchase Agreement, the rate of Return of Equity is 16%, Normative Plant Load Factor is 68.5% and auxiliary consumption @ 10%. GMDC and GUVNL are in the process of execution of Supplementary Power Purchase Agreement. Pending such execution and finalization, the revenue has been booked on the basis of amount paid by GUVNL against electricity bills and adjustment of U.l. charges. Necessary adjustment shall be made in accounts after final outcome of the matter.

1.11.01 Royalty on account of sale of Bauxite has been accounted for Rs..1,130.46 Lakhs (P.Y. 1,120.24 lakhs) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

1.12.02 In view of the Supreme Court''s decision in respect of mining activities, applications made by the Corporation for renewal of leases covering 2040 (P.Y. 2040) hectares of land for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

1.13 Contingent Liabilities

Contingent liabilities not provided for Claims against the Corporation not acknowledged as debt Rs.. 99,083.65 lakhs (P.Y. Rs.. 1,01,119.33 lakhs).

1.13.01 The ex-owners of land acquired for the Akrimota Project of the Corporation have filed suits for enhancement of compensation awarded by the order of the competent authority and the value of enhancement claimed is Rs.. 773.52 lakhs upto 31st March, 2013 (P.Y. Rs..773.52 lakhs). Necessary adjustment shall be made in accounts after final decision/outcome of the case.

1.13.02 The company has acquired total 78.54 Lakhs Sq. Mtrs. at Rs.. 2,088.38 Lakhs as awarded by the competent authority for the Bhavnagar Project, out of which land owners possessing land of 60.84 Lakhs Sq. mtrs. have filed suit for enhancement of compansation. The value of enhancement claimed is Rs.. 60,836.27 lakhs up to 31st March, 2013 (P.Y. Rs.. 60,836.27 lakhs),which is almost 37 times higher than amount of original award and the same is unrealistic. cessary adjustment shall be made in accounts after final decision/outcome of the case.

1.13.03 Claims for additional compensation against acquisition of land at Rajpardi and Panandhro for mining activities of the Corporation are under litigation before the Hon''ble Gujarat High Court. Pending the final disposal of the matters by the Hon''ble High Court Rs.. 1,239.03 lakhs (P.Y. Rs..1,239.03 lakhs) has been deposited and shown under the head ''Deposits with various Courts''. Necessary adjustment shall be made in accounts after final decision /outcome of the case.

1.13.04 Income Tax : Rs.. 24,062.98 lakhs (P.Y. Rs.. 24,166.30 lakhs)

1.13.05 Sales Tax/ VAT : Rs.. 425.45 lakhs (P.Y. Rs.. 453.94 lakhs)

1.13.06 Excise : Rs.. 450.58 lakhs (P.Y. Rs.. 450.58 lakhs)

1.13.07 Related to Contractors and Others : Rs.. 5,548.22 lakhs (P.Y. Rs.. 4,295.92 lakhs)

1.13.08 Bank Guarantee/letter of credits issued by banks on behalf of the Corporation/Corporate Guarantees given by GMDC on behalf of JV company : Rs.. 121.88 lakhs (P.Y. Rs.. 3,278.05 lakhs)

1.13.09 Royalty, Stamp duty and Conversion tax : Rs.. 4,466.88 lakhs (P.Y. Rs.. 4,466.88 lakhs)

1.13.10 Incentive to Employees : Rs.. 1,158.84 lakhs (P.Y. Rs.. 1,158.84)

In view of the various court cases/litigations and claims disputed by the Company, financial impact as to outflow of resources in respect of various expenses is not ascertainable at this stage.

1.14 Capital and other commitments :

1.14.01 Capital Commiments

Estimated amount of Capital Contracts remaining to be executed and not provided for Rs. 9,844.86 lakhs (P.Y. Rs.. 1,717.73 lakhs)

1.14.02 Other Commitments

a) Corporation has entered into the Sponsor Support Agreement with Bhavnagar Energy Company Ltd (BECL), whereby corporation has given commitment to meet the Cost overrun to the extent of its share of 26% in BECL.

b) NALCO has made upfront payment of Rs.. 15,100 lakhs for setting up Alumina Refinery & Smelter plant in Kutch region and same has been shown under the head "Other long term Liabilities". Further, GMDC has deposited the said amount with GSFS as inter corporate deposit. GMDC will supply Bauxite, Limestone and Lignite to NALCO on a long term basis, as per terms and conditions as may be mutually agreed between the parties and subject to approval of appropriate authorities; In case the said arrangement is not materialized as per proposed agreement, then GMDC shall refund the said amount and other compensation to NALCO as admissible as per law prevailing at that time.

