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Notes to Accounts of JBF Industries Ltd.

Mar 31, 2018

Note 1 - CORPORATE INFORMATION:

JBF Industries Limited ("the Company") is a limited Company domiciled and incorporated in India and its shares are publicly traded on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), in India. The registered office of the Company is situated at Survey No. 273, Village Athola, Dadra & Nagar Haveli, Silvassa - 396230, India. Company is engaged in the manufacturing business of Polyester Chips, Polyester Yarn and Processed Yarn.

The financial statements for the year ended 31st March, 2018 were approved and adopted by board of directors in their meeting held on 20th June, 2018

Note 2 - BASIS OF PREPARATION:

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

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, which are measured at fair value/ amortised cost.

The financial statements are presented in Indian Rupees (Rs.), which is the Company''s functional and presentation currency and all values are rounded to the nearest crore with two decimal, except when otherwise indicated.

5.1 Buildings include cost of shares in Co-operative Societies Rs. 8,000/- (as at 31st March 2017 Rs. 8,000/-).

5.2 Property, Plant and Equipment are pledged as collateral against borrowings, the details related to which have been described in Note 21 and 25.

5.3 In accordance with the Indian Accounting Standard (Ind AS -36) on "Impairment of Assets", the management during the year carried out an exercise of identifying the assets that may have been impaired in accordance with the said Ind AS. On the basis of review carried out by the management, there was no impairment loss on property, plant and equipment during the year ended 31st March, 2018.

5.4 In accordance with the exemption given under Ind AS 101, which has been exercised by the Company, a first time adopter can continue its previous GAAP policy for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the previous GAAP financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period i.e. April 01, 2016. Accordingly, foreign currency exchange differences arising on translation/settlement of long-term foreign currency monetary items acquired before 01st April, 2016 pertaining to the acquisition of a depreciable asset amounting to Rs. 0.25 Crore gain (31st March, 2017 Rs. 0.06 Crore gain) are adjusted to the cost of respective item of property, plant and equipment which is included in foriegn exchange difference above.

5.5 Other intangible assets represents Computer software other than self generated.

6.1 The Company''s investment properties as at 31st March, 2018 consists of land held for undetermined future use.

6.2 As at 31st March, 2018 and 31st March, 2017, the fair values of the properties are Rs. 3.18 Crore and Rs. 2.99 Crore respectively. These valuations are based on valuations performed by an independent valuer, who is a specialist in valuing these types of investment properties. The fair value of the assets is determined using residual technique of valuation. The fair value measurement is categorised in Level 3 fair value hierarchy. The above method consists of estimating and assessing the prevailing market value of a Residential unit after adjusting various factors.

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

9.1 During the previous years the company was liable to pay MAT under section 115JB of the Income Tax Act, 1961 (The Act) and the amount paid as MAT was allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next Ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB, of the Act. Accordingly as advised in Guidance note on " Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961" issued by the Institute of Chartered Accountants of India, Rs.Nil (for the year ended 31st March 2017 Rs.0.63 Crore) being the excess of tax payable u/s 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act had been considered as MAT credit entitlement and credited to statement of profit and loss during the previous year.

12.1 (i) Trade receivables as at 31st March, 2018 includes amounts due from certain parties aggregating to Rs.62.00 Crore are overdue and considered doubtful, however Management is of the view that these amounts will be recovered in due course and no provisions have been considered necessary at this stage.

(ii) Trade receivables as at 31st March, 2018 includes Rs. 226.83 Crore (excluding amounts as referred in Note 12.1 (i) due from certain parties, which are outstanding for the extended period of time and/or in respect of which the parties did not honour the bills. Efforts are being made to recover the above receivables, and management believes that these are good for recovery and no provision is required.

12.2 Debts includes due from related party Rs.98.06 Crore (as at 31st March, 2017 Rs.20.08 Crore) (refer Note 41)

15.1 Unsecured inter-corporate Deposits includes Rs.5.00 Crore (As at 31st March, 2017 Rs.5.00 Crore) backed by personal guarantee of a promoter of a borrower.

15.2 Secured Inter Corporate Deposits (ICD) Includes:-

(i) Loan of Rs.9.00 Crore given in earlier years to TVC Sky Shop Limited (TVC) against the pledge of 25,00,000 equity shares of Rs. 10/- each representing 25.73% of the paid up equity share capital of TVC.

(ii) Loan of Rs.11.00 Crore given in earlier years to Suryachakra Power Corporation Limited (SPCL) against the pledge of 24,31,434 equity shares of Rs.10/- each representing 1.62% of the paid up equity share capital of SPCL.

As TVC and SPCL failed to meet its commitments for repayment, the Company invoked the pledge and got transferred above mentioned equity shares in its own Demat account. As the Company does not intends to hold these shares as investment to acquire control of TVC and SPCL but as a security till the above loans are repaid, it continue to disclose the above loans as ICD as against the investment. Further TVC has not been considered as an associate within the meaning of Indian Accounting Standards 28 "Accounting for investment in associates & Joint Venture in Consolidated Financial Statements" notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS).

15.3 Inter corporate deposit (ICD) of Rs.55.00 Crore and interest accrued and due thereon of Rs. 34.75 Crore (as included in the note 16) aggregating to Rs.89.75 Crore, given to various parties in earlier years, are overdue for substantial period of time and in respect of which the Company has initiated legal proceedings (including winding up petitions against a few of them). In view of the pending litigations and based on principle of prudence, Company has discontinued recognition of interest income on the same w. e. f. 1st January 2015. Management of the Company is of the view that the above receivables are good for recovery in view of available securities, personal guarantee of promoters of borrower companies etc and hence no provision for doubtful is required against the above receivables. The Company continues its efforts to recover theses receivables.

15.4 In accordance with the regulation 34 (3)of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

15.5 The Company has granted Inter Corporate Deposits to related parties for setting up project and for its business pupose.

15.6 The Company has granted Inter Corporate Deposits to others for the purpose of utilising this amount in their business.

15.7 Refer Note 46 for Impairment of Subsidiaries Exposures.

16.1 Interest Receivable includes Rs.111.93 Crore (as at 31st March, 2017 Rs.47.64 Crore) due from related parties. (refer Note 41)

16.2 Others Includes mainly derivative receivable and advance against salary.

16.3 Refer Note 15.3 in respect of Interest Receivable on Inter Corporate Deposits.

16.4 Refer Note 46 for Impairment of Subsidiaries Exposures.

16.5 Claims & discounts receivables of Rs.178.75 crore from suppliers, are overdue for the extended period of time. Efforts are being made to recover the above receivables. Management is of the view that the same have been accounted based on the management''s best estimate and are good for recovery.

18.1 Others Includes prepaid expenses and excise deposit.

18.2 Assets held for sale represents plant and machineries discarded in earlier years and not in use and are carried at estimated net realisable value as determined by the management.

