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Notes to Accounts of Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

Mar 31, 2023

* Amount nullified on conversion to '' crores.

@ The Company is carrying physical share certificate in respect of this investment.

# M/s Ecophos GNFC Private Limited (EGIPL) is the joint venture company formed by the Company and M/s Ecophos S.A - a Belgium based company for manufacturing of Di-Calcium Phosphate (DCP) at Dahej location. The Company holds 15% shareholding of EGIPL at issued value of '' 24.21 crores. During the FY 2019-20, M/s Eophos S.A. (shareholder) holding 85% shareholding of EGIPL had applied for bankruptcy. Consequently all the nominee directors of EGIPL, Managing Director and Company Secretary of EGIPL resigned. Plant installation for manufacturing of DCP didn''t commenced. Accordingly, the Company valued such investment as at March 31,2023 and as at March 31,2022 at the nominal consideration of '' 1.

$ The Company had acquired various securities from GNFC-EPFT which includes investments in various long term secured/ unsecured Non-Convertible Debentures (NCD) issued by IL&FS Group & NCD issued by Reliance Capital Limited. Such investments have been recorded at the nominal fair values of '' 8.20 only (i.e. '' 1 for each security) as against total face value of '' 39.62 crores.

(a) The fair value of the quoted equity investments are derived from quoted market prices in active market.

(b) Investments include investment in unquoted equity shares. Fair value of unquoted investment in equity instrument have been carried out by independent valuer using Net Assets Value model and comparable companies model following Market Approach and Asset Approach. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk, volatility, net assets and market multiples. The probabilities of various estimates within the range can be reasonably assessed and are used in management''s estimates for fair value for these unquoted equity instruments.

* includes gross interest accrued '' 4.51 crores (previous year '' 4.43 crores) on current loans to employees and of '' 31.89 crores (previous year '' 31.86 crores) on non-current loans to employees.

# No loans are due from Promoters, Directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person, that are repayable on demand or without specifying any terms or period of repayment.

@ includes secured Loans to employees having fair value of '' 12.06 crores (previous year '' 12.44 crores) in current and '' 101.52 crores (previous year '' 98.61 crores) in non-current amount. Employees have mortgaged/ hypothecated their Buildings and Vehicles to the Company.

a) Refer Note 44 for Ageing of Trade receivables as on March 31,2023 and March 31,2022.

b) No trade or other receivables are due from Directors or other officers of the Company either severally or jointly with any other person; nor any trade or other receivables are due from firms or private companies in which any Director is a partner, a director or a member.

c) The fair value of trade receivables (including subsidy receivables) is not materially different from the carrying value presented.

d) Trade receivables are non interest bearing and are generally on terms of 30 to 90 days. Trade receivables of (n)Code division (IT) are of '' 49.88 crores (previous year '' 61.68 crores) are governed by the terms of respective contract agreement. Out of the dues, the Company has provided impairment allowance of '' 13.80 crores as on March 31,2023 (as on March 31,2022: '' 18.30 crores) based on credit risk model followed by the Company.

e) Subsidy receivables represents amount receivable from government against sale of fertilizers.

17.2. Terms/rights attached to the equity shares

Rights, preferences and restrictions attached to equity shares:

The Company has only one class of equity shares having par value of '' 10 per share, i.e. equity shares which rank pari passu in all respects. Each holder of equity share is entitled to one vote per share.

For the current financial year 2022-23, the Company has proposed dividend of '' 30 per equity share to equity shareholder (for the previous financial year dividend of '' 10/- per share declared). The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Security details

Short term borrowings from banks as cash credit and overdraft accounts of '' 0.01 crore (March 31,2022: '' 0.07 crore) are secured by first charge by way of hypothecation of inventories and trade receivables and all other movable assets, both present and future and further secured by second charge by way of mortgage on all immovable properties. These charges are ranking pari-passu among the working capital lenders.

Interest rate details for short term borrowings:

(i) Cash credit facilities and overdrafts carries interest rates ranging from 3.50% to 7.70% p.a.

* The capital grant of '' 1,213.06 crores from Government of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers for feed stock conversion project from ''LSHS/FO'' to ''Gas'' vide sanction letter no 14023/22/2007-FP dated 14.12.2009 has accrued to the Company since the conditions attached to the grant have been fulfilled by the Company. Till date, the government had disbursed '' 1,146.43 crores towards capital grant as against '' 1,213.06 crores and '' 348.45 crores towards grant as reimbursement of borrowing cost as against total borrowing cost of '' 195.47 crores. Accordingly, the Company has, pending settlement, recorded a net liability of '' 85.06 crores (net of adjustment of receivable against return on investment of '' 1.29 crores) towards capital grant.

@ Includes '' 5.31 crores (March 31,2022 : '' 6.99 crores) payable to Micro, Small and Medium Enterprises which have been determined to the extent such parties have been identified on the basis of information collected by the Management.

$ Escrow account liability represents amount received as Earnest Money Deposit & Tender fees against e-auction done on behalf of various local authorities of Government of Gujarat. Corresponding asset is disclosed in Note 15 as "Bank balances in escrow accounts".

# Not due for credit to "Investors Education and Protection Fund".

g) During the previous year, the Company has decided to exercise the option permitted under section 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 under which domestic companies have the option to pay income tax at lower rate ("New tax rate") subject to the giving up of certain incentives and deductions. Accordingly, the provision for current tax for the current year ended on March 31,2023 of '' 541.29 crores is measured at the New tax rate.

h) Based on reconciliation of income tax liabilities pertaining to current tax provision of earlier years as per books of account with tax liabilities acknowledged in respective year''s income tax return / assessed tax liabilities, excess tax provision aggregating to '' 21.00 crores (previous year '' 2.14 crores) related with earlier years has been written back in the books.

Note (b) :

CSR Expenditure incurred for various activities like Women empowerment, Rural development, Livelihood enhancement, Promoting gender equality, education, Preventive healthcare and sanitation, Disaster management, Support to armed force etc. Note (c) :

Represents contribution to Narmadanagar Rural Development Society (NARDES), a CSR Arm controlled by the Company to undertake various CSR activities.

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

(b) Post retirement medical benefit

Each year the management reviews the level of funding in the gratuity fund. Such review includes the asset - liability matching strategy. The management decides its contributions based on the results of this review. The management aims to keep annual contributions relatively stable at a level such that no plan deficit (based on valuation performed) will arise. The plan for the Post retirement medical benefit is unfunded.

The following table summarises the components of net benefit expense recognised in statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans:

NOTE 43 (A) :

In earlier year, Hon''ble High Court of Gujarat has sanctioned the Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of '' 6 crores vide its Common Oral Order dated June 15, 2012.

The "Appointed Date" of the Scheme is 1st April, 2010.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licences standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited were submitted to Department of Telecommunications (DOT) on January 31,2013 which are still pending for approval before DOT.

As per the legal opinion taken by the Company from the consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective, the scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licences from the Company to ING Satcom Limited.

NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2023

During the year 2014-15, an agreement-Cum-indemnity Bond was executed on 12.04.2014 between the Company and ING Satcom Limited whereby, pending transfer of Licences, the assets of demerged business (other than Licences) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licences by 31.12.2014.

Since disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities as well as settlement of transaction between the Company and ING Satcom Limited are still pending, no accounting treatment is given in the books of account of the Company since 2014-15 till the financial year ended 31.03.2023.

Necessary accounting treatment will be given in the books of accounts of the Company either on disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities or on finalization of settlement of transaction with ING Satcom Limited. The amount received is classified under other current liabilities (refer Note 24).

NOTE 43(B) : Demand Notice from Department of Telecommunication (DoT)

During the current year, the Company has received updated Demand Notice of '' 21,370 crores from the Department of Telecommunications (DoT), Ministry of Communications, Government of India, Gujarat Telecom Circle, Ahmedabad, vide its letters dated July 15, 2022 towards the license fee (including interest and penalty computed till November 30, 2021) in respect of "Very Small Aperture Terminal" (V-SAT) License and "Category A - Internet Service Provider" (ISP) License for the financial years from FY 2005-06 to FY 2019-20. Earlier, the Company had also received an initial Demand Notice from DOT dated March 05, 2020 and December 23, 2019 for amounting to '' 16,359 crores and '' 15,020 crores, respectively (including interest and penalty). The Company has made representations to the DoT against the said demand notices.

The Company has evaluated the assessment made by DoT for raising the above demand notices based on the Adjusted Gross Revenue (AGR) judgement of Hon''ble Supreme Court of India on October 24, 2019. Aggrieved by the above demands, the Company had submitted various representations dated January 06, 2020, February 21,2020, April 03, 2020 and March 04, 2022 to the DoT requesting reconsideration and withdrawal of the Demands raised by the DoT including the revenues of the Company from Fertilizers and Chemicals Business which is completely unconnected to VSAT and ISP Licenses.

Hon''ble Supreme Court vide its Order dated June 1 1,2020 directed DoT to reconsider the demand raised on Public Sector Undertakings ("PSUs"), which are not in business of mobile services to the general public.

The Telecom Disputes Settlement & Appellate Tribunal (TDSAT), in its Order dated 28th February, 2022 in the case of Netmagic Solutions Pvt. Ltd., a private limited company, held that there is no scope to differentiate between two sets of licensees having same or similar Licenses only on the basis of their ownership, private or public and set aside the demand raised by the DoT. Based on the legal assessment in consultation with Senior Advocates, the Company believes that it has strong grounds on merits to contest the demand raised by the DoT and defend itself in the matter Accordingly, this amount is neither provided in books of accounts nor considered under Contingent liability.

Note 46 : Segment Information

Operating Segments: The identified reportable segments are Fertilizers, Chemicals and Others in terms of the requirements of Ind AS 108 "Operating Segments" as notified under section 133 of the Companies Act, 2013. Other Segment mainly includes Information Technology division activities and neem product related activities.

Identification of Segments: The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108. Segment revenue and results: The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure and unallocable income.

Segment assets and liabilities: Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade receivables, inventory and other operating assets. Segment liabilities primarily include trade payable and other liabilities. Common assets and liabilities which cannot be allocated to any of the business segments are shown as unallocable assets / liabilities.

Inter Segment transfer: Inter Segment revenues are recognised at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the Company level.

exposure, with the connection between the two being regularly monitored. The Company is exposed to losses in the event of nonperformance by the counterparties to the derivative contracts. All derivative contracts are executed with counterparties that, in management''s judgment, are creditworthy. The outstanding derivatives are reviewed periodically to ensure that there is no inappropriate concentration of outstanding to any particular counterparty.

Further, all currency and interest risk as identified above is measured on a daily basis by monitoring the mark to market (MTM) of open and hedged position. For year ends, the MTM for each derivative instrument outstanding is obtained from respective banks. All gain / loss arising from MTM for open derivative contracts and gain / loss on settlement / cancellation / roll over of derivative contracts is recorded in statement of profit and loss.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. Financial instruments affected by market risk include loans and borrowings, FVTOCI investments and derivative financial instruments. The sensitivity analysis in the following sections relate to the position as at March 31,2023 and March 31,2022.

The sensitivity analysis have been prepared on the basis that the amount of net debt, interest rates of the debt and derivatives are all constant as at March 31,2023. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations and provisions.

The following assumptions have been made in calculating the sensitivity analysis:-

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2023 and March 31,2022.

(i) Interest rate risk

(ii) Foreign currency risk

Exchange rate movements, particularly the United States Dollar (USD) and Euro (EUR) against Indian Rupee (INR), have an impact on the Company''s operating results. The Company manages its foreign currency risk by entering into various foreign exchange contracts to mitigate the risk arising out of foreign exchange rate movement on trade payables. Further, to hedge foreign currency future transactions in respect of which firm commitment are made or which are highly probable forecast transactions (for instance, foreign exchange denominated income) the Company has entered into foreign currency forward contracts as per the policy of the Company.

The details of exposures hedged using forward contracts and the details of unhedged exposures are given as part of Note 49. The Company is mainly exposed to changes in USD and EURO. The below table demonstrates the sensitivity to a 5% increase or decrease in the respective foreign currency rates against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management''s assessment of reasonably possible change in foreign exchange rate.

(iii) Commodity price risk

The Company''s operating activities require the ongoing purchase of natural gas. Natural gas being an international commodity is subject to price fluctuation on account of the change in the crude oil prices, demand supply pattern of natural gas and exchange rate fluctuations. The Company is not affected by the price volatility of the natural gas to the extent consumed for Urea as under the Urea pricing formula the cost of natural gas is pass through if the consumption of natural gas is within the permissible norm for manufacturing of Urea.

The Company also deals in purchase of other feed stock materials (i.e. Rock phosphate, Toluene and Denatured Ethyl Alcohol) which are imported by the Company and used in the manufacturing of Ammonium Nitro Phosphate, Toluene Diisocyanate and Ethyl Acetate. The import prices of these materials are governed by international demand and supply pattern. There is a price and material availability risk, which is managed by senior management team through sensitivity analysis, commodity price tracking.

(iv) Equity price risk

The Company''s investment in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was '' 581.33 crores. Sensitivity analyses of these investments have been provided in Note 50.2(b).