1.15 In the opinion of Management, any of the Assets other than Fixed Assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

1.16 Balances of trade payables, trade receivables, loans & advances, advances from customers, other long term/current libilities, etc. are subject to reconciliation and adjustments, if any, in the accounts.

1.17 As at the Balance Sheet date Company has reviewed the carrying amounts of its assets and found that there is no indication that those assets have suffered any impairment loss. Hence, no such impairment loss has been provided.

1.18 SEGMENT REPORTING

The Corporation has identified two reportable segments viz. Mining and Power. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with accounting policy of the corporation with the following additional policies for segment reporting.

a) Revenue and expenses have been identifed to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable''''.

b) Segment assets and segment liabilities represent assets and liabilities in respective segments.Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

1.19 Corresponding figures of the previous year have been re-grouped / re-arranged and re-classified, wherever necessary, to make them comparable with the figures of the current year.

1.20 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956 subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the consolidated financial statements.

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Mar 31, 2012

1.01.01 Considering the revised guidelines dated 11th January, 2012 for preparation of mine closure plan, letter of Ministry of Coal, Government of India (GOI) dated 19th March, 2012 and draft mine closure plans submitted to the GOI, the corporation has changed the policy for provision for mines closure expenses.

As per the policy upto F.Y. 2010-11, such provision was made considering the useful life of mines on the basis of actual reserves, annual production, etc. and technical estimates or 25 years useful life of the mines, whichever is lower. From the F.Y. 2011-12, the corporation has made such provision considering the useful life of the mines on the basis of draft mine closure plans submitted to the Ministry of Coal, GOI for five mines and on the basis of technical estimations for remaining one mine. However, necessary adjustments, if required, shall be made in books of accounts after getting approval of GOI.

Had the Corporation continued the old policy for provision of mines closure expenses, expenses for the current year would have been lower by Rs. 1209.31 lakhs and profit would have been higher to that extent and provisions would have been lower to that extent.

1.01.02 As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India the Corporation has made a provision for mines closure expenses to the tune of Rs. 20062.43 lakhs upto 31st March, 2012. As per the guidelines the amount so provided is required to be deposited in ESCROW Account with a bank. The company is having sufficient funds in the form of inter-corporate deposits (ICDs) with GSFS to meet such obligation. The matter is under correspondence with the Ministry of Coal and the amount will be so deposited as directed by the Ministry of Coal out of available ICDs.

1.02.01 As required, the provisions of interest on delayed payment to Small & Medium Enterprises under the Micro, Small & Medium Enterprises Development Act, 2006, the company has not received memorandum as required to be filled by the supplier with the notified authorities under Micro, Small & Medium Enterprises Act claiming their status as Micro, Small & Medium Enterprises.

1.03.01 The Government of Gujarat (GOG) has provided funds amounting to Rs. 2226.95 lakhs which is in the nature of deposit for construction of Stone Parks on behalf of Commissioner of Geology & Mining (CGM), GOG. Out of the said deposits, Corporation has incurred Rs. 1788.11 lakhs till 31st March, 2012. Amount received from GOG for construction of stone parks and expenditure incurred against the same are shown under the heads "Other Liabilities" and "Other Loans & Advances" respectively.

1.03.02 The GOG has provided funds amounting to Rs. 739.40 lakhs which is in the nature of deposit for construction of for construction of laboratory building on behalf of CGM. Out of the said deposits, Corporation has incurred Rs. 6.07 lakhs till 31st March, 2012. Amount received from GOG for construction of laboratory building and expenditure against the same are shown under the heads "Other Liabilities" and "Loans & Advances" respectively.

1.03.03 Vide Government Resolution dated 19/11/2009, GMDC has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose the same for which GMDC will be entitled to retain 20% of the sale price. GMDC has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, Rs. 198.16 lakhs (P.Y. Rs. 110.24 lakhs) (i.e. 80% of the basic sale price) has been transferred to GMRDS.