19.2 Terms / Rights Attached to Equity Shares :

The holder of equity shares of Rs. 10/- each is entitled to one vote per share. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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 share holders.

20.1 Nature and Purpose of Reserve

1. Capital Redemption Reserve:

Capital redemption reserve was created against buy back of shares. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

2. capital Reserve

Capital reserve was created upon on forfeiture of share warrants. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

3. Securities Premium Account:

Securities premium was created when share are issued at premium. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

4. Foreign Currency Monetary Items Translation Difference Account :

The reserve pertains to exchange difference relating to long term monetary items in so far as they do not relate to acquisition of depreciable capital assets which are accumulated in "Foreign Currency Monetary Item Translation Difference Account" and amortised in the Statement of Profit and Loss over the balance period of such long term monetary items.

5. Remeasurements of Defined Benefit Plans:

Other comprehensive income comprises of re-measurements of defined benefit obligations.

21.1 Term loans referred to in (a) above and current maturities of long term borrowings referred in Note 27:-

i) Rs.164.48 Crore (as at 31st March, 2017 Rs. 178.97 Crore) carrying interest at the rate of 10.50% to 13.50 % are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat. Rs.119.86 Crore (as at 31st March, 2017 Rs.122.21 Crore) carrying interest at the rate of 12.45% to 13.60 % are to be secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further to be secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

ii) Rs.6.86 Crore (as at 31st March, 2017 Rs.18.75 Crore) carrying interest at the rate of 11.80 % is secured by way of second pari passu charge on the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and the movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat . Rs. 27.50 Crore (as at 31st March, 2017 Rs. 30.00 crore) carrying interest at the rate of 12.30% is secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

iii) Rs.24.95 Crore (as at 31st March, 2017 X 50.00 Crore) carrying interest at the rate of 12.60 % are secured by way of First pari passu charge on all the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujrat.

iv) Rs.50.00 Crore (as at 31st March, 2017 Rs. 50.00 Crore) is secured by way of pledged of Equity Shares of the Company by the promoter.

21.2 External Commercial Borrowings referred to in (b) above and current maturities of long term borrowings referred in Note 27:-

Rs.208.44 Crore (as at 31st March, 2017 Rs.231.87 Crore) carrying interest at the rate of LIBOR plus 2.5 percentage to 5 percentage are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

21.3 Vehicle loans referred to in (c) above and current maturities of long term borrowings referred in Note 27:-

Rs.0.05 Crore (2017: Rs.0.08 Crore) carrying interest at the rate of 8.18-8.88 % are secured by specific charge on the vehicles covered under the said loans.

21.4 Unsecured Term loans referred to in (d) above and current maturities of long term borrowings referred in Note 27:-

i) Rs.33.04 Crore (as at 31st March, 2017 Rs.44.11 Crore) carrying interest at the rate of 3.50% was secured by pledge of fixed deposits with banks of Rs. Nil (as at 31st March, 2017 Rs.8.36 Crore)

ii) Rs.143.08 Crore (as at 31st March, 2017 Rs.149.73 Crore) carrying interest at the rate of 14.00 % is secured by way of pledged of Equity Shares of the Company by the promoters.

iii) Rs.NIL (as at 31st March, 2017 Rs.20.00 Crore) carrying interest at the rate of 14.00 % is secured by way of pledged of Equity Shares of the Company by the promoter.

21.5 Terms of Repayment

i) Secured Term Loans from Banks

Loan of Rs.10.00 Crore is repayable in 4 equal quarterly installments of RS. 2.50 Crore starting from June 2019 and ending on March 2020. Loan of RS. 7.50 Crore is repayable in 4 equal quarterly installments of RS. 1.87 Crore starting on May 2019 and ending on February 2020.Loan of Rs. 11.08 Crore is repayable in 4 equal quarterly installments of RS. 2.78 Crore starting on April 2019 and ending on January 2020. Loan of RS. 55.31 Crore is repyable in 13 quarterly installments starting from May 2019 and ending on May 2022 of which first installment is of RS. 2.81 Crore, Next 4 installments are of RS. 3.75 Crore each, remaining 8 installments are of RS. 4.68 Crore each.Loan of RS. 21.88 Crore is repayable in 5 equal quarterly installments of Rs. 4.37 Crore starting on May 2019 and ending on May 2020. Loan of RS. 21.38 Crore is repayable in 9 equal quarterly installments of RS. 2.38 Crore starting on April 2019 and ending on April 2021.

ii) Secured Term Loans from Financial Institutions

Loan of RS. 37.50 Crore is repaybale in 15 equal quarterly installments of RS. 2.50 Crore starting from May 2019 and ending on November 2022.

iii) Secured External Commercial Borrowings

Loan of Rs. 143.30 Crore is repayable in 6 six monthly - first 2 installment of Rs. 19.54 Crore (USD 3000000 each) starting from September 2019 and ending March 2020, and next 4 installment of Rs. 26.05 Crore (USD 4000000 each) starting from September 2020 and ending March 2022.

iv) Secured Vehicle Loan

Loan Rs. 0.01 Crore in financial year 2019-20.

v) Unsecured Term Loans from Body Corporate

Loan of Rs. 100 Crore is repayable in 1 installment of Rs. 100 Crore in December 2019.

21.6 Term loans from banks ( including current maturities of long term borrowings of Rs. 97.53 Crore) aggregating to Rs. 252.84 Crore (as at 31st March 2017 Rs. 284.80 Crore) is guaranteed by one of the Directors of the company in his personal capacity.

21.7 As on 31st March, 2018, the Company has overdue of principal of Rs. 127.00 Crore (Previous Year : Rs. Nil) and Interest of Rs. 26.46 Crore (Previous Year : Rs. Nil) included in Current Maturities of Long term debt and Interest Accrued and Due respectively in Note 27 for a period of less than 1 year. Further, due to default in servicing of its dues by the Company, the Banks have classified all the credit facilities including current borrowings as referred in Note 25 given to the Company aggregating to Rs. 1954.05 Crore (Previous Year : Rs. Nil) as at 31st March, 2018 as Non Performing Asset (NPA) in their books of account.

21.8 The agreements in respect of non-current borrowings as at 31st March 2018 of Rs. 407.95 Crore contain certain restrictive covenants including non-adherence of initial Term Loan repayment schedule and non-payment of interest thereon as stipulated. In the current year, the Company has not complied with the terms of these covenants. The Company continued to classify these borrowings as non-current liabilities as against current liabilities which is not in line with the compliance of IND AS 1 "Presentation of Financial Statements". The Company has submitted a resolution plan to its lenders which is under negotiation.