At the reporting date, the exposure to listed equity securities at fair value was '' 416.49 crores. A decrease of 5% on the BSE market price could have an impact of approximately '' 20.82 crores on the OCI or equity attributable to the Group. An increase of 5% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and other financial assets) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on exchange losses historical data.

Credit risk from balances with banks and non-banking finance companies is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s management. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

Trade receivables

market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extensions of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as for certain products it extends rolling credit to its customers, against the collateral.

Trade receivables, other than subsidy receivables are secured to the extent of interest free security deposits and bank guarantees received from the customers amounting to '' 19.78 cores and '' 18.61 crores as at 31st March, 2023 and 31st March, 2022 respectively. (Refer Note No. 11 for Trade Receivables outstanding).

The Company follows a ''simplified approach'' (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables, other than those receivables from the Government of India. For the purpose of measuring lifetime ECL allowance for trade receivables, the company estimates irrecoverable amounts based on the ageing of the receivable balances and historical experience in respect of certain categories of the customers. Individual trade receivables are written off when management deems them not to be collectible

c) Liquidity Risk

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and bank balances. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner The table below analyses derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

50.4 : Capital Management:

For the purposes of the Company''s capital management, capital includes issued capital and all other equity. The primary objective of the Company''s capital management is to maximize shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.

The Company monitors capital using gearing ratio, which is net debt (total debt less cash and bank balance) divided by total capital plus net debt.

Since net debt is negative, same is considered as zero.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31,2023 and March 31,2022.

Note 51 : Additional disclosures required as per Schedule III to the Companies Act, 2013;

(i) The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31,2023 and March 31,2022.

(ii) No proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder, as at March 31,2023 and March 31,2022.

(iii) The Company is not a declared wilful defaulter by any bank or financial Institution or other lender, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India, during the year ended March 31,2023 and March 31, 2022.

(iv) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year ended March 31,2023 and March 31,2022.

(v) There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed as income during the year ended March 31,2023 and March 31,2022, in the tax assessments under the Income Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books of account during the year ended March 31,2023 and 31 March 31,2022.

(vi) The Company has taken borrowings from banks and financial institutions and utilised them for the specific purpose for which they were taken as at the Balance sheet date. Quarterly statements of current assets filed by the Company with Bank are in agreement with the books of accounts of the Company for the respective periods, except for the following :

Notes:

Note-1 : Revision in subsidy receivable as a subsequent event, on receipt of actual data after submission of stock statement to bank.

Note-2 : The amount disclosed as per quarterly returns / statements reconciles with gross book balance without adjustment of provision

Note-3 : Accrued expenses / reclassification adjustments and revision in Gas pool liability after submission of stock statement not considered in returns / statements submitted to bank.

Note-4 : Provision amount wrongly deducted twice in stock statement.

Note-5 : Accrued expenses / reclassification adjustments not considered in returns / statements submitted to bank. Note-6 : Reclassification adjustments not considered in returns / statements submitted to bank.

Note-7 : Reclassification adjustments and Correction in catalyst consumption after submission of stock statement. Note-8 : Inventory valuation impact was recognised subsequent to submission of return / statement to bank, hence not considered in returns / statements submitted to bank.

(vii) Based on the Ministry of Company Affairs (MCA) portal, charges aggregating to '' 14.15 crores are appearing as "Open" as of March 31,2023 which were executed with Banks (the lender) in relation to securing repayment of loan facility related to year 1985 to 1990. The Company is in process to obtain the No Objection Certificates from the Banks. Once the same is received, the Company will file the "Satisfaction of Charge" with the Registrar of Companies (ROC).

(viii) Utilisation of borrowed funds and share premium

(I) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

(II) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

Note 52 : Code on Social Security

The Indian Parliament has approved & the President has accorded the assent the Code on Social Security, 2020 (''Code'') in September, 2020. The Code might impact the contributions by the Company towards Provident Fund, Gratuity and other employment and post-employment employee benefits. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record the impact, if any, in the period in which the Code becomes effective.

Note 53 :

Balances of certain trade receivables, advances given and trade payables are subject to confirmation/ reconciliation, if any. The management does not expect any material difference affecting the financial statements on such reconciliation / adjustments.

Note 54 : Event occurred after the Balance Sheet Date:

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May 18, 2023 there were no material subsequent events to be recognized or reported that are not already previously disclosed.

Note 55 :

The previous year''s figures have been regrouped / reclassified, wherever necessary, to conform to the figures of the current year presentation.

Mar 31, 2022

I During the current year, the Company has decided to exercise the option permitted under section 115BAA of the Income Tax Act, 1961, as introduced by the Taxation Laws (Amendment) Ordinance, 2019 under which domestic companies have the option to pay income tax at lower rate ("New tax rate") subject to the giving up of certain incentives and deductions. Accordingly, the provision for current tax for the current year ended on March 31,2022 of '' 615.66 crores is measured at the New tax rate.

Further, in the Financial Year 2019-2020, deferred tax balances were re-measured using the tax rate expected to be prevalent in the period in which the deferred tax balances are expected to reverse. Therefore, there is no material impact on the deferred tax in the current year ended March 31,2022 due to rate change.

I Adjustment in respect of current income tax of earlier years of '' 2.14 crores represents differential tax liability for FY 202021 at the time of filling of return of income compared to the provision made in books of accounts.

Further, Based on reconciliation of income tax liabilities pertaining to current tax provision of earlier years as per books of account with tax liabilities acknowledged in respective year''s income tax return / assessed tax liabilities, excess tax provision aggregating to '' NIL (previous year '' 0.09 crores) related with earlier years has been written back in the books.

Note 36 : Contingent liabilities and other commitments (to the extent not provided for)		('' Crores)
Particulars	As at	As at
	March 31,2022	March 31,2021
(A) Contingent liabilities (i) Claims against the Company not acknowledged as debts (In the nature of business contractual claims)	254.91	274.24
(ii) Income tax assessment orders contested	143.10	45.06
(iii) Demands in respect of Central Excise Duty, Custom Duty, Service Tax, GST and Value Added Tax as estimated by the Company	153.00	166.08
Total contingent liabilities	551.01	485.38
In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute. (B) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	162.68	103.23
(C) Other commitments (i) Export obligation on account of benefit of concessional rate of Custom duty availed under EPCG license scheme on imports of capital goods.	120.97	106.41
Total other commitments	120.97	106.41

The Company has taken various land, warehouses, godowns, guest houses, office premises and vehicles used in its operations. These are generally cancellable having a term between one to three year extendable for further period as per the terms of rental agreements.

The Company also has certain leases of warehouses, godowns, office premises and vehicles with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

The Company has entered into operating leases on its investment property portfolio consisting of certain office. Rent income also includes rentals received from lease of office premises. These leases is generally for a period of three to four years. There are no restrictions imposed by lease arrangements.

Pursuant to Ministry of Corporate Affairs (MCA) clarification dated 23.03.2020 on spending of Corporate Social Responsibility (CSR) funds for COVID-19 and appeal of Government of Gujarat for contributing to fight against worldwide pandemic "Coronavirus", on 01.04.2020, the Company had contributed '' 10 crores to the "Chief Minister''s Relief Fund"(CMRF), Government of Gujarat after obtaining due approval of Company''s CSR Committee and of the Board of Directors. The Company has considered the CMRF contribution as a part of CSR spend in terms of section 135 of Companies Act, 2013 (as amended) ("the Act"). Subsequently, on 10.04.2020, MCA had issued Frequently Asked Questions (FAQs) related to COVID-19 on Corporate Social Responsibility

(CSR) wherein it was inter alia clarified that "Chief Minister''s Relief Fund" or "State Relief Fund" for COVID19 is not included in Schedule VII of the Act and therefore, any contribution to such funds shall not qualify as admissible CSR expenditure.

The CSR Committee and the Board vide circular resolution dated 31.03.2021 took a note of the matter and concluded that since the MCA FAQ''s were issued subsequent to the Companies transaction, the said contributions of '' 10 crores earlier made by the Company to CMRF on 01.04.2020 to fight against pandemic "Coronavirus" COVID-19 was in compliance with the provisions of the Act & rules made thereunder read with Schedule VII of the Act and therefore is admissible as CSR expenditure. Accordingly, for the contribution of '' 10 crores to the CMRF under Disaster Management of COVID-19 Pandemic, the management of the Company is of the view that it has complied with the provisions of section 135 of the Act, as regards the total required spent of '' 16.01 crores towards CSR activities for the year ended March 31,2021, with actual CSR expenditure spent of '' 20.26 crores made by the Company during the previous year.

Note (b) :

Includes '' 0.72 crore expenditure incurred for supply of Oxygen to various hospitals at Free of Cost.

Note (c) :

Represents contribution to Narmadanagar Rural Development Society (NARDES), a CSR Arm controlled by the Company to undertake various CSR activities.

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

(b) Post retirement medical benefit

NOTE: 43 (A)

In earlier year, Hon''ble High Court of Gujarat has sanctioned the Scheme of Arrangement and Demerger for transfer of V-SAT/ ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of '' 6 crores vide its Common Oral Order dated June 15, 2012.

The "Appointed Date" of the Scheme is 1st April, 2010.

During the year 2014-15, an agreement-Cum-Indemnity Bond was executed on 12.04.2014 between the Company and ING

Satcom Limited whereby, pending transfer of Licences, the assets of demerged business (other than Licences) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licences by 31.12.2014.

NOTE: 43(B) - Demand Notice from Department of Telecommunication (DoT)

During the year ended March 31,2020, the Company had received Demand Notice of '' 16,359.21 crores from the Department of Telecommunications (DoT), Ministry of Communications, Government of India, Gujarat Telecom Circle, Ahmedabad, vide its letters dated February 17, 2020 and March 05, 2020, towards the license fee (including of interest and penalty computed till March 31,2020) in respect of "Very Small Aperture Terminal" (V-SAT) License and "Category A - Internet Service Provider" (ISP) License for the Financial Years from FY 2005-06 to FY 2018-19. Earlier, the Company had also received an initial Demand Notice from DOT dated December 23, 2019 for amounting to '' 15,019.97 crores (including interest and penalty). The Company has made representations to the DoT against the said demand notices.

Recently, the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), in its Order dated 28th February, 2022 in the case of Netmagic Solutions Pvt. Ltd., a private limited Company, held that that there is no scope to differentiate between two sets of licensees having same or similar Licenses only on the basis of their ownership, private or public and set aside the demand raised by the DoT.

Based on the legal assessment in consultation with Senior Advocates, the Company believes that it has strong grounds on merits to contest the demand raised by the DoT and defend itself in the matter Accordingly, the Company is of the view that no provision is required in respect of this matter

Note 46 : Segment Information

Operating Segments The identified reportable segments are Fertilizers, Chemicals and Others in terms of the requirements of Ind AS 108 "Operating Segments" as notified under section 133 of the Companies Act, 2013. Other Segment mainly includes Information Technology division activities and neem product related activities.

Identification of Segments:The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108. Segment revenue and results:The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure and unallocable income.

Segment assets and liabilities:Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade receivables, inventory and other operating assets. Segment liabilities primarily include trade payable and other liabilities. Common assets and liabilities which cannot be allocated to any of the business segments are shown as unallocable assets / liabilities.

Inter Segment transfer:Inter Segment revenues are recognised at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the Company level.

c) Financial Instrument measured at amortised cost

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

50.3 : Financial Risk objective and policies:

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Companyâs principal financial assets include loans, deposits, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI & FVTPL investments and enters into derivative transactions.

In the ordinary course of business, the Company is mainly exposed to risks resulting from exchange rate fluctuation (currency risk), interest rate movements (interest rate risk) collectively referred as Market Risk, Credit Risk, Liquidity Risk and other price risks such as equity price risk and commodity price risk. The Companyâs senior management oversees the management of these risks. It manages its exposure to these risks through derivative financial instruments by hedging transactions as required. It uses derivative instruments such as foreign currency forward contract to manage currency risks. These derivative instruments reduce the impact of both favourable and unfavourable fluctuations.

The Companyâs risk management activities are subject to the management, direction and control of the management of the Company under the guideline of the Board of Directors of the Company. The management ensures appropriate financial risk governance framework for the Company through appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes may be undertaken.

The decision of whether and when to execute derivative financial instruments along with its tenure can vary from period to period depending on market conditions and the relative costs of the instruments. The tenure is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company is exposed to losses in the event of nonperformance by the counterparties to the derivative contracts. All derivative contracts are executed with counterparties that, in managementâs judgment, are creditworthy. The outstanding derivatives are reviewed periodically to ensure that there is no inappropriate concentration of outstanding to any particular counterparty.

a) Market risk

The sensitivity analysis have been prepared on the basis that the amount of net debt, interest rates of the debt and derivatives are all constant as at March 31,2022. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations and provisions.

The following assumptions have been made in calculating the sensitivity analysis: -

(i) Interest rate risk

(ii) Foreign currency risk

Exchange rate movements, particularly the United States Dollar (USD) and Euro (EUR) against Indian Rupee (INR), have an impact on the Company''s operating results. The Company manages its foreign currency risk by entering into various foreign exchange contracts to mitigate the risk arising out of foreign exchange rate movement on trade payables. Further, to hedge foreign currency future transactions in respect of which firm commitment are made or which are highly probable forecast transactions (for instance, foreign exchange denominated income) the Company has entered into foreign currency forward contracts as per the policy of the Company.