1.04.01 During the year ended 31st March, 2012, the amount of dividend per share recognised as distribution to equity Shareholders was Rs. 3 per Share (P. Y. Rs. 3 per Share)

1.04.02 Employee Benefits

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below :

1.05.01 GSECL and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs. 59.40 lakhs (P.Y. Rs. 59.40 lakhs) are accounted in the books of the Corporation and included in the respective heads of the assets.

1.05.02 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase all the shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval.

1.06.01 Gujarat State Road Transport Corporation Limited (GSRTC) has paid 1% residual value of Rs. 20.03 lakhs of 254 buses given on lease as per Agreement between GMDC and GSRTC dated 21.10.1999. Accordingly, corporation has completed formalities for transferring these buses in favour of GSRTC and it has also agreed to pay Rs. 254 lakhs on ad hoc basis towards overdue lease rentals as against the total amount of outstanding lease rentals of Rs. 981 lakhs due as on 31st March, 2012. For the balance amount, the matter shall be taken up with appropriate authorities. The management is hopeful for recovery of outstanding amount.

1.07.01 During the year, the Corporation has changed the method of valuation of inventories of stores, spares and loose tools from cost at FIFO basis to weighted average cost method. Had the Corporation continued the method of valuation of inventories on FIFO basis, expenses for the current year would have been higher by Rs. 0.41 lakhs and inventories as well as profit would have been lower to that extent.

1.08.01 Cash and Cash Equivalents as of 31st March, 2012 and 31st March, 2011 include restricted cash and bank balances of Rs. 143.61 lakhs and Rs. 238.70 lakhs respectively. The restrictions are primarily on account of cash and bank balances held as margin money, fixed deposits with more than 3 months maturity and unclaimed dividends.

1.08.02 Pending clearance of the title of the land, sale deed in respect of the land of the Cement Plant at Hadad sold earlier, is not executed and an amount of Rs. 24.92 lakhs (P.Y.Rs. 24.92 lakhs) is recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

1.09.01 The possession of the Corporation's Guest-house at Bhuj given to Tourism Corporation of Gujarat Limited (TCGL) on 6.8.2002 against proposed sale in terms of letter No GMC-102002-415-CHH.1 dated 10.6.2002 of Ministry of Industries and Mines, Government of Gujarat has been returned to the Corporation on 28.2.2006 in terms of letter No TDC-102001-929-S dated 26.10.2005. TCGL during the period of possession has let out some portion of the Guesthouse. The Corporation is taking necessary steps with TCGL and the Government of Gujarat for recovery of rent for the period of possession, maintenance expenditure, gram panchayat tax and rent recovery from the tenants, which is in process. The said recoveries will be considered in accounts on finalization of negotiations with TCGL and the State Government.

1.10.01 During the year, the Corporation has changed the accounting policy for capital expenditure incurred on roads, river diversion work and shifting of electrical lines, etc. Till last year, the same were amortized for a period of five years. Now the company has written off the outstanding balance in the current year. Had the Corporation continued the earlier policy of amortization of said expenditure, the expenses for the year would have been lower by Rs. 468.45 lakhs and profit for the year as well as assets would have been higher to that extent.

1.11.01 In respect of sale of electricity, GUVNL has considered the Return on Equity, Normative Plant Load Factor and auxiliary consumption @ 13% per annum, 75% and 11% respectively as per letter dated 6.10.2006 issued by Energy and Petrochemicals Department, Government of Gujarat. However, as per Power Purchase Agreement, the rate of Return of Equity is 16%, Normative Plant Load Factor is 68.5% and auxiliary consumption @ 10%. GMDC and GUVNL are in the process of execution of Supplementary Power Purchase Agreement. Pending such execution and finalization, the revenue has been booked on the basis of amount paid by GUVNL against electricity bills and adjustment of U.I. charges. Necessary adjustment shall be made in accounts after final outcome of the matter.