22.1 Terms/rights attached to Cumulative Redeemable Preference Shares (CRPS)

The holder of Preference Share of the Company have a right to vote at a General Meeting of the Company only in accordance with limitations and provisions laid down in Section 47 (2) of the Companies Act, 2013. The preference share holders will be entitled to receive out of the remaining assets of the company after distribution to lenders. 75,709 2.5% CRPS are redeemable at par as : 36,509 shares on 30.09.2020, 17,837 shares on 30.09.2019 and 21,363 shares on 30.09.2018. 14,15,000 20% CRPS are redeemable at a premium of RS. 700 per share as : 3,15,000 shares on 30.09.2020, 7,70,000 shares on 30.09.2019 and 3,30,000 shares on 30.09.2018.The Preference Shares shall carry dividend at the rate of 2.5 % and 20.00% per annum payable annually.

25.1 Working Capital Loans as referred to in (a) above of RS. 1,505.86 Crore (as at 31st March, 2017 RS. 618.02 Crore) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

25.2 Buyers Credit referred to in (b) above of RS.42.29 Crore, (as at 31st March, 2017 RS. 165.48 Crore) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

25.3 As on 31st March, 2018, the Company has overdue of Working Capital loan of RS. 1,139.55 Crore (Previous Year : RS. 19.84 Crore) and Interest of RS. 60.04 Crore (Previous Year: RS. Nil) included in Interest Accrued and Due in Note 27 for a period of less than 1 year.

25.4 The Company has borrowed RS. 50.00 Crore from a financial institution ("lender") against the pledge of 55,27,711 equity shares of the Company held by the promoters of the Company. In view of the default in repayment of principle and interest thereon, the lender invoked the pledge and disposed the equity shares for RS. 1.68 Crore. The realisation value has been adjusted against the outstanding borrowing and equivalent amount has been considered as unsecured borrowing from the promoter director and in the absence of any terms for interest, no interest has been charged on the same.

33.1 During the year Company paid an amount of Rs. 5.88 Crore to the executive chairman which was in excess of remuneration as prescribed under section 197 of the Companies Act, 2013 by Rs. 4.06 Crore. The same is subject to requisite approvals from the Central Government. Further Central Government approval in respect of excess remuneration paid in the financial year 2016-17 yet to be received.

During the year Company has paid an amount of Rs. 1.35 Crore to one of the whole time directors, which is subject to shareholders'' approval.

36.2 Notes Related to Corporate Social Responsibility Expenditure:

(a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the company during the year is Rs. 2.51 Crore (Previous Year Rs. 2.34 Crore)

(b) Expenditure related to Corporate Social Responsibility is Rs. 0.78 Crore (for the year ended 31st March, 2017 Rs. 0.94 Crore) and Rs.1.73 Crore (for the year ended 31st March, 2017 Rs. 1.40 Crore) remained unspend.

38.2 The Company had issued a corporate guarantee of USD 463.96 Million (equivalent of Rs. 3,022.08 Crore) to the lenders of JBF Petrochemicals limited ("JPL"), a step down Subsidiary. Subsequent to the year end, one of the lenders of JPL vide its letter dated 24th April, 2018 invoked corporate guarantee to the extent of USD 252.00 Million (equivalent of Rs. 1,641.44 Crore) as JPL has defaulted in servicing its borrowings towards principal and interest thereon. The Company carried out fair valuation of this corporate guarantee through an independent Chartered Accountant firm and as per their report the value of securities created in favor of lenders is higher than the total liability towards them. Accordingly, no provision is required towards the guarantee so invoked.

The contribution to provident fund is made to Employees'' Provident Fund managed by Provident Fund Commissioner. The contribution towards ESIC made to Employees'' State Insurance Corporation. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

(b) Defined Benefit Plan:

The present value of Employees'' Gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognised in the balance sheet.

39.3 Risk Exposures Actuarial Risk

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

interest Risk

The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

Longevity Risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary Risk

The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

Variability in Withdrawal Rates:

If actual withdrawal rates are higher than assumed withdrawal rate than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

39.5 The average duration of the defined benefit plan obligation at the end of the reporting period is 19.04 years (as at 31st March, 2017: 18.71 years).

41.4 The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at year-end are unsecured, unless specified and settlement occurs in cash. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

41.5 IDBI Trusteeship Services Limited, the Security Trustee to, the lenders of JBF Petrochemicals Ltd. ("JPL"), a step down subsidiary, has exercised the rights of a ''Pledge'' and invoked the pledge over the pledged 51% equity shares of JPL held by JBF Global Pte. Ltd., a Subsidiary Company and transferred the same to IDBI Trusteeship Services Ltd. However lenders have not adjusted any amount against the JPL''s borrowings so far.

Note 3 - Fair Values

42.1 Financial instruments by Category:

Set out below is a comparison by class of the carrying amounts and fair value of the Company''s financial assets and liabilities that are recognised in the financial statements.

42.2 Fair Valuation Techniques Used to Determine Fair Value

The Company maintains procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

i) Fair value of trade receivable, cash and cash equivalents, other bank balances, current borrowings, trade payables, other current financial assets and other current financial liabilities are approximate at their carrying amounts largely due to the short-term maturities of these instruments.

ii) The fair values of non-current borrowings and security deposits are calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including credit risk. The fair values of non-current borrowings are approximate at their carrying amount due to interest bearing features of these instruments.

iii) The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

iv) Fair values of quoted financial instruments are derived from quoted market prices in active markets.

v) Equity Investments in subsidiaries are stated at cost.

vi) Fair value of forward contract, options and currency & interest rate swap are derived on the basis of mark-to-market as provided by the respective bank.

42.3 Fair Value Hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:-

i) Level 1 :- Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date and financial instruments like mutual funds for which net assets value (NAV) is published by mutual fund operators at the balance sheet date.

ii) Level 2 :- Inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2.

iii) Level 3 :- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

42.6 Description of the Valuation Processes used by the Company for Fair Value Measurement Categorised within Level 3 :-

At each reporting date, the Company analyses the movements in the values of financial assets and liabilities which are required to be remeasured or re-assessed as per the accounting policies.

The Company also compares the change in the fair value of each financial asset and liability with relevant external sources to determine whether the change is reasonable. The Company also discusses of the major assumptions used in the valuations.

For the purpose of fair value disclosures, the Company has determined classes of financial assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Note 4 - Financial Risk Management Objective and Policies

The Company is exposed to market risk, credit risk and liquidity risk. Risk management is carried out by the company under policies approved by the board of directors. The Company''s documented risk management policies are effective tool in mitigating the various financial risk to which the business is exposed to in the course of daily operations This Risk management plan defines how risks associated with the Company will be identified, analysed, and managed. It outlines how risk management activities will be performed, recorded, and monitored by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure all significant areas of risks are identified, understood and effectively managed, to promote a shared vision of risk management and encourage discussion on risks at all levels of the organisation to provide a clear understanding of risk/benefit trade-offs, to deploy appropriate risk management methodologies and tools for use in identifying, assessing, managing and reporting on risks, and to determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage/optimize key risks. Activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.). The results of these activities ensure that risk management plan is effective in the long term.