The details of exposures hedged using forward contracts and the details of unhedged exposures are given as part of Note 49.

The Company is mainly exposed to changes in USD and EURO. The below table demonstrates the sensitivity to a 5% increase or decrease in the respective foreign currency rates against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management''s assessment of reasonably possible change in foreign exchange rate.

(iii) Commodity price risk

(iv) Equity price risk

At the reporting date, the exposure to unlisted equity securities at fair value was '' 655.72 crores. Sensitivity analyses of these investments have been provided in Note 50.2(b).

At the reporting date, the exposure to listed equity securities at fair value was '' 499.98 crores. A decrease of 5% on the BSE market price could have an impact of approximately '' 25.00 crores on the OCI or equity attributable to the Group. An increase of 5% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

b) Credit risk

Trade receivables

The Company''s receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the central and state Government in the form of subsidy. As far as Government portion of receivables is concerned, credit risk is Nil except where there are uncertainties due to non-acknowledgement of claims. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extensions of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are

regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as for certain products it extends rolling credit to its customers, against the collateral.

Trade receivables, other than subsidy receivables are secured to the extent of interest free security deposits and bank guarantees received from the customers amounting to '' 18.61 crores and '' 22.58 crores as at 31st March, 2022 and 31st March, 2021 respectively. (Refer Note No. 11 for Trade Receivables outstanding).

The Company follows a ''simplified approach'' (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables, other than those receivables from the Government of India. For the purpose of measuring lifetime ECL allowance for trade receivables, the Company estimates irrecoverable amounts based on the ageing of the receivable balances and historical experience in respect of certain categories of the customers. Individual trade receivables are written off when management deems them not to be collectible

c) Liquidity Risk

50.4 : Capital Management:

The Company monitors capital using gearing ratio, which is net debt (total debt less cash and bank balance) divided by total capital plus net debt.

Since net debt is negative, same is considered as zero.

Note 51 : Additional disclosures required as per Schedule III to the Companies Act, 2013;

(i) The Company has not traded or invested in Crypto currecy or Virtual Currecny during the year ended March 31,2022 and March 31,2021.

(ii) The Company does not have any Benami property and no proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder, as at March 31,2022 and March 31,2021.

(iv) The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year ended March 31,2022 and March 31,2021.

(v) There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed as income during the year ended March 31,2022 and March 31,2021, in the tax assessments under the Income Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books of account during the year ended March 31,2022 and 31 March 31,2021.

Notes:

Note-1 : Reclassification adjustments with advances from customers not considered in returns / statements submitted to bank.

Note-2 : The amount disclosed as per quarterly returns / statements reconciles with gross book balance without adjustment of provision

Note-3 : Accrued expenses / reclassification adjustments not considered in returns / statements submitted to bank.

Note-4 : In transit inventory related to oil was not considered in returns / statements submitted to bank.

Note-5 : Provision for excess inventory was recognised as a subsequent event, hence not considered in returns / statements submitted to bank.

Note-6 : Inventory valuation impact was recognised subsequent to submission of return / statement to bank, hence not considered in returns / statements submitted to bank.

Note-7 : Differential freight subsidy recognised as a subsequent event, hence not considered in returns / statements submitted to bank.

Note-8 : Accrued expenses / reclassification adjustments and liability for in transit inventory related to oil not considered in returns / statements submitted to bank.

(vii) Based on the Ministry of Company Affairs (MCA) portal, charges aggregating to '' 153.29 crores are appearing as "Open" as

of March 31,2022 which were executed with Banks (the lender) in relation to securing repayment of loan facility related to

year 1979 to 2009. The Company is in process to obtain the No Objection Certificates from the Banks. Once the same is

received, the Company will file the "Satisfaction of Charge" with the Registrar of Companies (ROC).

(viii) Utilisation of borrowed funds and share premium

(I) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities

(Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

Note 52 : Code on Social Security

Note 53 :

Balances of certain trade receivables, advances given and trade payables are subject to confirmation/ reconciliation, if any. The management does not expect any material difference affecting The financial statements on such reconciliation / adjustments.

Note 54 : Event occurred after the Balance Sheet Date:

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May 09, 2022 there were no material subsequent events to be recognized or reported that are not already previously disclosed.

Note 55 :

The previous year''s figures have been regrouped / reclassified, wherever necessary, to conform to the figures of the current year presentation. Amounts for the year ended and as at March 31,2021 were audited by previous auditor M/s S R B C & CO LLP

Mar 31, 2018

1 Corporate information

The financial statements comprise financial statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited (âthe Companyâ) for the year ended March 31, 2018. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognized stock exchanges in India. The registered office of the Company is located at P.O: Narmadanagar-392 015, Dist.: Bharuch, Gujarat.

The Company is one of Indiaâs leading companies engaged in the manufacturing and selling of fertilizers, industrial chemical products and rendering IT services.

The financial statements were authorized for issue in accordance with a resolution of the directors on April 23, 2018.

2 Basis of preparation

2.1 The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended).

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:

- Derivative financial instruments,

- Defined benefit plans - plan assets measured at fair value; and

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).

In addition, the financial statements are presented in INR and all values are rounded to the nearest Crore (INR 00,00,000), except when otherwise indicated.

Changes in accounting policies and disclosures

âThe Company applied for the first time amendments to Ind AS 7 Statement of Cash Flows: Disclosure Initiative, which are effective for the annual periods beginning on or after April 01, 2017.

âThe amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for the current period in Note 13.

3 Significant accounting estimates and assumptions

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

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Taxes

Deferred tax assets are recognized for unused tax credits to the extent that it is probable that taxable profit will be available against which the credits can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Further details on taxes are disclosed in Note 25.

Defined benefit plans (gratuity benefits and other post-employment medical benefits)

The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of these obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, medical cost escalations and mortality rates etc. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality. Those having excessive credit spreads are excluded from the analysis of bonds on which the discount rate is based, on the basis that they do not represent high quality corporate bonds. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Medical cost escalations are based on expected future medical expenditure. Further details about gratuity and post-employment medical benefits obligations are given in Note 41.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 48 for further disclosures.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. Refer Note 44 for further disclosures.

3. During the year the Company has received concession amounting to Rs. 52.44 crores towards Feed Stock Conversion Project, which has been adjusted to the carrying value of plant and equipment in terms of para 37 of Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. The gain (adjustment) of Rs. 10.91 crore arising on decapitalisation is transferred to Other income (refer Note 27).

4. Assets given on lease includes plant and equipment :

- Cost as at March 31, 2018 is Rs. 9.39 crore (March 31, 2017 Rs. 9.39 crore)

- Depreciation as at March 31, 2018 is Rs. 8.92 crore (March 31, 2017 Rs. 8.92 crore)

- Net block as at March 31, 2018 is Rs. 0.47 crore (March 31, 2017 Rs. 0.47 crore)

5. Capital work in progress as at March 31, 2018 is Rs. 13.67 Crore (March 31, 2017 Rs. 14.41 crore) mainly includes cost incurred on plant and equipment procured at TDI-I and TDI-II locations.

(i) As at March 31, 2018 and March 31, 2017 the fair values of the investment property is Rs 57.61 and Rs. 60.05 Crore respectively, based on valuations performed by an accredited independent valuer, who is a specialist in valuing these types of investment properties.

(ii) The Company has no restrictions on the realisability of its investment property and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

(iii) Fair value hierarchy disclosure for investment properties have been provided in Note 48.2.

(b) Investments includes investment in unquoted equity shares. Fair value of unquoted investment in equity instrument have been carried out by independent valuer using Net Assets Value model and Comparable Companies model following Market Approach and Income Approach. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk, volatility, net assets and market multiples. The probabilities of various estimates within the range can be reasonably assessed and are used in managementâs estimates of fair value for these unquoted equity instruments.

Note 4.1. Terms/rights attached to the equity shares Rights preferences and restrictions attached to equity shares:

The company has only one class of equity shares having par value of Rs 10 per share, i.e. equity shares which rank pari passu in all respects. Each holder of equity share is entitled to one vote per share.

For the current financial year 2017-18, the Company has proposed dividend of Rs 7.5 per equity share to equity shareholder (for the previous financial year dividend of Rs 5 per equity share declared).The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

a) Security details

(i) Rupee term loans from banks were secured by way of first mortgage on all immovable properties, both present and future, for which charge was created and were further secured by way of hypothecation created on all non-current assets and second charge by way of hypothecation created on all current assets including inventories and trade receivables.

(ii) Foreign currency term loan from bank is secured by way of first mortgage on all immovable properties, both present and future, for which charge is created and is further secured by way of hypothecation created on all movable fixed assets.

(iii) The above charges are ranking pari-passu among the lenders.

b) Repayment details

(i) A part of Rupee term loans from banks was carrying interest at ranging from 10.60% to 11.50% p.a. (floating) payable on monthly basis. The loan was repayable in quarterly installments starting from 30.09.2012 and ending on 30.06.2017. Outstanding amount as at March 31, 2018 is Rs. nil ( as at March 31, 2017 Rs. 57.60 crore).

(ii) A part of Rupee term loans from banks was carrying interest at ranging from 9.55% to 9.70% p.a. (floating) payable on monthly basis. The loan was repayable in quarterly installments starting from 31.12.2013 and ending on 30.09.2021. During the year, the Company has repaid entire outstanding loan and hence outstanding amount as at March 31, 2018 is Rs. nil (as at March 31, 2017 Rs. 590.38 crore).

(iii) Foreign currency term loan from bank carries interest at 6 month Euribor plus 1.98%, payable on half yearly basis. The loan is repayable in half yearly installments starting from 01.10.2014 and ending on 01.04.2020. Outstanding amount as at March 31, 2018 is Rs. 73.47 crore, which is prepaid on 16.04.2018 ( as at March 31, 2017 Rs. 87.63 crore).

(iv) Unsecured rupee term loan from others was carrying interest at 8.50% p.a. (floating) payable on quarterly basis. The outstanding loan of Rs. 150 crore was repaid on 09.03.2018 (as at March 31, 2017 Rs. 150 crore).

Security details

Short term borrowings from banks as cash credit and overdraft accounts of Rs. 102.86 Crore (March 31, 2017: Rs. 568.84 Crore), Short-Term Loans and Advances from Banks of Rs. 51.22 Crore (March 31, 2017: Rs. 247.46 Crore) and PCFC Export Credit in Foreign Currency from Banks of Rs. 6.66 Crore (March 31, 2017: Rs. nil) are secured by first charge by way of hypothecation of inventories and trade receivables and all other movable assets, both present and future and further secured by second charge by way of mortgage on all immovable properties. These charges are ranking pari-passu among the working capital lenders.

Interest rate details for short term borrowings:

(i) Cash credit accounts carries interest rates ranging from 7.85% to 9.70% p.a.

(ii) Packing Credit in Foreign Currency (PCFC) carries interest rate of 3 months LIBOR 1% p.a.

(iii) Other loans and advances from banks carries interest rate of 0.96% p.a.

(iv) Commercial papers carries interest at ranging from 6.16% to 6.60% p.a.

(v) Buyers credit carries interest at ranging from 1.81% to 2.45% p.a.

The capital grant from Government of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers for feed stock conversion project from âLSHS/FOâ to âGasâ vide sanction letter no 14023/22/2007-FP dated 14.12.2009 has accrued since the conditions attached to the grant have been fulfilled by the Company. Accordingly the grant of Rs. 1,215.74 crore was recorded as contemplated under Para 7 and 12 of Ind AS - 20 on âAccounting for Government Grants and Disclosure of Government Assistanceâ. The Government would reimburse the above grant over a period of 5 Years. The scrutiny of project cost is completed by the Government appointed team during the previous year ended March 31, 2017 and the Grant to be disbursed was finalised at Rs. 1,213.06 crore, whereby an amount of Rs. 2.68 crore was derecognised during the previous year 2016-17.

Note - a

The Company has created a contingency provision of Rs. 12.66 crore (previous year Rs. Nil) towards policy uncertainties related to the Companyâs claims with the Government authorities based on the management assessment. The movement of contingency provision is as under:

g) The Company made tax provision as per normal income tax provisons of the Income Tax Act, 1961. Based on this, the Company has made provision of Rs. 383.70 crore (previous year Rs. 82.63 crore under Minimum Alternate Tax provisons as per Section 115JB of the Income Tax Act, 1961) and has recognised MAT credit of Rs. 21.92 crore pertaining to earlier years (previous year Rs. 89.61 crore, which includes Rs. 30.99 crore for the financial year 2013-14 and Rs. 0.05 crore for the financial year 2015-16) as the management believes, in view of improved performance of the Company during the year and better projected future profitability for the Company, it is possible that the MAT credit will be utilized in the future period w.e.f. financial year 2018-19.

h) The Company has following unutilised MAT credit under the Income Tax Act, 1961 for which deferred tax assets has been recongnised in the Balance Sheet at.

i) During the year ended March 31, 2018, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity, (refer Note 17.3).