1.12.01 Royalty on account of sale of Bauxite has been accounted for Rs. 1120.24 Lakhs (P.Y. Rs. 1018.39 lakhs) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

1.12.02 In view of the Supreme Court's decision in respect of mining activities, applications made by the Corporation for renewal of leases covering 2040 (P.Y. 2040) hectares of land for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

1.12.03 During the year, the Corporation has changed the accounting policy for provision on plant and machinery which has not been put to use and lying in capital work in progress (CWIP) for more than ten years and has made full provision against the same. Had the Corporation continued the earlier policy of provision, the expenses for the year would have been lower by Rs. 121.32 lakhs and profit for the year as well as CWIP would have been higher to that extent.

1.13 Contingent Liabilities

Contingent liabilities not provided for Claims against the Corporation not acknowledged as debt Rs. 101119.33 lakhs (P.Y. Rs. 38135.00 lakhs).

1.14.01 The ex-owners of land acquired for the Akrimota Project of the Corporation have filed suits for enhancement of compensation awarded by the order of the competent authority and the value of enhancement claimed is Rs. 773.52 lakhs (P.Y. Rs. 773.52 lakhs) upto 31st March, 2012. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

1.14.02 The ex-owners of land acquired for the Bhavnagar Project of the Corporation have filed suits for enhancement of compensation awarded by the order of the competent authority and the value of enhancement claimed is Rs. 60836.27 lakhs upto 31st March, 2012. Necessary adjustment shall be made in accounts after final decision/outcome of the case

1.14.03 Claims for additional compensation against acquisition of land at Rajpardi and panandhro for mining activities of the Corporation are under litigation before the Hon'ble Gujarat High Court. Pending the final disposal of the matters by the Hon'ble High Court Rs. 1239.03 lakhs (P.Y. Rs. 1044.78 lakhs) has been deposited and shown under the head 'Deposits with various Courts'. Necessary adjustment shall be made in accounts after final decision /outcome of the case.

1.14.04 Income - Tax : Rs. 24166.30 lakhs (P.Y. Rs. 23,791.26 lakhs)

1.14.05 Sales -Tax : Rs. 453.94 lakhs (P.Y. Rs. 453.94 lakhs)

1.14.06 Excise : Rs. 450.58 lakhs (P.Y. Rs. NIL )

1.14.07 Related to Contractors and Others : Rs. 4295.92 lakhs (P.Y. Rs. 4792.53 lakhs)

1.14.08 Bank Guarantee issued by banks on behalf of the Corporation/Corporate Guarantees given by GMDC on behalf of JV company : Rs. 3278.05 lakhs (P.Y. Rs. 3559.19 lakhs)

1.14.09 Royalty, Stamp duty and Conversion tax : Rs. 4466.88 lakhs (P.Y. Rs. 3719.78 lakhs)

1.14.10 Incentive to Employees : Rs. 1158.84 lakhs (P.Y. Rs. NIL )

In view of the various court cases/litigations and claims disputed by the Company, financial impact as to outflow of resources in respect of various expenses is not ascertainable at this stage.

1.15 Capital and other commitments :

1.15.01 Capital Commiments

Estimated amount of Capital Contracts remaining to be executed and not provided for Rs. 1717.73 lakhs (P.Y.Rs. 28559.62 lakhs)

1.15.02 Other Commitments

a) Corporation has entered in to the Sponsor Support Agreement with Bhavnagar Energy Company Ltd (BECL), whereby Corporation has given commitment to meet the Cost overrun to the extent of its share of 16% in BECL.

b) NALCO has made upfront payment of Rs. 15100 lakhs for setting up Alumina Refinery & Smelter plant in Kutch region and same has been shown under the head "Other long term Liabilities". Further, GMDC has deposited the said amount with GSFS as inter corporate deposit. GMDC will supply Bauxite, Limestone and Lignite to NALCO on a long term basis, as per terms and conditions as may be mutually agreed between the parties and subject to approval of appropriate authorities; In case the said arrangement is not materialized as per proposed agreement, then GMDC shall refund the said amount and other compensation to NALCO as admissible as per law prevailing at that time.

1.16 Balances of Creditors, Debtors, Loans & Advances and Advances from Customers are subject to reconciliation and adjustments, if any, in the accounts.

1.17 The company is in the process of identifying impairment of assets. In case Impairment loss is identified, the same will be recognized as per accounting policy of the company.