43.1 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: foreign currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk.

The sensitivity analyses is given relate to the position as at 31st March, 2018 and 31st March, 2017.

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non-financial assets and liabilities. The sensitivity of the relevant statement of profit and loss item is the effect of the assumed changes in the respective market risks. The Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. This is based on the financial assets and financial liabilities held as at 31st March, 2018 and 31st March, 2017.

(a) Foreign Exchange Risk and Sensitivity

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities. The Company transacts business primarily in USD and Euro. The Company has obtained foreign currency loans and has foreign currency trade payables, derivative instruments and receivables and is therefore, exposed to foreign exchange risk. The Company regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions.

b) interest Rate Risk and Sensitivity :-

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates .In order to optimize the Company''s position with regards to interest expenses and to manage the interest rate risk treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio

The table below illustrates the impact of a 0.5% increase in interest rates on interest on financial liabilities assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year.This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.

c) Commodity Price Risk:-

The Company''s raw materials i.e.Purified Terephthalic Acid (PTA) & Monoethylene Glycol (MEG) and finished goods i.e. Polyster Chips, Partially Oriented Yarn (POY) and Texrising Yarn (TEX) are petrochemical products. Commodity price risk arises due to fluctuation in prices of petrochemical products. The Company mitigate the risk by natural hedge as any increase/decrease in raw materials price directly reflect the finished goods price.

43.2 Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk for trade receivables, other bank balances, loans, other financial assets and financial guarantees.

a) Trade Receivables:-

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 with the Company for extension 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 low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Sales made to customers on credit are secured through Letters of Credit in some cases to mitigate the credit risk to an extent.

b) Bank Balances:-

The Company seeks to limit its credit risk with respect to banks by only dealing with reputable banks.

c) Refer Note 12.1

43.3 Liquidity Risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company limits its liquidity risk by ensuring funds from trade receivables and bank facilities are available.

The table below provides undiscounted cash flows towards financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

43.4 Competition and Price Risk

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

Note 5 - Capital Management

For the purpose of Company''s capital management, capital includes issued capital, all other equity reserves and debts. The primary objective of the Company''s capital management is to maximise shareholders 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 divided by total capital (equity plus net debts). Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances ,current investments and fixed deposit more than 12 months. Equity comprises all components including other comprehensive income.

Note 6 - Segment Reporting

The Company is engaged only in the business of producing polyester based products. As such, there are no separate reportable segments, the disclouser as required as per Indian Accounting Standard on "Operating Segments" (IND AS -108) is not given.

Note 7 - Subsidiaries Exposure

The Company as on 31st March, 2018 has an aggregate exposure of Rs. 1,430.54 Crore (excluding corporate guarantee as mentioned in Note 38.2) in its subsidiaries namely JBF Global Pte ltd ("JGPL") and JBF Petrochemicals limited ("JPL") by way of investment in equity, loans including interest thereon and other receivables as at 31st March, 2018. The details of above exposure are as under:

The operations of JBF RAK LLC''s plant located at Ras al-Khaimah in U.A.E., a subsidiary of JGPL remained suspended since long due to its financial issues with its lenders etc. Uncertainty is also faced in respect of PTA project at Mangalore, being executed by JPL, due to non-commencement of operation as planned and default in servicing of its borrowings towards principle and interest. The lenders of JPL have also invoked the pledged equity shares of JPL held by JGPL as mentioned in Note 41.5 and corporate guarantee of the Company as mentioned in Note 38.2. Subsequent to the year end, one of the lenders of JPL has made an application with National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016. Latest audited consolidated financial statements of subsidiary are also not available. Negotiation with the lenders of above subsidiaries to find an amicable solution is in process and subsequent to the year end JBF group has entered into a binding term sheet with KKR, an existing financial investors to the Company and JGPL for infusion of funds and change in management control of JGPL.

In view of the above, the impairment testing in respect of the Company''s exposures to its subsidiaries could not be carried out and hence no provision for impairment, if any, has been provided for.

Note 8- Going Concern

During the year the Company underwent significant financial stress due to suspension of manufacturing operations at its subsidiaries, delay in completion of PTA project at Mangalore and adverse market conditions. All these have resulted in financial constraint to the Company, losses in the operations, default in repayment of principle and interest to lenders, classification of Company''s borrowings as Non- performing assets by its lenders and calling back of loans by some of the lenders. Subsequent to the year end, one of the operating creditors has also made an application to NCLT under Insolvency and Bankruptcy Code, 2016 in respect of which the Company is in the process to settle the claim of that creditor.

The Company has submitted a resolution plan to its lenders and has also entered into a binding term sheet with KKR an existing investors for infusion of funds in its subsidiary and change in equity holding and management of JBF Global Pte Ltd. All the plants of the Company are operational and the management is of the view that above circumstances will not affect the operations of the Company and hence continue to prepare its financial statement on going concern basis.

Note 9 - Previous year''s figures have been regrouped and reclassified, wherever necessary to make them comparable.


Mar 31, 2017

Note 1 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS:

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The 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 on its assumptions and estimates on parameters available when the financial statements were prepared. However, existing circumstances and assumptions about future developments 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.

2 Property, plant and equipment, Investment Properties and Intangible Assets:

Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values as per Schedule II of the Companies Act, 2013 or are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes, whichever is more appropriate.

3 Income Tax:

The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to an adjustment to the amounts reported in the standalone financial statements.

4 Contingencies:

Management has estimated the possible outflow of resources at the end of each annual reporting financial year, if any, in respect of contingencies/ claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

5 Impairment of financial assets:

The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

6 Impairment of non-financial assets:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent to those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less cost of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

7 Defined benefits plans:

The Cost of the defined benefit plan and other post-employment benefits and the present value of such obligation 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, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

8 Recoverability of trade receivable:

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

9 Provisions:

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.

10 Fair value measurement of financial instruments :

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (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.

11 Buildings include cost of shares in Co-operative Societies RS, 8000 (As at 31st March, 2016 RS, 8000 and as at 1st April, 2015 RS, 8000).

12 Property, plant and equipment are pledged as collateral against borrowings, the details related to which have been described in note 21 and 25.

13 In accordance with the Indian Accounting Standard (Ind AS -36) on " Impairment of Assets", the management during the year carried out an exercise of identifying the assets that may have been impaired in accordance with the said Ind AS. On the basis of review carried out by the management, there was no impairment loss on property, plant and equipment during the year ended 31st March, 2017.