Note 5 :Related party disclosures:

Related party disclosures, as required by Ind AS-24, âRelated Party Disclosuresâ, are given below:

(i) Related parties with whom transactions have taken place during the period:

Wholly Owned Subsidiary : Gujarat Ncode Solutions Limited

Associate : Gujarat Green Revolution Company Limited

Key Management Personnel and their relatives : Dr J N Singh, IAS, Chairman & Director*

Dr. Rajiv Kumar Gupta, IAS, Managing Director

Smt. Mamta Verma, IAS, Director

Shri G R Aloria, IAS, Chairman & Director#

Shri Anil Mukim, IAS, Director**

Prof. Arvind Sahay, Independent Director

Shri C S Mani, Independent Director

Shri Sunil Parekh, Independent Director

Shri Piruz Khambatta, Independent Director

Shri V D Nanavaty, Director

* Appointed as chairman w.e.f 31.08.2016 ** Ceased to be Director w.e.f 07.03.2018

# Ceased to be Director & chairman w.e.f 24.08.2016

Entities over which Key Management Personnel having significant influence : EcoPhos GNFC India Private Limited

Note 6 : Pursuant to Ind AS-17 - âLeasesâ, the following information is disclosed:

(i) The Company has taken various warehouses, godowns, guesthouses and office premises under operating lease or rental agreements. These are generally cancellable having a term of one year extendable for further one year on the discretion of the Company and are of rental nature. Payments are recognised in the statement of profit and loss under Note 34 - Other expenses.

(ii) Rent income also includes lease rentals received towards office premises. Such operating lease is generally for a period of three to four years. There are no restrictions imposed by lease arrangements.

Note 7: Gratuity and other post employment benefit plans:

A. Defined contribution plans:

Amount of Rs. 31.95 Crores (March 31, 2017: Rs. 32.01 Crores) is recognised as expenses and included in note no. 31 âEmployee benefit expenseâ

B. Defined benefit plans:

The Company has following post employement benefits which are in the nature of defined benefit plans:

(a) Gratuity

(b) Post retirment medical benefit

Each year the management reviews the level of funding in the gratuity fund. Such review includes the asset - liability matching strategy. The management decides its contributions based on the results of this review. The management aim to keep annual contributions relatively stable at a level such that no plan deficit (based on valuation performed) will arise.

The plan for the Post retirement medical benefit is unfunded.

The following table summarises the components of net benefit expense recognised in statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

Note: Method of accounting of investments in subsidiary and associate Company is at cost.

NOTE: 8

The Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs. 6 crore, was sanctioned by Honâble High Court of Gujarat vide its Common Oral Order dated June 15, 2012.

The âAppointed Dateâ of the Scheme is 1st April, 2010.

Subsequent to the Order passed by the Honâble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licences standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited were submitted to Department of Telecommunications (DOT) on January 31, 2013 which are still pending for approval before DOT.

As per the legal opinion obtained from legal consultant, though the Scheme has been sanctioned by the Honâble High Court of Gujarat and has become effective, the scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licences from the Company to ING Satcom Limited.

During the year 2014-15, an agreement-Cum-Indemnity Bond was executed on 12.04.2014 between the Company and ING Satcom Limited whereby, pending transfer of Licences, the assets of demerged business (other than Licences) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licences by 31.12.2014.

NOTE: 9 - Reversal of impairment provision - Exceptional item

During the year ended March 31, 2015, the Company had accounted an impairment loss of Rs. 330 Crore in respect of Toluene Di-Isocynate (âTDIâ) plant at Dahej being a separate Cash Generating Unit (âCGUâ), considering the issue of gas emmision, teething problem in bringing the plant at effective utilisation level and significantly low realisable value of finished goods.

Consequent to improved international scenario of TDI products over the past two years and forecast of their continuance at substantially higher levels than have prevailed in the past few years and also achievement of sustained production levels, the management had reviewed and reassessed the value in use of the TDI Plant at Dahej.

As the TDI Dahej plant is operating at higher capacity level and due to favourable market conditions, there is a change in assumptions / estimates applied for calculating the impairment loss during FY 2014-15. Based on such assessment, the Company had reversed the amount of Rs. 292.23 crore consisting of impairment loss of Rs. 330 Crore, net off the depreciation for the 2 years (aggregating Rs. 37.77 crores), which would have been otherwise charged , if there was not an impairment loss. The reversal has been disclosed as an exceptional item in the statement of profit and loss for the previous year

The recoverable amount of the relevant CGU had been determined on the basis of their value in use considering the pre tax discounting rate of 16.98% which is the same as considered in the previous estimate of value in use at the time of impairment provision. Further, the underlying assumption i.e. realisable value of products, exchange rate variation and operating parameters that would impact future cash flows for determining the TDI Plant, value in use, is being continuosly monitored on a periodic basis by the Management.

Note: 10 Segment Information

- Operating Segments

The identified reportable segments are Fertilizers, Chemicals and Others in terms of the requirements of Ind AS 108 âOperating Segmentsâ as notified under section 133 of the Companies Act, 2013. Other Segment mainly includes Information Technology division activities and neem product related activities.

- Identification of Segments:

The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.

- Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure and unallocable income.

- Segment assets and liabilities:

Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade receivables, inventory and other operating assets. Segment liabilities primarily include trade payable and other liabilities. Common assets and liabilities which cannot be allocated to any of the business segments are shown as unallocable assets / liabilities.

- Inter Segment transfer:

Inter Segment revenues are recognised at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the Company level.

Summary of segment information is given below:

11.1 Fair value measurements:

a) Quantitative disclosures of fair value measurement hierarchy for financial assets and financial liabilities

The following table provides the fair value measurement hierarchy of the Companyâs financial assets and liabilities:

b) Description of significant unobservable inputs to valuation:

The significant unobservable inputs used in the fair value measurement categorised within Level 3 ofthe fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2018 and March 31, 2017 are as shown below:

c) Financial Instrument measured at amortised cost

11.2 Financial Risk objective and policies:

The Companyâs principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include loans, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

In the ordinary course of business, the Company is mainly exposed to risks resulting from exchange rate fluctuation (currency risk), interest rate movements (interest rate risk) collectively referred as Market Risk, Credit Risk, Liquidity Risk and other price risks such as equity price risk. The Companyâs senior management oversees the management of these risks. It manages its exposure to these risks through derivative financial instruments by hedging transactions as required. It uses derivative instruments such as interest rate swaps and foreign currency forward contract to manage these risks. These derivative instruments reduce the impact of both favourable and unfavourable fluctuations.

The decision of whether and when to execute derivative financial instruments along with its tenure can vary from period to period depending on market conditions and the relative costs of the instruments. The tenure is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company is exposed to losses in the event of non-performance by the counterparties to the derivative contracts. All derivative contracts are executed with counterparties that, in managementâsjudgment, are creditworthy. The outstanding derivatives are reviewed periodically to ensure that there is no inappropriate concentration of outstanding to any particular counterparty.

Further, all currency and interest risk as identified above is measured on a daily basis by monitoring the mark to market (MTM) of open and hedged position. The MTM is derived basis underlying market curves on closing basis of relevant instrument quoted on Bloomberg/Reuters. For year ends, the MTM for each derivative instrument outstanding is obtained from respective banks. All gain / loss arising from MTM for open derivative contracts and gain / loss on settlement / cancellation / roll over of derivative contracts is recorded in statement of profit and loss.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, FVTOCI investments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant as at March 31, 2018. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions.

The following assumptions have been made in calculating the sensitivity analysis:

(i) Interest rate risk

The Company is exposed to changes in market interest rates due to financing, investing and cash management activities. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long-term debt obligations with floating interest rates and period of borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company enters into interest rate swap contracts or interest rate future contracts to manage its exposure to changes in the underlying benchmark interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as fol lows:

If interest rates had been 50 basis points higher / lower and all other variables were held constant, the Companyâs profit for the year ended March 31, 2018 would decrease / increase by Rs. Nil (previous year Rs. 7.99 crore). This is mainly attributable to interest rates on variable rate long term borrowings.

(ii) Foreign currency risk

Exchange rate movements, particularly the United States Dollar (USD) and Euro (EUR) against Indian Rupee (INR), have an impact on the Companyâs operating results. The Company manages its foreign currency risk by entering into currency swap for converting INR loan into other foreign currency for taking advantage of lower cost of borrowing in stable currency environment. The Company also enters into various foreign exchange contracts to mitigate the risk arising out of foreign exchange rate movement on foreign currency borrowings or trade payables. Further, to hedge foreign currency future transactions in respect of which firm commitment are made or which are highly probable forecast transactions (for instance, foreign exchange denominated income) the Company has entered into foreign currency forward contracts as per the policy of the Company.

The details of exposures hedged using forward exchange contracts are given as a part of Note 48 and the details of unhedged exposures are given as part of Note 47

The Company is mainly exposed to changes in USD and EURO. The below table demonstrates the sensitivity to a 5% increase or decrease in the respective foreign currency rates against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents managementâs assessment of reasonably possible change in foreign exchange rate.

(III) Commodity price risk

The Companyâs operating activities require the ongoing purchase of natural gas. Natural gas being an international commodity is subject to price fluctuation on account of the change in the crude oil prices, demand supply pattern of natural gas and exchange rate fluctuations. The Company is not affected by the price volatility of the natural gas to the extent consumed for Urea as under the Urea pricing formula the cost of natural gas is pass through if the consumption of natural gas is within the permissible norm for manufacturing of Urea.

The Company also deals in purchase of other feed stock materials (i.e Rock phosphate, and Denatured Ethyl Alcohol) which are imported by the Company and used in the manufacturing of Ammonium Nitro Phosphate and Ethyl Acetate. The import prices of these materials are governed by international demand and supply pattern. There is a price and material availability risk, which is managed by senior management team through sensitivity analysis, commodity price tracking.

(IV) Equity price risk

The Companyâs listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Companyâs senior management on a regular basis. The Companyâs Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was Rs. 360.18 crore. Sensitivity analyses of these investments have been provided in Note 48.2(b).

At the reporting date, the exposure to listed equity securities at fair value was Rs. 364.56 crore. A decrease of 5% on the BSE market price could have an impact of approximately Rs. 18.23 crore on the OCI or equity attributable to the Group. An increase of 5% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

b) Credit risk

Customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

Credit risk from balances with banks is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Companyâs Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Companyâs management. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.

Trade Receivables

The Companyâs receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the central and state Government in the form of subsidy. As far as Government portion of receivables is concerned, credit risk is Nil. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extensions of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as for certain products it extends rolling credit to its customers, against the collateral.

The Company follows a âsimplified approachâ (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade receivables, other than those receivables from the Government of India. For the purpose of measuring lifetime ECL allowance for trade receivables, the company estimates irrecoverable amounts based on the ageing of the receivable balances and historical experience in respect of certain categories of the customers. Individual trade receivables are written off when management deems them not to be collectible

c) Liquidity Risk

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

11.3 Capital management

For the purposes of the Companyâs capital management, capital includes issued capital and all other equity. The primary objective of the Companyâs capital management is to maximize shareholder value. The Company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants. The Company monitors capital using gearing ratio, which is net debt (total debt less cash and bank balance) divided by total capital plus net debt.

During the year , the Company has repaid its borrowings of Rs. 471 crore before the maturity date to achieve the objective of better capital management.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.

Note 12 : Standards Issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

(a) Ind AS 115 Revenue from Contracts with Customers

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. Ind AS 115 is effective for the Company in the first quarter of fiscal 2019 using either one of two methods: (i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or (ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1 April 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method). The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Companyâs considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements. The Company has established an implementation team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary.

Upon adoption the Company expects there to be a change in the manner that variable consideration in certain revenue arrangements is recognized from the current practice of recognizing such revenue as the services are performed and the variable consideration is earned to estimating the achievability of the variable conditions when the Company begins delivering services and recognizing that amount over the contractual period. The Company also expects a change in the manner that it recognizes certain incremental and fulfilment costs from expensing them as incurred to deferring and recognizing them over the contractual period. A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

(b) Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are effective for annual periods beginning on or after April 1, 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in managementâs intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

The amendments are effective for annual periods beginning on or after April 1, 2018. The Company will apply amendments when they become effective. However, since Companyâs current practice is in line with the clarifications issued, the Company does not expect any effect on its financial statements.

(d) Amendments to Ind AS 28 - Investments in Associates and Joint Ventures:

The amendments clarify that:

- An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates andjoint ventures at fair value through profit or loss.

- If an entity, that is not itself an investment entity, has an interest in an associate orjoint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate orjoint venture to the investment entity associateâs orjoint ventureâs interests in subsidiaries. This election is made separately for each investment entity associate orjoint venture, at the later of the date on which: (a) the investment entity associate orjoint venture is initially recognised; (b) the associate orjoint venture becomes an investment entity; and (c) the investment entity associate orjoint venture first becomes a parent.

The amendments should be applied retrospectively and are effective from 1 April 2018. These amendments are not applicable to the Company.

(e) Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

(i) The beginning of the reporting period in which the entity first applies the Appendix, or

(ii)The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after April 1, 2018. However, since the Companyâs current practice is in line with the Interpretation, the Company does not expect any effect on its financial statements.

Note 13 : Event occurred after the Balance Sheet Date:

âThe Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of April 23, 2018, there were no material subsequent events to be recognized or reported that are not already previously disclosed.