1.18 SEGMENT REPORTING

The Corporation has identified two reportable segments viz. Mining and Power. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with accounting policy of the corporation with the following additional policies for segment reporting.

a) Revenue and expenses have been identifed to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

1.19 Till year ended 31st March, 2011, the company was using pre-revised schedule VI to the Companies Act, 1956, for preparation and presentation of financial statements. During the year ended 31st March, 2012 the revised schedule VI notified under the Companies Act, 1956, has become applicable to company. Corresponding figures of the previous year have been re-grouped / re-arranged and re-classified, wherever necessary, to make them comparable with the figures of the current year.

1.20 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956 subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the consolidated financial statements.

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Mar 31, 2011

1. Contingent liabilities not provided for Claims against the Corporation not acknowledged as debt Rs. 38,135.00 (P.Y. Rs. 28,262.31) lakhs.

a) The ex-owners of land acquired for the Akrimota Project of the Corporation have filed suits for enhancement of compensation awarded by the order of the competent authority and the value of enhancement claimed is Rs. 773.52 (P.Y. Rs. 773.52) lakhs. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

b) Claims for additional compensation against acquisition of land at Rajpardi and Panandhro for mining activities of the Corporation are under litigation before the Hon'ble Gujarat High Court. Pending the final disposal of the matters by the Hon'ble High Court, Rs. 1,044.78(P.Y. Rs. 880.96) lakhs has been deposited and shown under the head 'Advance recoverable in cash or kind or for value to be received'. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

c) Income-tax : Rs. 23,791.26 (P.Y. Rs. 13,978.89) lakhs

d) Sales-tax : Rs. 453.94 (P.Y. Rs. 418.73) lakhs

e) Related to Contractors and Others : Rs. 4,792.53 (P.Y. Rs. 6,474.23) lakhs

f) Bank Guarantee issued by banks on behalf of the Corporation : Rs. 3,559.19 (P.Y. Rs. 3,303.99) lakhs

g) Royalty, Stamp duty and Conversion tax : Rs. 3,719.78 (P.Y. Rs. NIL) lakhs h) Gratuity Rs. Nil (P.Y. Rs. 2,431.99) lakhs

In view of the various court cases/litigations and claims disputed by the Company, financial impact as to outflow of resources is not ascertainable at this stage.

2. Estimated amount of Capital Contracts remaining to be executed and not provided for Rs. 28,559.62 (P.Y. Rs. 50,482.15) lakhs.

3. Pending clearance of the title of the land, sale deed in respect of the land of the Cement Plant at Hadad sold earlier, is not executed and an amount of Rs. 24.92 (P.Y. Rs. 24.92) lakhs is recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to deposit the said amount with a nationalized bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

4. In view of the Supreme Court's decision in respect of mining activities, applications made by the Corporation for renewal of leases covering 2,040 (P.Y.2,040) hectares of land for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalization of renewal applications.

5. Royalty on account of sale of Bauxite and Manganese Ore has been deposited on adhoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

6. a) The Corporation has changed the method for charging depreciation for the assets purchased upto March 31, 1987 from Straight

Line Method to Written down Value method for the sake of uniformity.

Had the Corporation continued to charge depreciation on Straight Line Method the depreciation charge for the current year would have been lower by Rs. 119.20 lakhs and profit would have been higher to that extent and net assets would have been higher by Rs. 119.20. lakhs. b) The Corporation has changed the policy to charge the depreciation from the date of putting them to use on pro rata basis in respect of all the assets w.e.f. current financial year. So far depreciation on assets in respect of projects other than power project and wind energy farm were charged proportionately for the period from the month of acquisition if it is acquired during the first fortnight of that month and from subsequent month if acquired during the second fortnight of that month. Had the Corporation continued to charge depreciation proportionately for the period from the month of acquisition if it is acquired during the first fortnight of that month and from subsequent month if acquired during the second fortnight of that month. The depreciation charge for the current year would have been higher by Rs. 0.39 lakhs and profit would have been lower to that extent and net assets would have been lower by Rs. 0.39 lakhs.