14 In accordance with the exemption given under Ind AS 101, which has been exercised by the Company, a first time adopter can continue its previous GAAP policy for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognized in the previous GAAP financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period i.e. 1st April, 2016. (Refer note 46 first time adoption of Ind AS). Accordingly, foreign currency exchange differences arising on translation/settlement of long-term foreign currency monetary items acquired before 1st April, 2016 pertaining to the acquisition of a depreciable asset amounting to X 0.06 Crore gain (31st March, 2016 X 8.03 Crore loss) are adjusted to the cost of respective item of property, plant and equipment which is included in foriegn exchange difference above.

15 The carrying value (Gross Block less accumulated depreciation and amortization) as on 1st April, 2015 of the Property, plant and equipment and Intangible Assets is considered as a deemed cost on the date of transition.

16 Other intangible assets represents Computer software other than self generated.

17 The Company''s investment properties as at 31st March, 2017 consists of land held for undetermined future use.

18 As at 31st March, 2017 and 31st March, 2016, the fair values of the properties are Rs, 2.99 Crore and Rs, 3.37 Crore respectively. These valuations are based on valuations performed by an independent valuer, who is a specialist in valuing these types of investment properties. The fair value of the assets is determined using residual technique of valuation. The fair value measurement is categorized in Level 3 fair value hierarchy. The above method consists of estimating and assessing the prevailing market value of a Residential unit after adjusting various factors.

19 The Company has no restrictions on the reliability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

20 The carrying value (Gross Block less accumulated depreciation and amortization) as on 1st April, 2015 of the Investment Properties is considered as a deemed cost on the date of transition.

21 As at 31st March, 2017 RS, Nil (As at 31st March, 2016 Rs, Nil and as at 1st April, 2015 RS, 0.34 Crore) paid to HDFC Asset Management company Limited (the Portfolio Manager) for providing Discretionary Portfolio Management Services which is in the nature of investment administrative management services and include the responsibility to manage, invest and operate the assets under the HDFC AMC PMS -Real Estate Portfolio -1 ("Real Estate Portfolio"), as per the agreement dated 1st January, 2008. The securities representing the outstanding balance of Rs, Nil as at 31st March, 2017 (as at 31st March, 2016 Rs, Nil and as at 1st April, 2015 Rs, 0.34 Crore) have been accounted as investment.

22 Deemed equity investment is on account of fair valuation of fixed deposits pledged for the credit facilities availed by JBF Petrochemical Ltd, a subsidiary Company.

23 Bank Deposits with more than 12 months maturity includes RS, Nil (As at 31st March, 2016 RS, Nil and as at 1st April, 2015 RS,40.86 Crore) pledged as security with a bank for the credit facilities availed by JBF Petrochemical Ltd, a Subsidiary Company.

24 During the year the company was liable to pay MAT under section 115JB of the Income Tax Act, 1961 (The Act) and the amount paid as MAT was allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next Ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB, of the Act. Accordingly as advised in Guidance note on "Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961" issued by the Institute of Chartered Accountants of India, RS, 0.63 Crore (for the year ended 31st March, 2016 RS, Nil) being the excess of tax payable u/s 115JB of the Act over tax payable as per the provisions other than section 115 JB of the Act has been considered as MAT credit entitlement and credited to statement of profit and loss during the year.

25 Inventories are pledged/hypothecated as collateral against borrowings, the details related to which have been described in note 21 and 25.

26 Debts includes Rs, 42.26 Crore (As at 31st March, 2016 Rs, 51.52 Crore and as at 1st April, 2015 Rs, 51.52 Crore), which are overdue and against which the Company has initiated legal proceedings. The Company is of the view that this amount is recoverable. As a matter of prudence and based on the best estimate a provision of Rs, 31.99 Crore (As at 31st March, 2016 Rs, 31.25 Crore and as at 1st April, 2015 Rs, 21.25 Crore) has been made and which has been considered sufficient.

27 Debts includes due from related party Rs, 20.08 Crore (As at 31st March, 2016 Rs, 0.08 Crore and 1st April, 2015 Rs, Nil (Refer note 41)

28 Deposit lien with banks includes RS, 276.00 Crore (As at 31st March, 2016 RS, 276.00 Crore and as at 1st April, 2015 RS, 127.11 Crore) pledged as security with a bank for the credit facilities availed by JBF Petrochemical Ltd, a Subsidiary Company.

29 Unsecured inter-corporate Deposits includes RS, 5.00 Crore (As at 31st March, 2016 RS, 5.00 Crore and as at 01st April, 2015 RS, 5.00 Crore) backed by personal guarantee of a promoter of a borrower.

30 Secured Inter Corporate Deposits (ICD) Includes:-

(i) Loan of RS, 9.00 Crore given in earlier years to TVC Sky Shop Limited (TVC) against the pledge of 2,500,000 equity shares of RS, 10 each representing 25.73% of the paid up equity share capital of TVC.

(ii) Loan of RS, 11.00 Crore given in earlier years to Suryachakra Power Corporation Limited (SPCL) against the pledge of 2,431,434 equity shares of RS, 10.00 each representing 1.62% of the paid up equity share capital of SPCL.

As TVC and SPCL failed to meet its commitments for repayment, the Company invoked the pledge and got transferred above mentioned equity shares in its own Demat account. As the Company does not intends to hold these shares as investment to acquire control of TVC and SPCL but as a security till the above loans are repaid, it continue to disclose the above loans as ICD as against the investment. Further TVC has not been considered as an associate within the meaning of Indian Accounting Standards 28 "Accounting for investment in associates & Joint Venture in Consolidated Financial Statements" notified under the Companies (Indian Accounting Standards) Rules, 2015 (Ind AS).

31 Inter Corporate Deposit (ICD) of RS, 60.00 Crore (As at 31st March, 2016 RS, 60.00 Crore and as at 01st April, 2015 RS, 60.00 Crore) to various parties given in earlier year along with interest accrued and due on the same amounting to RS, 36.93 Crore (As at 31st March, 2016 RS, 36.93 Crore and 01st April, 2015 RS, 39.93 Crore) recoverable are overdue and Company has initiated legal proceedings (including winding up petitions against few of them). In view of the pending litigations and based on principle of prudence, Company has discontinued recognition of interest income on the same w. e. f. 1st January, 2015. Management of the Company is of the view that entire amount is good for recovery in view of securities wherever available, personal guarantee of promoters of borrowers company etc and hence no provision for above receivables is necessary at this stage.

32 Others Includes prepaid expenses and excise deposit.

33 Assets held for sale represents plant and machineries discarded in earlier years and not in use and are carried at estimated net realizable value as determined by the management.

34 Terms/Rights attached to Equity Shares :

The holder of equity shares of Rs, 10 each is entitled to one vote per share. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of that year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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 share holders.