Mar 31, 2017

* Amount nullified on conversion to Rs in Crores

** During the previous year ended March 31,2016, the Company had received 53,289 equity shares of Gujarat Gas Ltd. of Rs.10/- each in lieu of 50,000 equity shares of GSPC Gas Co. Ltd. of Rs. 10/- each, pursuant to the composite scheme of amalgamation and arrangement.

*** Shares of EcoPhos GNFC Pvt Ltd are in the process of registration.

(a) The fair value of the quoted equity investments are derived from quoted market prices in active market.

(b) Investments includes investment in unquoted equity shares. Fair value of unquoted investment in equity instrument have been carried out by independent valuer using Net Asset Value model and Comparable Companies model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk, volatility. The probabilities of various estimates within the range can be reasonably assessed and are used in management''s estimates of fair value for these unquoted equity instruments.

Note:

No trade or other receivables are due from directors or other officers of the company either severally or jointly with any other person; nor any trade or other receivables are due from firms or private companies in which any director is a partner, a director or a member.

Note 1. Terms/rights attached to the equity shares Rights preferences and restrictions attached to equity shares:

For the current financial year 2016-17, the Company has proposed dividend of Rs 5 per equity share to equity shareholder (declared for the previous financial year dividend of Rs 2 per equity share).The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 2 :Related party disclosures:

Related party disclosures, as required by Ind AS-24, âRelated Party Disclosuresâ, are given below:

(i) Related parties with whom transactions have taken place during the period: Associate : Gujarat Green Revolution Company Limited

Key Management Dr J N Singh, IAS, Chairman & Director*

Personnel and Dr. Rajiv Kumar Gupta, IAS, Managing Director their relatives : Shri G R Aloria, IAS, Chairman & Director**

Smt. Mamta Verma, IAS, Director Shri Anil Mukim, IAS, Director***

Prof. Arvind Sahay, Independent Director Shri C S Mani, Independent Director Shri Sunil Parekh, Independent Director Shri Piruz Khambatta, Independent Director Shri V D Nanavaty, Director Shri H V patel, IAS#

Shri D J Pandian, IAS, Director @

* Appointed as chairman w.e.f 31.08.2016.

** Ceased to be Director & chairman w.e.f 24.08.2016 *** Appointed as director w.e.f 30.09.2016.

# Ceased to be director w.e.f 14.04.2016

@ Ceased to be a Director w.e.f. 05.06.2015

Entities over which Key Management Personnel having

significant influence: EcoPhos GNFC India Private Limited

# During the year Ecophos GNFC India Private Limited has issued 2,32,01,200 shares of face value Rs 10 each at the value of Rs 10 each against the sublease of land at Dahej, amounting to Rs 23.20 crore as non-cash consideration.

Note 3. Disclosure of specified bank note

Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide Notification G.S.R. 308(E) dated 30th March, 2017. The said amendment requires the Company to disclose the details of Specified Bank Notes (âSBNsâ) held and transacted during the period from November 08, 2016 to December 30, 2016. For the purpose of this clause, the term âSpecified 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.

Note 4: Pursuant to Ind AS-17 - âLeasesâ, the following information is disclosed:

(i) The Company has taken various warehouses, god owns, guesthouses and office premises under operating lease or rental agreements. These are generally cancellable having a term of one year extendable for further one year on the discretion of the Company and are of rental nature. Payments are recognized in the statement of profit and loss under Note 34 - Other expenses.

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

(b) Post retirement medical benefit

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity as per payment of Gratuity Act, 1972. The Scheme is funded with Gratuity Trust, which in turn makes contribution to Life Insurance Corporation of India (LIC) in the form of qualifying insurance policy for future payment of gratuity to the employees. Each year the management reviews the level of funding in the gratuity fund. Such review includes the asset - liability matching strategy. The management decides its contributions based on the results of this review. The management aim to keep annual contributions relatively stable at a level such that no plan deficit (based on valuation performed) will arise.

The plan for the Post retirement medical benefit is unfunded.

NOTE: 5

The Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs. 6 crore, was sanctioned by Hon''ble High Court of Gujarat vide its Common Oral Order dated June 15, 2012.

The âAppointed Dateâ of the Scheme is 1st April, 2010.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licences standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited were submitted to Department of Telecommunications (DOT) on January 31, 2013 which are still pending for approval before DOT.

As per the legal opinion obtained from legal consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective, the scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licences from the Company to ING Satcom Limited. During the year 2014-15, an agreement-Cum-Indemnity Bond was executed on 12.04.2014 between the Company and ING Satcom Limited whereby, pending transfer of Licences, the assets of demerged business (other than Licences) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licences by 31.12.2014. Since disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities as well as settlement of transaction between the Company and ING Satcom Limited are still pending, no accounting treatment is given in the books of account of the Company since 2014-15 till the financial year ended 31.03.2017.

NOTE: 6 - Reversal of impairment provision - Exceptional item

During the year ended March 31, 2015, the Company had accounted an impairment loss of Rs. 330 Crore in respect of Toluene Di-Isocynate ("TDI") plant at Dahej being a separate Cash Generating Unit ("CGU"), considering the issue of gas emmision, teething problem in bringing the plant at effective utilization level and significantly low realizable value of finished goods.

Consequent to improved international scenario of TDI products over the past one year and forecast of their continuance at substantially higher levels than have prevailed in the past few years and also achievement of sustained production levels, the management has reviewed and reassessed the value in use of the TDI Plant at Dahej.

As the TDI Dahej plant is operating at higher capacity level and due to favorable market conditions, there is a change in assumptions / estimates applied for calculating the impairment loss during FY 2014-15. Based on such assessment, the Company has reversed the amount of Rs. 292.23 crore consisting of impairment loss of Rs. 330 Crore, net off the depreciation for the 2 years (aggregating Rs. 37.77 crores), which would have been otherwise charged , if there was not an impairment loss. The reversal is disclosed as an exceptional item in the statement of profit and loss of the year ended March 31, 2017.

The recoverable amount of the relevant CGU has been determined on the basis of their value in use considering the pre tax discounting rate of 16.98% which is the same as considered in the previous estimate of value in use at the time of impairment provision. Further, the underlying assumption i.e. realizable value of products, exchange rate variation and operating parameters that would impact future cash flows for determining the TDI Plant value in use will continue to be monitored on a periodic basis by the Management.

NOTE: 7 - Subsidy income recognition

(A) On conversion of feed stock based Ammonia Plant from LSHS to Natural Gas for production of Urea, the Company has recognized Urea subsidy Income in the books during October, 2013 till March, 2016 based on actual energy consumption norms during the operation of the plant, which varied from 6.771 GCAL/MT to 6.965 GCAL/MT. The energy consumption norms, as per Department of Fertilizer (DoF) is 6.301 GCAL/MT of Urea, which, as per management, is based on Draft Feasibility Report (DFR) of Project and Development India Limited (PDIL) issued in the month of July, 2009. DoF vide its notification dated October 15, 2015 has concluded the energy consumption norms at 6.301 GCAL/MT for the Company. However, till the year ended March 31, 2016, the Company, through various representation made to the DoF, supported by updated reports of PDIL, continued to recognize Urea subsidy based on the actual energy norms as achieved till March 31, 2016.

In the current year, the management has revised the accounting of the subsidy income based on the notified energy norms of 6.301 GCAL/MT of urea instead of the actual energy norms achieved by the Company, and has revised earlier period estimation of the subsidy income. Due to such change in the estimate, Urea subsidy receivable / revenue for the year is adjusted negatively by Rs. 216.04 Crores for the period from October, 2013 to March, 2016 and this change will also affect urea subsidy / revenue income of the current year and subsequent period.

Further, the estimation made to compute the cost of the energy consumed, i.e. Natural Gas, between the Urea production and power generation utilities has been revised, whereby the cost of raw material consumed for Urea and cost of the utilities has also been effected in the books. This has also resulted in change in segment reporting for the year.

(B) Subsidy on Ammonium Nitro Phosphate (ANP) is allowed by Government of India (GoI) under Nutrient Based Subsidy (NBS) Scheme w.e.f. 01-04-2010 for Nitrogen, Phosphorus, and Potassium (NPK) fertilizers at the rate prescribed by GoI. A separate additional compensation on ANP was also allowed by GoI for FY 2010-11 and 2011-12 to the Company and two other companies producing complex fertilizers from Naphtha / Fuel Oil / LSHS based Ammonia to compensate the higher cost of production of Nitrogen âNâ. The Company has requested to the GoI for extension of additional compensation on ANP for three more years. Considering the request, the GoI has initiated a study through the Tariff Commission for determining additional compensation for complex fertilizers produced by using high cost feed stock. The Company has, from time to time, submitted the data as requested and has been making regular follow up with the GoI. Considering the fact that in similar case, one of the other fertilizer production companies has received the additional compensation for an extended period, the Company is confident that the GoI will consider the Company''s case favorably for allowing the additional compensation for which revenue has been recognized in the books of account in FY 2013-14. The amount of accrual for such subsidy is Rs. 74 Crore.

Note: 8 Segment Information Operating Segments

The identified reportable segments are Fertilizers, Chemicals and Others in terms of the requirements of Ind AS 108 "Operating Segments" as notified under section 133 of the Companies Act, 2013. Other Segment mainly includes Information Technology division activities.

Identification of Segments:

Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as unallowable expenditure and unallowable income.

Segment assets and Liabilities:

Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipments, trade receivables, Inventory and other operating assets. Segment liabilities primarily includes trade payable and other liabilities. Common assets and liabilities which cannot be allocated to any of the business segment are shown as unallowable assets / liabilities.

Inter Segment transfer:

Inter Segment revenues are recognized at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the Company level.

c) Financial Instrument measured at amortized cost

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

50.3 Financial Risk objective and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations/projects. The Company''s principal financial assets include loans, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

In the ordinary course of business, the Company is mainly exposed to risks resulting from exchange rate fluctuation (currency risk), interest rate movements (interest rate risk) collectively referred as Market Risk, Credit Risk, Liquidity Risk and other price risks such as equity price risk. The Company''s senior management oversees the management of these risks. It manages its exposure to these risks through derivative financial instruments by hedging transactions. It uses derivative instruments such as interest rate swaps and foreign currency forward contract to manage these risks. These derivative instruments reduce the impact of both favorable and unfavorable fluctuations.

The Company''s risk management activities are subject to the management, direction and control of the management of the Company under the guideline of the Board of Directors of the Company. The management ensures appropriate financial risk governance framework for the Company through appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

The decision of whether and when to execute derivative financial instruments along with its tenure can vary from period to period depending on market conditions and the relative costs of the instruments. The tenure is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company is exposed to losses in the event of nonperformance by the counterparties to the derivative contracts. All derivative contracts are executed with counterparties that, in management''s judgment, are creditworthy. The outstanding derivatives are reviewed periodically to ensure that there is no inappropriate concentration of outstanding to any particular counterparty.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, FVTOCI investments and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2017 and March 31, 2016.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations; provisions. The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016.

(i) Interest rate risk

The Company is exposed to changes in market interest rates due to financing, investing and cash management activities. The Company''s exposure to the risk of changes in market interest rates relates primarily to The Company''s long-term debt obligations with floating interest rates and period of borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company enters into interest rate swap contracts or interest rate future contracts to manage its exposure to changes in the underlying benchmark interest rates.

Interest rate sensitivity

The following details demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

If interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company''s profit for the year ended March 31, 2017 would decrease / increase by Rs. 7.99 crore (previous year Rs. 16.21 crore). This is mainly attributable to interest rates on variable rate long term borrowings.

(ii) Foreign currency risk

Exchange rate movements, particularly the United States Dollar (USD) and Euro (EUR) against Indian Rupee (INR), have an impact on the Company''s operating results. The Company manages its foreign currency risk by entering into currency swap for converting INR loan into other foreign currency for taking advantage of lower cost of borrowing in stable currency environment. The Company also enters into various foreign exchange contracts to mitigate the risk arising out of foreign exchange rate movement on foreign currency borrowings or trade payables. Further, to hedge foreign currency future transactions in respect of which firm commitment are made or which are highly probable forecast transactions (for instance, foreign exchange denominated income) the Company has entered into foreign currency forward contracts as per the policy of the Company. The carrying amounts of the Company''s foreign currency denominated monetary items are as follows:

The above table represents total exposure of the Company towards foreign exchange denominated liabilities (net). The details of exposures hedged using forward exchange contracts are given as a part of note 49 and the details of unheeded exposures are given as part of note 49.

The Company is mainly exposed to changes in USD and EURO. The below table demonstrates the sensitivity to a 5% increase or decrease in the respective foreign currency rates against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unheeded exposure of the Company as at the reporting date. 5% represents management''s assessment of reasonably possible change in foreign exchange rate.

(III) Equity price risk

The Company''s non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

b) Credit risk

Credit risk from balances with banks is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s management. The limits are set to minimize the concentration of risks and

9. Capital management

The Company monitors capital using gearing ratio, which is net debt (total debt less cash and bank balance) divided by total capital plus net debt.

therefore mitigate financial loss through counterparty''s potential failure to make payments.