7. a) GSECL and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs. 59.40 (P.Y. Rs. 59.40) lakhs are accounted in the books of the Corporation and included in the respective heads of the assets. b) An amount of Rs. 168.80(P.Y. Rs. 30.80) lakhs is payable by GSECL on account of 50% of the revenue expenditure incurred by GMDC towards common facilities at Panandhro, which is subject to reconciliation and adjustments, if any.

c) In respect of sale of electricity, GUVNL has considered the Return on Equity, Normative Plant Load Factor and auxiliary consumption @ 13% per annum, 75% and 11% respectively as per letter dated 6.10.2006 issued by Energy and Petrochemicals Department, Government of Gujarat. However, as per Power Purchase Agreement, the rate of Return of Equity is 16%, Normative Plant Load Factor is 68.5% and auxiliary consumption @ 10%. GMDC and GUVNL are in the process of execution of Supplementary Power Purchase Agreement. Pending such execution, the revenue has been booked on the basis of amount paid by GUVNL against electricity bills and adjustment of U.I. charges. Necessary adjustment shall be made in accounts after final outcome of the matter.

8. Gujarat State Road Transport Corporation Limited (GSRTC) had agreed to pay overdue lease rent of Rs. 1,183 lakhs in installments towards providing 254 buses on lease in respect of Agreement between GMDC and GSRTC dated 21.10.1999, which was credited to the Profit and Loss Account in the FY 2005-06 against which an amount of Rs. 202 lakhs is received upto 31st March, 2011. Further, we have received a letter dated 17.5.2011 from GSRTC for waiving the lease rentals amounting Rs. 981 lakhs in respect of the said lease. GMDC has not accepted their request for waiving the lease rentals. GSRTC being a Govt. of Gujarat undertaking, the matter has been referred to the Govt of Gujarat for recovery of outstanding amount of lease rentals , hence, no provision has been made for the same.

9. There are no amounts due to the Suppliers covered under Micro, Small and Medium Enterprises Development Act, 2006; this information takes into account only those suppliers who have responded to the enquiries made by the Corporation for this purpose.

10. a) Balance confirmations have not been received from Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited for Rs. 221.99 (P.Y. Rs. 304.20) lakhs and Rs. 84.55 (P.Y. Rs. 84.55) lakhs respectively. The said balances are subject to reconciliation and adjustments in the accounts. b) Balances of Creditors, Debtors, Loans & Advances and Advances from Customers are subject to reconciliation and adjustments, if any, in the accounts.

11. In the opinion of Board of Directors, Current Assets. Loans & Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business, unless otherwise stated and provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

12. As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase all the shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval.

13. The possession of the Corporation's Guest-house at Bhuj given to Tourism Corporation of Gujarat Limited (TCGL) on 6.8.2002 against proposed sale in terms of letter No GMC-102002-415-CHH.1 dated 10.6.2002 of Ministry of Industries and Mines, Government of Gujarat has been returned to the Corporation on 28.2.2006 in terms of letter No TDC-102001-929-S dated 26.10.2005. TCGL during the period of possession has let out some portion of the Guesthouse. The Corporation is taking necessary steps with TCGL and the Government of Gujarat for recovery of rent for the period of possession, maintenance expenditure, gram panchayat tax and rent recovery from the tenants, which is in process. The said recoveries will be considered in accounts on finalization of negotiations with TCGL and the State Government.

b) Consequent to the Guidance on implementing Accounting Standard 15 "Employees Benefits" (AS-15) which clarifies the applicability of the Accounting Standard, the Corporation has considered certain entitlements to earned leave which can be carried forward to future periods as a long term employee benefit.

14. Related party disclosures on 31.3.2011 :

a) Key Management Personnel

Shri M. Sahu, IAS Chairman

Shri V. S. Gadhavi, IAS Managing Director

b) Particulars of remuneration paid to Managing Director are given below : Shri V. S. Gadhavi, IAS Rs. 12,93,533/-

15. Figures of the Previous Year have been re-grouped / re-arranged, wherever necessary, to make them comparable with the figures of the current year.