35 75,00,000 Equity share of Rs, 10 each were bought back and extinguished in the Financial Year 2013-14. 19.5 As approved by the Shareholders, the Board of Directors at its meeting held on 28th December, 2015 has allotted 16,374,370 equity shares of Rs,10 each at a premium of Rs, 290/- per share on preferential basis aggregating to Rs, 491.23 Crore to KKR Jupiter Investors Pte Ltd. (Investor) and out of the amount raised Rs, 306.38 Crore has been utilised for the prepayment of term loans, Rs, 11.35 Crore spent as share issue expenses and balance Rs, 173.50 Crore used for Investment in a subsidiary company.

36 Nature and Purpose of Reserve

1. Capital Redemption Reserve:

Capital redemption reserve was created against buy back of shares. The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.

2. capital Reserve

Capital reserve was created upon on forfeiture of share warrants. The reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

3. Securities Premium Account:

Securities premium was created when share are issued at premium. The reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

4. Foreign Currency Monetary items Translation Difference Account :

The reserve pertains to exchange difference relating to long term monetary items in so far as they do not relate to acquisition of depreciable capital assets which are accumulated in "Foreign Currency Monetary Item Translation Difference Account" and amortized in the Statement of Profit and Loss over the balance period of such long term monetary items.

5. Remeasurements of defined benefit plans:

Other comprehensive income comprises of re-measurements of defined benefit obligations.

37 Term loans referred to in (a) above and current maturities of long term borrowings referred in Note 27:-

i) RS, 178.97 Crore (as at 31st March, 2016 RS, 56.56 Crore and as at 1st April, 2015 X 94.19 Crore) carrying interest at the rate of 11.40% to 14.45 % are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat. RS, 122.21 Crore (as at 31st March, 2016 RS, 241.18 Crore and as at 1st April, 2015 RS, 130.00 Crore) carrying interest at the rate of 13.00% are to be secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further to be secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

ii) RS, 18.75 Crore (as at 31st March, 2016 RS, 37.50 Crore and as at 1st April, 2015 Rs, 56.25 Crore) carrying interest at the rate of 12.90% is secured by way of second pari passu charge on the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and the movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat. Rs, 30.00 Crore (as at 31st March, 2016 RS, 40.00 Crore and 1st April, 2015 Rs, 50.00 Crore) carrying interest at the rate of 12.30% is secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

iii) RS, 50.00 Crore (as at 31st March, 2016 RS, 75.00 Crore and as at 1st April, 2015 Rs, 170.00 Crore) carrying interest at the rate of 13.15% are secured by way of first pari passu charge on all the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujrat.

iv) RS, Nil (as at 31st March, 2016 Rs, Nil and 1st April, 2015 Rs, 45.00 Crore) carrying interest at the rate of 13.25% were secured by way of first pari passu charge on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

8 External Commercial Borrowings referred to in (b) above and current maturities of long term borrowings referred in Note 27:-

RS, 231.87 Crore (as at 31st March, 2016 RS, 315.99 Crore and 1st April, 2015 RS, 378.69 Crore) carrying interest at the rate of LIBOR plus 2.5 percentage to 5 percentage are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

39 Vehicle loans referred to in (c) above and current maturities of long term borrowings referred in Note 27:-

RS, 0.08 Crore (2016: RS, 0.05 Crore, 2015: RS, 0.15 Crore) carrying interest at the rate of 8.18-8.88% are secured by specific charge on the vehicles covered under the said loans.

40 Unsecured Term loans referred to in (d) above and current maturities of long term borrowings referred in Note 27:-

i) RS, 44.11 Crore (as at 31st March, 2016 RS, 66.19 Crore and 1st April, 2015 RS, 88.27 Crore) carrying interest at the rate of 3.50% is secured by pledge of fixed deposits with banks of RS, 8.36 Crore (as at 31st March, 2016 RS, 7.81 Crore and 1st April, 2015 RS, 7.24 Crore)

ii) RS, 149.73 Crore (as at 31st March, 2016 RS, Nil and as at 1st April, 2015 RS, Nil) carrying interest at the rate of 14.00% is secured by way of pledged of Equity Shares of the Company by the promoter.

iii) RS, 20.00 Crore (as at 31st March, 2016 RS, Nil and 1st April, 2015 RS, Nil) carrying interest at the rate of 14.00% is secured by way of pledged of Equity Shares of the Company by the promoter.

iv) RS, Nil (as at 31st March, 2016 RS, 25.00 Crore and 1st April, 2015 RS, Nil) carrying interest at the rate of 14.00% is secured by way of pledged of Equity Shares of the Company by the promoter.

41 Terms of Repayment

i) Secured Term Loans from Banks

Loan of RS, 20.00 Crore is repayable in 8 equal quarterly installments of RS, 2.50 Crore starting from June 2018 and ending on March 2020, Loan of RS, 14.99 Crore is repayable in 8 equal quarterly installments of RS, 1.87 Crore starting on May 2018 and ending on February 2020 .Loan of RS, 22.21 Crore is repayable in 8 equal quarterly installments of RS, 2.78 Crore starting on April 2018 and ending on January 2020, Loan of RS, 39.26 Crore is repayable in 9 equal quarterly installments of RS, 4.37 Crore starting on May 2018 and ending on May 2020, Loan of RS, 30.88 Crore is repayable in 13 equal quarterly installments of RS, 2.38 Crore starting on April 2018 and ending on April 2021. Loan of RS, 65.64 Crore is repayable in 17 quarterly installments starting from May 2018 and ending on May 2022 of which first installment is of RS, 1.87 Crore each, Next 4 installments are of RS, 2.81 Crore each, next 4 installments are of RS, 3.75 Crore each, remaining 8 installments are of RS, 4.68 Crore each.

ii) Secured Term Loans from Financial institutions

Loan of RS, 16.67 Crore is repayable in 2 equal quarterly installments of RS, 8.33 Crore starting from June 2018 and ending on September 2018. Loan of RS, 47.50 Crore is repayable in 19 equal quarterly installments of RS, 2.50 Crore starting from May 2018 and ending on November 2022.

iii) Secured External Commercial Borrowings

Loan of RS, 181.60 Crore is repayable in 8 six monthly - first 4 installment of RS, 19.46 Crore (USD 3000000 each) starting from September 2018 and ending March 2020, and next 4 installment of RS, 25.94 Crore (USD 4000000 each) starting from September 2020 and ending March 2022.

iv) Secured Vehicle Loan

Loan of RS, 0.04 Crore is repayable in financial year 2018-19 and balance RS, 0.01 Crore in financial year 2019-20.

v) Unsecured Term Loans From a Banks

Loan of RS, 22.03 Crore is repayable in 1 half yearly installments of RS, 11.04 Crore in April 2018 and one half yearly installment of RS, 10.99 Crore in October

2018.

vi) Unsecured Term Loans from Body Corporate

Loan of RS, 132.39 Crore is repayable in first 3 installments of RS, 8.67 Crore starting from April 2018 and ending October 2018, next 1 installment of RS, 8.65 Crore in January 2019 and balance RS, 97.73 Crore in December 2019. Loan of 20 Crore is repayable in August 2018.