Concentrations of Credit Risk form part of Credit Risk

Considering that the Company manufactures fertilizer products and industrial products and rendering IT services , the Company is significantly dependent on subsidy claims receivables from Government for manufacture of fertilizers. Out of total revenue, the Company earns Rs. 1,685.12 crore of revenue during the year ended March 31, 2017 (previous year Rs. 1,977.95 crore) from fertilizer manufacturing and trading which constitute 34.08% (previous year 40.82%). Accounts receivable on account of subsidy claim receivable from Government approximated Rs. 635.26 crore as at March 31, 2017 and Rs. 1,162.13 crore as at March 31, 2016. A loss of these customer could adversely affect the operating result or cash flow of the Company.

c) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and bank balances. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner. The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.

10 First-time adoption of Ind-AS

These financial statements, for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its annual financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for the year ending on March 31,2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2015, the Company''s date of transition to Ind AS and financial statements as at and for the year ended March 31, 2016.

11. Exemptions availed on the first time adoption of Ind AS 101

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

(a) The Company has elected to avail exemption under Ind AS 101 to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items outstanding and recognized in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.

(b) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

The estimates at April 01, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- FVTOCI - quoted and unquoted equity shares

- Impairment of financial assets based on the risk exposure and application of ECL model

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 01, 2015, the date of transition to Ind AS and as of March 31, 2016.

(d) Fair value measurement of financial assets or liabilities:

The Company has applied provision of Ind AS 109 for financial assets or liabilities measured at fair value prospectively to transactions occurring on or after the date of transition to Ind AS.

12 In the quarterly unaudited financial results published by the Company for the period ended June 30, 2016 , September 30, 2016 and December 31, 2016, the Company had elected to avail exemption under Ind AS 101 to use India GAAP carrying value as deemed cost at the date of transition for all items of property, plant and equipment, investment property and intangible assets as per the statement of financial position prepared in accordance with previous GAAP.

However in its first Ind AS financial statements, the company has accounted its property, plant and equipment, investment property and intangible asset, being measured at cost in accordance with Ind AS-16 - "Property, Plant and Equipment", Ind AS-40 - "Investment Property" and Ind AS-38 - "Intangible Asset", respectively. This change does not have material impact on profit and loss.

13 The Company''s management had previously issued its audited financial results for the year ended March 31, 2016 on April 26, 2016, that were all prepared in accordance with the recognition and measurement principles of the Companies (Accounting Standards) Rules, 2006 prescribed under Section 133 of the Companies Act, 2013, read with the relevant rules issued thereunder and other accounting principles generally accepted in India (''Previous GAAP''). The Company''s management has now prepared the Ind AS Financial Statements for the year ended March 31, 2017 in accordance with the recognition and measurement principles laid down by the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India.

Explanatory notes to the transition from previous GAAP to Ind AS :

(a) Cost determined in accordance with Ind AS 16 - The Company has recomputed the cost of Property, Plant and Equipment in accordance with Ind AS 16 and have adjusted value of PPE to make it compliant under Ind AS 16.

(b) Export Promotion Capital Goods (EPCG) as Property, Plant & Equipment (PPE): The Company has availed EPCG benefit for duty free import of capital goods for construction of its plant. The same was disclosed as commitments in the previous GAAP. In Ind AS, the company has capitalized the amount of duty saved under EPCG licences.

(c) Investment property :As per Para 7 of Ind As 40 - â Investment Propertyâ, properties held to earn rentals or for capital appreciation or both is to be classified as investment property. Accordingly Company has distinguished investment property from owner-occupied property.

(d) Fair valuation of equity instruments : Under Indian GAAP, the Company accounted for long term investments in quoted and unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Company has designated such investments as FVTOCI investments. Ind AS requires FVTOCI investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount (after adjusting the provision for diminution in value of investment) has been recognized as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes. The reversal of provision for diminution in value of investment is adjusted in the retained earnings.

(e) Deferred tax : Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.

(f) Remeasurement cost of net defined liability : Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

(g) Other comprehensive income : Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

(h) Borrowings (part of financial liabilities) : Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

(i) Deferred tax asset on carry forward losses and unabsorbed depreciation : As per Ind AS Deferred tax asset is recognized on carry forward losses and unabsorbed depreciation based on the probability of the Company''s ability to utilize the carried forward losses and unabsorbed depreciation in future years, which under previous GAAP was based on virtual certainty.

(j) Classification and fair value measurement of financial assets and financial liabilities: The Company has assessed the classification and fair valuation impact of financial assets and liabilities under Ind AS 32 / Ind AS 109 on the basis of the facts and circumstances at the transition date. Impact of fair value changes as on date of transition, is recognized in opening reserves and changes thereafter are recognized in Statement of profit and loss or other comprehensive income, as the case may be.

(k) Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss.

(l) Measurement of Government Grant as Deferred Income: The government grant release during the year in the profit or loss, related to property, plant and equipment was netted off with the depreciation under the previous GAAP. Under Ind AS it is shown separately as other income.

(m) Statement of cash flows: The transition from Indian GAAP to Ind AS does not have material impact on the statement of cash flows.

Note 14.: Exposure Drafts and Accounting Standards not yet notified The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standard:

(a) Amendments to Ind AS 7, Statement of Cash Flows: The amendments to Ind AS

7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after April 01, 2017. Application of this amendments will not have any recognition and measurement impact. However, it will require additional disclosure in the financial statements.

(b) Amendments to Ind AS 102, Share-based Payment: The MCA has issued amendments to Ind AS 102 that address three main areas

i) the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction,

ii) the classification of a share-based payment transaction with net settlement features for withholding tax obligations, and

iii) accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. The amendments are effective for annual periods beginning on or after April 01, 2017.

These amendments does not have material impact on Company''s financial statements. The Company will adopt these amendments from their applicability date.

Note 15.: Event occurred after the Balance Sheet Date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May 29, 2017, there were no material subsequent events to be recognized or reported that are not already previously disclosed.

Mar 31, 2016

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016

The capital grant from Govt. of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers for feed stock conversion project from âLSHS/FO'' to âGas'' vide sanction letter no 14023/22/2007-FP dated 14.12.2009 has accrued since the conditions attached to the grant have been fulfilled by the Company. The grant has been accordingly accounted for as contemplated under para 6.1 of Accounting Standard -12 on âAccounting for Government Grants''. The Government would reimburse the above grant over a period of 5 Years. The project cost that would be disbursed shall be admitted after scrutiny by a team constituted by the Government. The variations, if any, in the amount involved in the grant to be disbursed shall be accounted for by the Company in the year scrutiny of project cost is completed by the Government appointed team.

a. Security details:

(i) Rupee term loans from banks are secured by way of first mortgage on all immovable properties, both present and future for which charge is created and are further secured by way of hypothecation created on all non-current assets and second charge by way of hypothecation created on all current assets including stocks and book debts.

(ii) Foreign currency term loan from bank is secured by way of first mortgage on all immovable properties, both present and future for which charge is created and is further secured by way of hypothecation created on all movable fixed assets.

(iii) The above charges are ranking pari-passu among the lenders.

b. Repayment details:

(i) Rupee term loans from banks of Rs. 1,15,453 lacs carries interest @ 10.80% ~ 11.50% p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 30.09.2012 and ending on 30.06.2017.

(ii) Rupee term loans from banks of Rs. 1,03,600 lacs carries interest @ 9.65%~10.40% p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 31.12.2013 and ending on 30.09.2021.

(iii) Foreign currency term loan from bank carries interest @ 6 month Euribor plus 1.98% payable on half yearly basis. The loan is repayable in half yearly installments starting from 01.10.2014 and ending on 01.04.2020.

(iv) Unsecured rupee term loan from other of Rs. 20,000 lacs carries interest @ 9.50% p.a. (floating) payable on quarterly basis. Outstanding amount of Rs. 12,000 Lacs as on 31-03-2016 is payable on 23.12.2016 in single installment.

(v) Unsecured rupee term loan from other of Rs. 30,000 lacs carries interest @ 9.50% p.a. (floating) payable on quarterly basis. The loan is repayable in two yearly equal installments of Rs. 15,000 lacs each on 10.03.2017 and 09.03.2018.

Notes:

1 Additions to Fixed Assets during the year include Rs. Nil (previous year: Rs. Nil) used for research and development.

2 Leasehold Land pertains to the costs incurred for Leasehold Land in possession of the Company as a Licensee, pending completion of formalities for execution of the lease agreement for a term of 99 years.

3 Feed Stock Conversion Projects from âLSHS /FO â to âGas'' acquired under Government''s policy for reimbursement of project cost to the Company over a period of five years from the date of commercial production, have been capitalized on 01.10.2013. Accordingly, Fixed Assets include assets amounting to Rs. 1,30,108.27 Lacs represented by capital grant of Rs. 1,21,574.00 Lacs as contemplated in Note- 3 earlier.

4. Other Commitments:

(i) The Company is committed to invest a further sum of Rs. Nil (31-03-2015: Rs. 999 lacs) in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) as per the terms of the Shareholders'' Agreement. The Company is also committed to grant subordinate debt of Rs. 540 lacs (31-03-2015: Rs. 540 lacs) to BECL in the manner and in the form as may be finalized by the promoters with BECL.

(ii) Export obligation on account of benefit of concessional rate of Custom duty availed under EPCG license scheme on imports of capital goods is Rs. 26,924 lacs (31-03-2015: Rs. 48,653 lacs).

(b) Subsidy on Ammonium Nitro Phosphate (ANP) is allowed by Government of India (Gol) under Nutrient Based Subsidy (nBs) Scheme w.e.f. 01-04-2010 for Nitrogen, Phosphorus, and Potassium (NPK) fertilizers at the rate prescribed by Gol. A separate additional compensation on ANP was also allowed by Gol for FY 2010-11 and 2011-12 to gNfC and two other companies producing complex fertilizers from Naphtha / Fuel Oil / LSHS based Ammonia to compensate the higher cost of production of Nitrogen âNâ. GNFC has requested to the Gol for extension of additional compensation on ANP for three more years. Considering the request, the Gol has initiated a study through the Tariff Commission for determining additional compensation for complex fertilizers produced by using expensive feed stock. GNFC has, from time to time, submitted the data as requested and has been making regular follow up with the Gol. Considering the fact that in similar case, one of the other fertilizer production companies has received the additional compensation for an extended period, the Company is confident that the Gol will consider the Company''s case favorably for allowing the additional compensation for which revenue has been recognized in the books of account in FY 2013-14.

5. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares up to the date of successful commercial operations of BECL.

6. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. NIL (31-3-2015: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

7. As per the provisions of âThe Micro, Small And Medium Enterprises Development Act, 2006â, the principal amount payable to Micro, Small and Medium enterprises is Rs. 646.98 Lacs (31-3-2015: Rs. 814.38 Lacs). The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

8.(a) Under the conversion policy of Government of India, the feed stock of Ammonia Plant was converted from LSHS to Natural Gas. After conversion, energy consumption norms for production of Urea were reduced from 7.989 GCAL/ MT of Urea to 6.965 GCAL/ MT of Urea. The Draft Feasibility Report (DFR) submitted by Project and Development India Limited (PDIL) has calculated the energy norms of 6.301 GCAL/ MT for production of Urea. The actual consumption norms achieved during the actual operations of the plant comes to 6.876 GCAL/ MT of Urea. The Company has made various representations to the Department of Fertilizers (DOF) for revision in norms with the support of PDIL. The matter is under review and consideration by DOF. The Company, based on the above facts, is confident that the energy norms for production of Urea shall be raised by DOF to 6.965 GCAL / MT of Urea. Considering the above facts, revenue has been recognized based on actual norms for production of Urea.

9. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29^th December, 2011 to AS 11 âThe Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS 11, the Company has capitalized exchange difference gain, arising on long-term foreign currency loan and payables, amounting to Rs. 2,639.22 lacs (Previous year: Gain of Rs. 4,204.62 lacs). The Company has also capitalized exchange difference loss, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 2,467.03 lacs (Previous year: Loss of Rs. 3,870.37 lacs).

10. The Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs. 6 crore, was sanctioned by Hon''ble High Court of Gujarat vide its Common Oral Order dated June 15, 2012.

The âAppointed Dateâ of the Scheme is 1st April, 2010.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licenses standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited were submitted to Department of Telecommunications (DOT) on 31st January, 2013 which are still pending for approval before DOT.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licenses from GNFC to ING Satcom Limited.

During the year 2014-15, an Agreement-Cum-Indemnity Bond was executed on 12-04-2014 between the Company and ING Satcom Limited whereby, pending transfer of Licenses, the assets of demerged business (other than Licenses) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licenses by 31-12-2014.

Since disposal of applications for transfer of Licenses in the name of ING

Satcom Limited by the competent authorities as well as settlement of transaction between the Company and ING Satcom Limited are still pending, no accounting treatment is given in the books of account of the Company for the year ended 31.03.2016.

Necessary accounting treatment will be given in the books of account of the Company either on disposal of applications for transfer of Licenses in the name of ING Satcom Limited by the competent authorities or on finalization of settlement of transaction with ING Satcom Limited.

11. The Company, in pursuance of Accounting Standard (AS 28) - âImpairment of Assets'', had assessed impairment loss of Rs. 33,000 lacs in respect of the TDI Dahej plant in the year 2014-15.