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Mar 31, 2010

1. Contingent liabilities not provided for : Claims against the Corporation not acknowledged as debt Rs.28262.31 (P.Y.Rs.25055.11) lakhs.

a) The ex-owners of land acquired for the Akrimota Project of the Corporation have filed suits for enhancement of compensation awarded by the order of the competent authority and the value of enhancement claimed is Rs.773.52 (P.Y.Rs.773.52) lakhs. Necessary adjustment shall be made in accounts after final decision/ outcome of the case.

b) Claims for additional compensation against acquisition of land at Rajpardi and Panandhro for mining activities of the Corporation are under litigation before the Honble Gujarat High Court. Pending the final disposal of the matters by the Honble High Court, Rs.880.96 (P.Y.Rs.880.96) lakhs has been deposited and shown under the head Advance recoverable in cash or kind or for value to be received. Necessary adjustment shall be made in accounts after final decision/outcome of the case.

c) Income-tax : Rs.13,978.89 (P.Y.Rs.13,359.41) lakhs

d) Sales-tax : Rs.418.73 (P.Y.Rs.418.73) lakhs

e) Related to Contractors and Others : Rs.6,474.23 (P.Y.Rs.6,318.50) lakhs

f) Bank Guarantee issued by banks on

behalf of the Corporation : Rs.3,303.99 (P.Y.Rs.3,303.99) lakhs

g) Gratuity (The enhanced ceiling of gratuity from R s.3.50 lakhs to Rs.10 lakhs shall come into force on such date as the Central Govt. may, by notification in the Official Gazette, appoint. The same is subject to receiving notification and approval of the Board of Directors) : Rs.2,431.99 (P.Y.Rs.NIL) lakhs

In view of the various court cases/litigations and claims disputed by the Company, financial impact as to outflow of resources is not ascertainable at this stage.

2. Estimated amount of Capital Contracts remaining to be executed and not provided for Rs.50,482.15 (P.Y.Rs.9,451.03) lakhs.

3. Pending clearance of the title of the land, sale deed in respect of the land of the Cement Plant at Hadad sold earlier, is not executed and Rs.24.92 (P.Y.Rs.24.92) lakhs are recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court.

4. In view of the Supreme Courts decision in respect of mining activities, applications made by the Corporation for renewal of leases covering 2040 (P.Y.2040) hectares of land for extracting bauxite, lignite, fluorspar, etc. are pending since 1993-94. Necessary adjustment in respect of liability for lease rent and royalty will be provided in accounts on finalization of renewal applications.

5. Royalty on account of sale of Bauxite and Manganese Ore has been deposited on adhoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome of the matter.

6. As per the letter of Industries & Mines Department, Govt. of Gujarat dated 19.11.2009, GMDC has to keep 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society for mineral survey and exploration. Accordingly, Rs.226.56 lakhs (80% of the basic sale price) has been transferred to GMRDS Account.

7. Ministry of Coal, Govt. of India has circulated the Guidelines dated 27.8.2009 for preparation of Mines Closure Plan. The Corporation is required to deposit every year the annual cost of Mines Closure @ Rs.6 lakhs per hectare of the lease throughout the Mines life. Accordingly, the Corporation has made a provision for Mines Closure Plan amounting to Rs.3,412.36 lakhs for the current year on pro rata basis from the date of the issuance of the Guidelines.

8. As per CERC (Terms and Conditions of Tariff) Regulations 2009, GMDC is required to provide depreciation @ 5.28% p.a. on straight line method on balance depreciable value of Plant and Machinery including mandatory/ insurance spares of Power Plant as on 1.4.2009. Till last year, the depreciation was provided by the Corporation @ 3.60% p.a. on straight line method on the original cost of the aforesaid assets as per the then prevailing CERC Guidelines.

Had the Corporation continued to provide depreciation for Plant and Machinery including mandatory spares of Power Project @ 3.60% p.a. on straight line method on the original cost, the depreciation charged for the current year would have been lower by Rs.703.51 lakhs and profit would have been higher to that extent and net fixed assets would have been higher by Rs.703.51 lakhs.

9. The Corporation has changed the policy for charging depreciation on fencing as the fencing expense is of recurring nature hence, the same is charged as revenue which was hitherto capitalized.

Had the Corporation continued to charge depreciation on fencing to Profit and Loss Account, the expenses for the current year would have been lower by Rs.49.57 lakhs and profit would have been higher to that extent and assets would have been higher by Rs.49.57 lakhs.