42 Term loans from banks (including current maturities of long term borrowings of Rs, 64.73 Crore) aggregating to Rs, 284.80 Crore (as at 31st March, 2016 Rs, 150.57 Crore and as at 1st April, 2015 Rs, 194.53 Crore) is guaranteed by one of the Directors of the company in his personal capacity.

43. Terms/rights attached to Cumulative Redeemable Preference Shares (CRPS)

The holder of Preference Share of the Company have a right to vote at a General Meeting of the Company only in accordance with limitations and provisions laid down in Section 47 (2) of the Companies Act, 2013. The preference share holders will be entitled to receive out of the remaining assets of the company after distribution to lenders. 75,709 2.5% CRPS are redeemable at par as : 36,509 shares on 30th September, 2020, 17,837 shares on 30th September, 2019 and 21,363 shares on 30th September, 2018. 1,415,000 20% CRPS are redeemable at a premium of Rs, 700 per share as : 315,000 shares on 30th September, 2020, 770,000 shares on 30th September, 2019 and 330,000 shares on 30th September, 2018.The Preference Shares shall carry dividend at the rate of 2.5% and 20.00% per annum payable annually.

44. Working Capital Loans as referred to in (a) above of Rs, 618.02 Crore (as at 31st March, 2016 Rs, 320.34 Crore and as at 1st April, 2015 Rs, 299.51 Crore) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

45. Buyers Credit referred to in (b) above of Rs, 165.48 Crore, (as at 31st March, 2016 Rs, 333.32 Crore and 1st April, 2015 Rs, 323.42 Crore) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

46 Body Corporate Loan as referred to in (c) above of Rs, Nil (as at 31st March, 2016 Rs, 14.00 Crore and as at 1st April, 2015 Rs, Nil) was to be secured by a subservient charge on the present and future current assets of the Company and pledged of equity shares of the Company by the Promoter.

47 As at 31st March, 2017, the Company has overdue loans of Rs, 19.84 Crore (as at 31st March, 2016 Rs, Nil and as at 1st April, 2015 Rs, Nil) for a period of less than 90 days, which have since been paid.

48 Unpaid dividends does not include any amounts, due & outstanding, to be credited to Investor Education & Protection Fund.

49 Fair Valuation techniques used to determine fair value

The Company maintains procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

i) Fair value of trade receivable, cash and cash equivalents, other bank balances, loans, borrowings, trade payables, other current financial assets and other current financial liabilities are approximate at their carrying amounts largely due to the short-term maturities of these instruments.

ii) Fair value of other non-current financial assets and financial liabilities are calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered to approximate to fair value (a level 3 technique).

iii) The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

iv) Fair values of quoted financial instruments are derived from quoted market prices in active markets.

v) Equity Investments in subsidiaries are stated at cost.

vi) Fair value of forward contract, options and currency & interest rate swap are derived on the basis of mark-to-market as provided by the respective bank.

vii) Refer Note 12.1 and 15.3.

50 Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:-

i) Level 1 :- Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date and financial instruments like mutual funds for which net assets value (NAV) is published by mutual fund operators at the balance sheet date.

ii) Level 2 :- Inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). It includes fair value of the financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2.

iii) Level 3 :- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

42.6 Description of the valuation processes used by the Company for fair value measurement categorized within level 3:-

At each reporting date, the Company analyses the movements in the values of financial assets and liabilities which are required to be premeasured or re-assessed as per the accounting policies.

The Company also compares the change in the fair value of each financial asset and liability with relevant external sources to determine whether the change is reasonable. The Company also discusses of the major assumptions used in the valuations.

For the purpose of fair value disclosures, the Company has determined classes of financial assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Note 51- Financial Risk Management Objective and Policies

The Company is exposed to market risk, credit risk and liquidity risk. Risk management is carried out by the company under policies approved by the board of directors. The Company''s documented risk management policies are effective tool in mitigating the various financial risk to which the business is exposed to in the course of daily operations This Risk management plan defines how risks associated with the Company will be identified, analyzed, and managed. It outlines how risk management activities will be performed, recorded, and monitored by the Company. The basic objective of risk management plan is to implement an integrated risk management approach to ensure all significant areas of risks are identified, understood and effectively managed, to promote a shared vision of risk management and encourage discussion on risks at all levels of the organization to provide a clear understanding of risk/benefit trade-offs, to deploy appropriate risk management methodologies and tools for use in identifying, assessing, managing and reporting on risks, and to determine the appropriate balance between cost and control of risk and deploy appropriate resources to manage/optimize key risks. Activities are developed to provide feedback to management and other interested parties (e.g. Audit committee, Board etc.). The results of these activities ensure that risk management plan is effective in the long term.

43.1 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: foreign currency rate risk, interest rate risk and other price risks, such as commodity risk.

The sensitivity analyses is given relate to the position as at 31st March, 2017 and 31st March, 2016.

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non-financial assets and liabilities. The sensitivity of the relevant statement of profit and loss item is the effect of the assumed changes in the respective market risks. The Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. This is based on the financial assets and financial liabilities held as at 31st March, 2017 and 31st March, 2016.

(a) Foreign exchange risk and sensitivity

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities. The Company transacts business primarily in USD and Euro. The Company has obtained foreign currency loans and has foreign currency trade payables, derivative instruments and receivables and is therefore, exposed to foreign exchange risk. The Company is regularly reviews and evaluates exchange rate exposure arising from foreign currency transactions.

The Company has entered interest rate swap derivative contracts in respect of External Commercial borrowing of Rs, 24.32 Crore (In 2016 Rs, 57.90 Crore and in 2015 Rs, 85.71 Crore) outstanding as on 31st March, 2017.

Derivative financial instruments such as foreign exchange forward contracts are used for hedging purpose and not as trading or speculative instruments.

b) interest rate risk and sensitivity :-

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates .In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

The table below illustrates the impact of a 0.5% increase in interest rates on interest on financial liabilities assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.

c) Commodity price risk:-

The Company''s raw materials i.e. Purified Terephthalic Acid (PTA) & Monoethylene Glycol (MEG) and finished goods i.e. Polyester Chips, Partially Oriented Yarn (POY) and Texrising Yarn (TEX) are petrochemical products. Commodity price risk arises due to fluctuation in prices of petrochemical products. The Company mitigate the risk by natural hedge as any increase/decrease in raw materials price directly reflect the finished goods price.

52 Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk for trade receivables, other bank balances, loans, other financial assets and financial guarantees.

a) Trade Receivables:-

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 with the Company for extension 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 low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Sales made to customers on credit are secured through Letters of Credit in some cases to mitigate the credit risk to an extent.

b) Bank Balances:-

The Company seeks to limit its credit risk with respect to banks by only dealing with reputable banks.