The assumptions on which the assessment was made are being monitored on a periodic basis by the management.

12. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

13. Segment Information:

1ased on the guiding principles given in Accounting Standard on âSegment Reporting'' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profiles.

14. The previous year''s figures have been regrouped/ reclassified, wherever necessary, to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.

Mar 31, 2015

1. (Rs. in Lacs)

As at As at 31-03-2015 31-03-2014

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances): 946.39 4,011.88

2. Other Commitments:

(i) The Company is committed to invest a further sum of Rs. 999 lacs (31-03-2014: Rs. 2,320 lacs) in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) as per the terms of the Shareholders'' Agreement. The Company is also committed to grant subordinate debt of Rs. 540 lacs (31-03-2014: Rs. 540 lacs) to BECL in the manner and in the form as may be finalized by the promoters with BECL.

(ii) Export obligation on account of benefit of concessional rate of Custom duty availed under EPCG license scheme on imports of capital goods is Rs. 48,653 lacs (31-03-2014: Rs. 51,069 lacs).

3. Contingent Liabilities not provided for:

(i) Claims against the Company not acknowledged as debts 12,021.23 2,964.63

(ii) Claims in respect of employees'' / contract labour matters Amount not ascertainable

(iii) Income tax assessment orders contested 1,816.37 2,389.17

(iv) Demands in respect of Central Excise Duty, Custom Duty, Service Tax and VAT as estimated by the Company 19,157.13 9,439.04

In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute.

4. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company''s existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

5. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares up to the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

6. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (31-3-2014: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

7. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 814.38 Lacs (31-3-2014: Rs. 726.92 Lacs). The payments to Micro Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

8. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS 11 ''The Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items. In accordance with the above stated amendment to AS 11, the Company has capitalized exchange difference gain, arising on long-term foreign currency loan and payables, amounting to Rs. 4,204.62 lacs (Previous year: Loss of Rs. 4,196.15 lacs). The Company has also capitalized exchange difference loss, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 3,870.37 lacs (Previous year: Gain of Rs. 3,362.44 lacs).

9. The Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs. 6 crore, was sanctioned by Hon''ble High Court of Gujarat vide its Common Oral Order dated June 15, 2012. The "Appointed Date" of the Scheme is 1st April, 2010. Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licences standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited were submitted to Department of Telecommunications (DOT) on 31st January, 2013 which are still pending for approval before DOT.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licences from GNFC to ING Satcom Limited.

During the year, an Agreement-Cum-Indemnity Bond was executed on 12-04- 2014 between the Company and ING Satcom Limited whereby, pending transfer of Licences, the assets of demerged business (other than Licences) have been handed over to ING Satcom Limited subject to certain terms and conditions, inter alia, including the terms of settling the transaction under different eventualities of rejection of transfer applications / non-transfer of Licences by 31-12-2014.

Since disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities as well as settlement of transaction between the Company and ING Satcom Limited are still pending, no accounting treatment is given in the books of account of the Company for the year ended 31.03.2015.

Necessary accounting treatment will be given in the books of account of the Company either on disposal of applications for transfer of Licences in the name of ING Satcom Limited by the competent authorities or on finalization of settlement of transaction with ING Satcom Limited.

10. The Company capitalized its 50,000 MTPA TDI plant at Dahej in March 2014. The TDI plant at Dahej was in-operative for a major part of the year due to the issues of gas emission, subsequent corrective steps and teething problems. As at 31st March, 2015, the Company has in pursuance of Accounting Standard (AS 28) Â ''Impairment of Assets'', assessed impairment of its TDI Dahej plant, having regard to the above-stated delay in starting operations and the related losses. Based on such assessment, the Company has accounted an impairment loss of Rs. 33,000 lacs in respect of the TDI Dahej plant, which has been recognized as an exceptional item in the statement of profit and loss.

The recoverable amount of the relevant assets has been determined on the basis of their value in use.

In estimating the future cash flows, management has based on externally available information, made certain assumptions relating to the future raw material prices, future TDI prices, operating parameters and the assets useful life which management believes reasonably reflects the future expectation of these items. However, if these assumptions change consequent to change in future conditions, there could be further adverse / favourable effect on the recoverable amount of the asset.

The assumption will be monitored on a periodic basis by the management and adjustments will be made if external conditions relating to the assumptions indicate that such adjustments are appropriate.

11. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

12. Segment Information:

Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profiles.

13. The previous year''s figures have been regrouped/ reclassified, wherever necessary, to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.

Mar 31, 2014

1. Other Commitments:

(i) The Company is committed to invest a further sum of Rs. 2,320 lacs (31-03-2013: Rs. 2,975 lacs) in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) as per the terms of the Shareholders'' Agreement. The Company is also committed to grant subordinate debt of Rs. 540 lacs (31-03-2013: Rs. Nil) to BECL in the manner and in the form as may be fi nalized by the promoters with BECL.

(ii) Export obligation on account of benefi t of concessional rate of Custom duty availed under EPCG license scheme on imports of capital goods is Rs. 51,069 lacs (31-03-2013:Rs. 56,055 lacs).

2. Contingent Liabilities not provided for:

(i) Claims against the Company not acknowledged as debts (mainly on account of water charges) 2,964.63 2,804.61

(ii) Claims in respect of employees''/ contract labour matters Amount not ascertainable

(iii) Income tax assessment orders contested 2,389.17 1,605.70

(iv) Demands in respect of Central Excise Duty, Service Tax and VAT as estimated by the Company 9,439.04 8,157.82

In respect of the above, the expected outflow will be determined at the time of fi nal resolution of the dispute.

3. Statement of Profit and Loss includes:

(a) In the item of Sales (which is net of Rebate and Discounts): (i) Subsidy from Government of India under the Retention Price Scheme and Nutrient Based Subsidy (NBS) Scheme 1,59,693.29 1,53,916.05

(ii) Reimbursement of expenses in respect of Imported Fertilizers 0.00 774.77

(b) Payments to Auditors: As auditor (i) Statutory Audit Fees 19.38 16.85

(ii) Tax Audit Fees 3.65 2.86

(iii) Other services for Certifi cation work etc. 10.47 10.29

(iv) Reimbursement of Expenses 2.43 1.48

(v) Income Tax Assessment work &

Retainership 29.00 13.66

(c) Payments to Cost Auditor: (i) Cost Audit Fees 2.81 2.81

(ii) Reimbursement of Expenses 0.27 0.21

(d) Foreign Exchange Rate Differences-Loss/(Gain) 690.96 1,059.57

4. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company''s existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

5. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares upto the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

6. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (31-3-2013: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

7. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 726.92 Lacs (31-3-2013: Rs. 541.27 Lacs) The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables.

This information has been determined to the extent such parties have been identifi ed on the basis of information available with the Company.

8. Related Party Disclosures:

Related party disclosures, as required by AS-18, "Related Party Disclosures", are given below:

(C) Defi ned benefi t plans - As per actuarial valuation on Balance Sheet Date:

The Company has a defi ned benefi t gratuity plan. Every employee who has completed fi ve years or more of service gets a gratuity as per payment of Gratuity Act. The Scheme is funded with Gratuity Trust.

9. Operating Lease:

The Company has given offi ce premises on operating lease. The lease term is for three to four years. There are no restrictions imposed by lease arrangements.

10. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS 11 ''The Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS 11, the Company has capitalized exchange loss, arising on long-term foreign currency loan and payables, amounting to Rs. 4,196.15 lacs (Previous year: Rs. 708.62 lacs) to the cost of Capital Work in Progress (CWIP). The Company has also capitalized exchange gain, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 3,362.44 lacs (Previous year: Rs. 185.72 lacs) to the cost of CWIP.

11. Th e Scheme of Arrangement and Demerger for transfer of V-SAT/ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs.6 crore, was approved by the Board of Directors at its meeting held on July 31, 2010 and further approved by the shareholders, secured creditors and unsecured creditors of the Company at their respective meetings held on 31.8.2011 in pursuance of the directions given by Hon''ble High Court of Gujarat.

The "Appointed Date" of the Scheme is 1st April, 2010.

On approval to the Scheme as aforesaid, a Company Petition was fi led before Hon''ble High Court of Gujarat for its sanction to the said Scheme. Hon''ble High Court of Gujarat sanctioned the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/ Undertaking to ING Satcom Limited, an unlisted Company vide its Common Oral Order dated June 15, 2012. The Company received from the Hon''ble High Court of Gujarat, the certifi ed copy of drawn up Order sanctioning the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/

Undertaking to ING Satcom Limited, an unlisted Company. The Company physically fi led the Order(s) with the Registrar of Companies, Gujarat on 16th August, 2012.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licenses standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited have been submitted to Department of Telecommunications (DOT) on 31st January, 2013.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective on 16.8.2012, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licence of V-SAT from GNFC to ING Satcom Limited. Hence, no accounting treatment in respect of Demerger Scheme is given in the books of account of the Company for the year ended 31.03.2014.

Necessary accounting treatment will be given in the books of account of the Company on transfer of Licenses in the name of ING Satcom Ltd. by the competent authorities, which is in progress.

12. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confi rmations are received, reconciled and settled.

13. Segment Information:

Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17) as notifi ed by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profi -les.

Mar 31, 2013

1. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company''s existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

2. The Company has entered into a Shareholders'' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares upto the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company''s investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

3. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (31-3-2012: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

4. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 541.27 Lacs (31-3-2012: Rs. 863.74 Lacs) The payments to Micro Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

5. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS-11 ''The Effects of Changes in Foreign Exchange Rates'', to allow companies deferral/ capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS-11, the Company has capitalized exchange loss, arising on long-term foreign currency loan and payables, amounting to Rs. 708.62 lacs

(Previous year: Rs. 737.14 lacs) to the cost of Capital Work in Progress (CWIP). The Company has also capitalized exchange gain, arising on long-term foreign forward contract, undertaken to fully hedge the foreign currency loan, amounting to Rs. 185.72 lacs (Previous year: Rs. 172.01 lacs) to the cost of CWIP.

6. Share Application Money of Rs. 125.00 lacs (31-03-2012: Rs. Nil) represents amount paid to Bhavnagar Energy Co. Ltd. towards equity, pending allotment.

7. The Scheme of Arrangement and Demerger for transfer of V-SAT/ ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against cash consideration of Rs.6 crore, was approved by the Board of Directors at its meeting held on July 31, 2010 and further approved by the shareholders, secured creditors and unsecured creditors of the Company at their respective meetings held on 31.8.2011 in pursuance of the directions given by Hon''ble High Court of Gujarat.

The "Appointed Date" of the Scheme is 1st April, 2010.

On approval to the Scheme as aforesaid, a Company Petition was filed before Hon''ble High Court of Gujarat for its sanction to the said Scheme. Hon''ble High Court of Gujarat sanctioned the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/ Undertaking to ING Satcom Limited, an unlisted Company vide its Common Oral Order dated June 15, 2012. The Company received from the Hon''ble High Court of Gujarat, the certified copy of drawn up Order sanctioning the Scheme of Arrangement and Demerger of V-SAT and ISP Gateway Business Division/ Undertaking to ING Satcom Limited, an unlisted Company. The Company physically filed the Order(s) with the Registrar of Companies, Gujarat on 16th August, 2012.

Subsequent to the Order passed by the Hon''ble High Court of Gujarat, sanctioning the Scheme of Demerger, two separate applications for transfer of V-SAT and ISP Gateway Licenses standing in the name of the Company to the name of Transferee Company viz. ING Satcom Limited have been submitted to Department of Telecommunications (DOT) on 31st January, 2013.

As per the legal opinion obtained from Legal Consultant, though the Scheme has been sanctioned by the Hon''ble High Court of Gujarat and has become effective on 16.8.2012, the Scheme is subject to and conditional upon the approval of the Government Authorities for transfer of Licence of V-SAT from GNFC to ING Satcom Limited. Hence, no accounting treatment in respect of Demerger Scheme is given in the books of account of the Company for the year ended 31.03.2013.

Necessary accounting treatment will be given in the books of account of the Company on transfer of Licenses in the name of ING Satcom Ltd. by the competent authorities, which is in progress.

8. Confirmations of certain parties and banks for amounts due to them / amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

9. Segment Information:

Based on the guiding principles given in Accounting Standard on ''Segment Reporting'' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company''s primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division''s activities) which have got their own respective risk and return profiles.

10. The previous year''s figures have been regrouped / reclassified, wherever necessary, to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.

Mar 31, 2012

A. Security details:

(i) Rupee term loans from banks are secured by way of first mortgage on all immovable properties, both present and future for which charge is created / to be created and are further secured by way of hypothecation created / to be created on all non-current assets and second charge by way of hypothecation created / to be created on all current assets including stocks and book debts.

(ii) Foreign currency term loan from bank is secured by way of first mortgage on all immovable properties, both present and future for which charge is to be created and is further secured by way of hypothecation to be created on all movable fixed assets.

(iii) The above charges are ranking pari-passu among the lenders.

b. Repayment details:

(i) Rupee term loans from banks of Rs. 57,400 lacs carries interest @ 11.50% p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 30.09.2012 and ending on 30.06.2017.

(ii) Rupee term loans from banks of Rs. 9,300 lacs carries interest @ 11.00%~11.25% p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 31.12.2013 and ending on 30.09.2021.