10. a) GSECL (erstwhile GEB) and the Corporation had agreed to create common amenities (school, hospital, drinking water supply, communication, transport facilities, etc.) for the employees of both entities in Panandhro in terms of minutes dated 8.10.1991, 3.8.1992, 1.10.1993. These were to be managed by a Trust to be registered in this regard. Pending formation of the Trust, the capital and revenue expenditure incurred by the Corporation as well as GSECL are shared on 50:50 basis and accounted in the books of the respective entity. Share of 50% given by each against the expenditure incurred by respective entity is subject to confirmation and adjustments, if any. Pending transfer of such assets to the Trust, capital expenditure incurred in the creation of assets towards 50% share of GMDC to the tune of Rs.59.40 (P.Y.Rs.59.40) lakhs are accounted in the books of the Corporation and included in the respective heads of the assets.

b) An amount of Rs.30.80 (P.Y.Rs.179.26) lakhs is payable by GSECL on account of 50% of the revenue expenditure incurred by GMDC towards common facilities at Panandhro, which is subject to reconciliation and adjustments, if any.

c) In respect of sale of electricity, GUVNL (erstwhile GEB) has considered the Return on Equity, Normative Plant Load Factor and auxiliary consumption @ 13% per annum, 75% and 11% respectively as per letter dated 6.10.2006 issued by Energy and Petrochemicals Department, Government of Gujarat. However, as per Power Purchase Agreement, the rate of Return of Equity is 16%, Normative Plant Load Factor is 68.5% and auxiliary consumption @ 10%. GMDC and GUVNL are in the process of execution of Supplementary Power Purchase Agreement. Pending such execution, the revenue has been booked on the basis of amount paid by GUVNL against electricity bills. Necessary adjustment shall be made in accounts after final outcome of the matter.

11. Gujarat State Road Transport Corporation Limited (GSRTC) had agreed to pay overdue lease rent of Rs.1183 lakhs in installments towards providing 254 buses on lease in respect of Agreement between GMDC and GSRTC dated 21.10.1999, which was credited to Profit and Loss Account in the FY 2005-06 against which an amount of Rs.202 lakhs is received upto 31st March, 2010. Further, we have received a letter dated 29.4.2010 from GSRTC for waiving the lease rentals amounting Rs.981 lakhs in respect of the said lease. GMDC has not accepted their request as (a) there is no direction from Govt. of Gujarat in this regard and (b) in respect of another Agreement dated 10.10.2006 between GMDC and GSRTC for 15 Nos buses provided to GSRTC on monthly lease rent of Rs.3.62 lakhs, GMDC has received the due amount upto March 2010 in full. Hence, no provision has been made for the same.

12. There are no amounts due to the Suppliers covered under Micro, Small and Medium Enterprises Development Act, 2006; this information takes into account only those suppliers who have responded to the enquiries made by the Corporation for this purpose.

13. a) Balance confirmations have not been received from Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited for Rs.304.20 (P.Y.Rs.375.92) lakhs and Rs.84.55 (P.Y.Rs.106.40) lakhs respectively. The said balances are subject to reconciliation and adjustments in the accounts.

b) Balances of Creditors, Debtors, Loans & Advances and Advances from Customers are subject to reconciliation and adjustments, if any, in the accounts.

14. In the opinion of Board of Directors, Current Assets. Loans & Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business, unless otherwise stated and provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

15. As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase all the shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by GMDC from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to buy back the above shares and GMDC shall hold these shares as investment. The Board of Directors of GMDC and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval.

16. The possession of the Corporations Guest-house at Bhuj given to Tourism Corporation of Gujarat Limited (TCGL) on 6.8.2002 against proposed sale in terms of letter No GMC-102002-415-CHH.1 dated 10.6.2002 of Ministry of Industries and Mines, Government of Gujarat has been returned to the Corporation on 28.2.2006 in terms of letter No TDC-102001-929-S dated 26.10.2005. TCGL during the period of possession has let out some portion of the Guesthouse. The Corporation is taking necessary steps with TCGL and the Government of Gujarat for recovery of rent for the period of possession, maintenance expenditure, gram panchayat tax and rent recovery from the tenants, which is in process. The said recoveries will be considered in accounts on finalization of negotiations with TCGL and the State Government.

17. Employee Benefits

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below :

18. Related party disclosures on 31.3.2010 :

a) Key Management Personnel

Shri M. Sahu, IAS Chairman

Shri V. S. Gadhavi, IAS Mg. Director

19. Figures of the Previous Year have been re-grouped / re-arranged, wherever necessary, to make them comparable with the figures of the current year.