(iii) Foreign currency term loan from bank carries interest @ 6 month Euribor plus 1.98% payable on half yearly basis. The loan is repayable in half yearly installments starting from 01.10.2014 and ending on 01.04.2020.

(iv) Unsecured rupee term loan from bank is against assignment of security held by the Company towards outstanding of House Building Advance given to its employees and carries interest @ 11.70 % p.a. (floating) payable on monthly basis. The loan is repayable in quarterly installments starting from 31.12.2009 and ending on 30.9.2014.

(v) Unsecured rupee term loan from other of Rs. 55,000 lacs carries interest @ 9.25 % p.a. (floating) payable on quarterly basis. The loan is repayable in quarterly installments starting from 24.2.2012 and ending on 24.11.2012.

(vi) Unsecured rupee term loan from other of Rs. 10,000 lacs carries interest @ 9.25% p.a. (floating) payable on quarterly basis. The loan is repayable in quarterly installments starting from 31.12.2013 and ending on 30.09.2015.

1. Contingent Liabilities not provided for:

(i) Claims against the Company not acknowledged as debts (mainly on account of water charges) 3,227.59 2,369.66

(ii) Claims in respect of employees'/ contract labour matters Amount not ascertainable

(iii) Income tax assessment orders contested 3,609.28 2,149.67

(iv) Demands in respect of Central Excise Duty, Service Tax and VAT in fertilizers and chemical divisions' activities and the same as estimated by the Company 3,027.62 1,724.21

2. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company's existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

3. The Company has entered into a Shareholders' Agreement for its investments in the equity share capital of Bhavnagar Energy Co. Ltd. (BECL) and Bharuch Dahej Railway Co. Ltd. (BDRCL). The agreement with regard to the equity investment in BECL, inter alia, includes terms whereby the Company's investment in the equity share capital of BECL is subject to restrictions as regards transfer of shares upto the date of successful commercial operations of BECL. Similarly, the agreement with regard to the equity investment in BDRCL, inter alia, includes terms whereby the Company's investment in the equity share capital of BDRCL is subject to lock in period restrictions. As per the said terms, the Company cannot transfer any part of the equity shares acquired pursuant to the agreement for a period of four years from the date of commercial operations of BDRCL.

4. Long-Term Loans and Advances include interest bearing unsecured loan of Rs. 160.00 lacs (31-3-2011: Rs. 160.00 lacs) to Gujarat Chemical Port Terminal Company Ltd.

5. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 863.74 lacs (Previous year Rs. 1,311.27 lacs). The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit / date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Trade Payables. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. a. Finance Lease:

The Company had given CNG Buses to Gujarat State Road Transport Corporation (GSRTC) on finance lease for the period of three years which has been completed in the Financial Year 2010-11. As per the terms of Memorandum of Understanding (MoU), after the completion of total lease payments, the leased assets will be on the name of and under the ownership of GSRTC by paying Residual Value upto 1% of the total cost of the leased assets by GSRTC to the Company.

Necessary adjustment will be made in the Books of Accounts on completion of necessary formalities and receipt of the Residual Value of the leased assets from GSRTC by the Company.

b. Operating Lease:

The Company has given office premises on operating lease. The lease term is for three to four years. There are no restrictions imposed by lease arrangements.

7. Capitalization of exchange differences:

The Ministry of Corporate Affairs (MCA) has issued an amendment dated 29th December, 2011 to AS-11 'The Effects of Changes in Foreign Exchange Rates', to allow companies deferral / capitalization of exchange differences arising on long-term foreign currency monetary items.

In accordance with the above stated amendment to AS-11, the Company has capitalized exchange loss, arising on long-term foreign currency loan, amounting to Rs. 737.14 lacs (Previous year: Rs. Nil lacs) to the cost of Capital Work in Progress (CWIP). The Company has also capitalized exchange gain, arising on long- term foreign forward contract, undertaken to partially hedge the foreign currency loan, amounting to Rs. 172.01 lacs (previous year: Rs. Nil lacs) to the cost of CWIP.

8. In view of confirmation of long term availability of LSHS, it was decided to initiate closure of the Wet gas Sulphuric Acid Project which was under implementation and a provision of Rs. 3,000.00 lacs had been made in the Statement of Profit and Loss for the year 2009-10 towards the impact of the closure. Now upon finalization of the impact of the project closure at Rs. 2,773.35 lacs, the same has been adjusted against the provision of Rs. 3,000.00 lacs made in 2009-10 and excess provision of Rs. 226.65 lacs has been written back in the current year 2011-12 as 'Other Income'.

9. Board of Directors at its meeting held on July 31, 2010 had, inter alia, approved-

(a) The Transfer of V-SAT / ISP Gateway Business of GNFC to ING Satcom Ltd., an unlisted Company, through Scheme of Arrangement and De-merger against cash consideration of Rs. 6 crores.

(b) Draft Scheme of Arrangement and De-merger in respect of proposed Transfer of V-SAT / ISP Gateway Business of GNFC to ING Satcom Ltd., an unlisted Company.

The "Appointed Date" of the Scheme is 1st April, 2010.

The draft Scheme of Arrangement and Demerger for transfer of V-SAT / ISP Gateway Business of the Company to ING Satcom Ltd., an unlisted Company, against cash consideration of Rs. 6 crores, has been approved by the shareholders, secured creditors and unsecured creditors of the Company at their respective meetings held on 31.8.2011 in pursuance of the directions given by Hon'ble High Court of Gujarat.

On approval to the Scheme as aforesaid, a Company Petition has been filed before Hon'ble High Court of Gujarat for its sanction to the said Scheme which is now posted for final hearing.

Necessary adjustments will be made in the Books of Accounts on completion of all formalities in this regard and on obtaining & filing with the concerned Registrar of Companies the Order of Hon'ble High Court of Gujarat sanctioning the scheme of Arrangement and Demerger.

10. Confirmations of certain parties and banks for amounts due to them / amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

11. Segment Information:

Based on the guiding principles given in Accounting Standard on 'Segment Reporting' (AS-17) as notified by Companies (Accounting Standards) Rules, 2006, the Company's primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Division's activities) which have got their own respective risk and return profiles.

12. The Company prepares and presents its financial statements as per Schedule VI to the Companies Act, 1956, as applicable to it from time to time. In view of revision to the Schedule VI as per the notifications issued by the Ministry of Corporate Affairs (MCA), Government of India, the financial statements of the Company for the financial year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year's figures have been accordingly regrouped / reclassified wherever necessary to conform to the figures of the current year presentation. Figures are rounded off to the nearest lacs.

Mar 31, 2011

(Rs. in Lacs)

2010-11 2009-10

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 1,08,254.57 1,03,736.61

2. Contingent Liabilities not provided for: (i) Claims against the Company not acknowledged as debts (mainly on account of water charges) 2,369.66 1,803.60

(ii) Guarantees / Letters of Credit given by Banks on behalf of the Company 24,494.90 29,665.92

(iii) Claims in respect of employees'/ contract labour matters Amount not ascertainable

(iv) Income tax assessment orders contested 2,149.67 3,234.24

3. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Company's existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

4. Loans and Advances include interest bearing unsecured loan of Rs. 160.00 Lacs (Previous year Rs. 160.00 Lacs) to Gujarat Chemical Port Terminal Company Ltd.

5. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 1,311.27 Lacs (Previous year Rs. 800.78 Lacs). The payments to Micro, Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Sundry Creditors.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

6 a) Finance Lease:

The Company has given CNG Bu es to G jarat St te Road Transport Corporation (GS TC) on fi ance lea e for the period of three years which has been completed in the cu rent Fina cial Year 2010-11. As per the terms o Memoran um of U derstand g (MoU), after the completion of total ease payments, th leased ssets will be on the name of and under the ownership o GSRTC y paying Residual Value upto 1% of the total ost of th leased ssets by GSRTC to the Company.

Necessary adjustment will be made in the Books of Accounts on completion of necessary formalities and receipt of the Residual Value of the leased assets from GSRTC by the Company.

7. In view of confirmation of long term availability of LSHS now, it has been decided to initiate closure of the Wet gas Sulphuric Acid Project which was under implementation. Provision of Rs. 30 crore has been made in the Profit & Loss Account for the year 2009-10 towards the impact of the closure. Further necessary adjustments will be made in the Books of Accounts on finalization of the impact of the project closure.

8. As per the Accounting Policy adopted, the Company had so far been accounting insurance claims on accrual basis. However, this accounting policy is reviewed and revised to cash basis from the current Financial Year 2010-11. Had there been no change in Accounting Policy, the Profit after Tax (PAT) for the current year and Reserves and Surplus as well as Loans and Advances as on 31-03-2011 would have been higher by Rs. 347.27 lacs.

9. Board of Directors at its meeting held on July 31, 2010 had, inter alia, approved- (a) The Transfer of V-SAT / ISP Gateway Business of GNFC to ING

Satcom Ltd., an unlisted company through Scheme of Arrangement

and De-merger against cash consideration of Rs. 6 crore. (b) Draft Scheme of Arrangement and De-merger in respect of proposed Transfer of V-SAT / ISP Gateway Business of GNFC to ING Satcom Ltd., an unlisted company. Subsequent to approval to the Scheme of Arrangement and De- merger by the Board of Directors, an application to the Bombay Stock Exchange Ltd. and the National Stock Exchange of India Ltd. for their approval as required under the Listing Agreement was made and such approval from both the Stock Exchanges have been received. The Company is now in the process of filing an application before Hon'ble High Court of Gujarat for obtaining its directions for holding of meetings of its shareholders and creditors for their approval to the Scheme.

Necessary adjustments will be made in the Books of Accounts on completion of all formalities in this regard and on obtaining & filing with the concerned Registrar of Companies the Order of Hon'ble High Court of Gujarat sanctioning the scheme of Arrangement and De-merger.

10. Confirmations of certain parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

11. Previous year's figures have been regrouped wherever necessary to conform to the figures of the current year.

12. Segment Information:

Based on the guiding principles given in Accounting Standard on 'Segment Reporting' (AS-17) as notified by Companies Accounting Standards Rules, 2008, the Company's primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Divisions' activities) which have got their own respective risk and return profiles.

Mar 31, 2010

(Rs. in Lacs)

2009-10 2008-09

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 1,03,736.61 41,999.48

2. Contingent Liabilities not provided for: (i) Claims against the Company not acknowledged as debts (mainly on account of water charges and compensation for land acquisition) 1,803.60 1,146.02

(ii) Guarantees / Letters of Credit given by Banks on behalf of the Company 29,665.92 38,443.42

(iii) Claims in respect of employees/ contract labour matters Amount not ascertainable

(iv) Income tax assessment orders contested 3,234.24 2,808.87

3. The Company has strategic investment in the equity capital of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL) in capacity of promoters, aggregating to Rs. 4,941.00 lacs as on 31st March, 2010.

As per the Corporate Debt Restructuring (CDR) programme undertaken, GCPTCL has reduced the face value of its equity share from Rs.10/- each to Re.1/- each. In view of the above, the Company has made provision of Rs. 3,101.40 lacs in the current year towards diminution in value of investment in the equity of GCPTCL.

4. As one of the promoters of Gujarat Chemical Port Terminal Company Ltd. (GCPTCL), the Company has given undertaking to ICICI Bank for not to transfer, assign, dispose off, pledge, charge, or create any lien or in any way encumber Companys existing or future shareholding in the GCPTCL in favour of any person so long as money remains due by GCPTCL to ICICI Bank or till the project is duly completed, whichever is later.

5. Loans and Advances include interest bearing unsecured loan of Rs. 160.00 lacs to Gujarat Chemical Port Terminal Company Ltd.

6. As per the provisions of "The Micro, Small And Medium Enterprises Development Act, 2006", the principal amount payable to Micro, Small and Medium enterprises is Rs. 800.78 lacs (Previous year Rs. 434.28 lacs) The payments to Micro Small and Medium undertakings have been made within the prescribed time limit/ date agreed upon with supplier and hence no interest is payable for delayed payments. These amounts have been included in Sundry Creditors.

This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

* For part of the current year/ previous year

7. In view of confirmation of long term availability of LSHS now, it has been decided to initiate closure of the Wet gas Sulphuric Acid Project which was under implementation. Provision of Rs. 30 crores has been made in the Profit & Loss Account towards the impact of the closure. Further necessary adjustments will be made in the Books of Accounts on finalization of the impact of the project closure.

8. The Company has accounted income of Rs. 34 crores in current financial year towards estimated insurance claim of Business Interruption for the period upto 31-03-2010 following accident in Section 700 of Ammonia Plant of the Company on 09-02-2010 (3rd shift).

9. Confirmations of some parties and banks for amounts due to them/ amounts due from them as per accounts of the Company are not received. Necessary adjustments, if any, will be made when the confirmations are received, reconciled and settled.

10. Previous years figures have been regrouped wherever necessary to conform to the figures of the current year.

11. Segment Information:

Based on the guiding principles given in Accounting Standard on Segment Reporting (AS-17) as notified by Companies Accounting Standards Rules, 2008, the Companys primary business segments are Fertilizers, Chemicals and Others (which includes mainly IT Divisions activities) which have got their own respective risk and return profiles.

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