53 Liquidity risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company limits its liquidity risk by ensuring funds from trade receivables and bank facilities are available.

The table below provides undiscounted cash flows towards financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

54Competition and price risk

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

Note 55 - Capital Management

For the purpose of Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s capital management is to maximise shareholders 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 total debt divided by total capital plus debt. Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances ,current investments and fixed deposit more than 12 months. Equity comprises all components including other comprehensive income.

Note 56 - Segment Reporting

In accordance with Ind AS 108 ''Operating Segment'', segment information has been given in the consolidated financial statements, and therefore, no separate disclosure on segment information is given in these financial statements.

Note 57 - First Time Adoption of Ind AS

58 Basis of preparation

For all period up to the year ended 31st March, 2016, the Company has prepared its financial statements in accordance with generally accepted accounting principles in India (Indian GAAP). These financial statements for the year ended 31st March, 2017 are the Company''s first annual Ind AS financial statements and have been prepared in accordance with Ind AS.

Accordingly, the Company has prepared financial statements, which comply with Ind AS, applicable for periods beginning on or after 1st April, 2015 as described in the accounting policies. In preparing these financial statements, the Company''s opening Balance Sheet was prepared as at 1st April, 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP Balance Sheet as at 1st April, 2015 and its previously published Indian GAAP financial statements for the year ended 31st March, 2016.

59 Exemptions Applied

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:

1) Property, plant and equipment, intangible assets and investment properties:- The Company has elected to apply previous GAAP carrying amount as deemed cost on the date of transition to Ind AS for its property, plant and equipment, intangible assets and investment properties.

2) Equity investments in subsidiaries :- The Company has elected to apply Indian GAAP carrying amount as deemed cost on the date of transition to Ind AS for its equity investments in subsidiaries.

3) Long Term Foreign Currency Monetary items:- Ind AS 101 allows a first-time adopter to continue the policy adopted for the accounting for exchange differences arising on translation of the long-term foreign currency monetary items recognized in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per Indian GAAP The Company has opted for this exemption and continued its Indian GAAP policy for accounting of exchange differences on long-term foreign currency monetary items recognized in the Indian GAAP financial statements for the year ended March 31,2016. Accordingly, foreign currency differences on such items attributable to the acquisition of property plant and equipment are adjusted against their cost and depreciated prospectively over the remaining useful lives.

60 Mandatory exceptions applied

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements.

1) Estimates:- The Company''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Indian GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1st April, 2015 are consistent with the estimates as at the same date made in conformity with Indian GAAP except where Ind AS required a different basis for estimates as compared to the Indian GAAP

2) Classification and measurement of financial assets and liabilities:- The Company has classified the financial assets and liabilities in accordance with Ind AS 109 "Financial Instruments" on the basis of facts and circumstances that exist at the date of transition to Ind AS.

61 Footnotes to the reconciliation of equity as at 1st April, 2015 and 31st March, 2016 and statement of profit and loss for the year ended 31st March, 2016.

1 Financial liabilities:-

The preference share are classified as a financial liability. The liability initially recognized on fair value and subsequently, the liability is measured at amortized cost using the effective interest rate. The impact on this account has been recognized in the reserve on the transition date and the subsequent impact are recognized in the statement of profit and loss.

2 Dividend and dividend distribution tax:-

Under Indian GAAP proposed dividends were recognized as an adjusting event occurring after the balance sheet date however under the Ind AS proposed dividend are non adjusting events after the balance sheet date and hence recognized as and when approved by the Shareholders.

In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability for dividend of Rs, 19.20 Crore (including dividend distribution tax) for the year ended on 31st March, 2015 has been derecognized with corresponding impact in the reserve on 1st April, 2015.

3 Financial assets:-

The Company has valued all financial assets (other than Investment in subsidiaries which are accounted at cost), at fair value. The impact of the fair value changes on the date of transition, is recognized in the opening reserves and changes thereafter are recognized in the statement of profit and loss.

4 Defined benefit liabilities

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 statement of profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

5 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 "Income Taxes" approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP The impact of transitional adjustments for computation of deferred taxes has resulted in charge to reserve, on the date of transition, with consequential impact to the statement of Profit and Loss and OCI for the subsequent periods.

6 investment Properties:-

The investment properties are reclassified from Property, plant and equipment and presented separately as on date of transition to Ind AS.

7 Loan processing fees / transaction cost:

Under Ind AS such expenditure are considered for calculating effective interest rate. The impact for the periods subsequent to the date of transition is reflected in the Statement of Profit and Loss.

8 Other comprehensive income

Under Indian GAAP the Company has not presented other comprehensive income (OCI) separately. Hence, Indian GAAP statement of profit or loss is reconciled with statement of profit or loss as per Ind AS.

9 Reconciliation of cash flows for the year ended 31st March, 2016

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flow from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2016 as compared with the Indian GAAP


Mar 31, 2016

1 Terms/rights attached to Equity Shares

The holders of equity shares of 10 each are entitled to one vote per share. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the members at the annual general meeting of the year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive out of the remaining assets of the company, after distribution of Preferential amounts. The distribution will be in proportion to the number of equity shares held by share holders.

2. Terms/rights attached to Cumulative Redeemable Preference Shares (CRPS)

The holder of Preference Share of the Company have a right to vote at a General Meeting of the Company only in accordance with limitations and provisions laid down in Section 47 (2) of the Companies Act, 2013. The Preference Shares shall carry dividend at the rate of 2.5 % and 20.00% per annum payable annually. The preference share holders will be entitled to receive out of the remaining assets of the company after distribution to lenders. 75,709 2.5% CRPS are redeemable at par as: 36,509 shares on 30.09.2020, 17,837 shares on 30.09.2019 and 21,363 shares on 30.09.2018. 14,15,000 20% CRPS are redeemable at a premium of Rs, 700 per share as: 3,15,000 shares on 30.09.2020, 7,70,000 shares on 30.09.2019 and 3,30,000 shares on 30.09.2018.

3. Redemption premium on 20% CRPS will be paid out of the Securities Premium Account, hence no provision has been considered necessary.

4. 75,00,000 Equity share of Rs, 10 each were bought back and extinguished in the last five years.

5. As approved by the Shareholders, the Board of Directors at its meeting held on 28th December, 2015 has allotted 1,63,74,370 equity shares of Rs, 10 each at a premium of Rs, 290/- per share on preferential basis aggregating to Rs, 491.23 Crores to KKR Jupiter Investors Pte Ltd. (Investor) and out of the amount raised Rs, 306.38 Crores has been utilized for the prepayment of term loans, Rs, 11.35 Crores spent as share issue expenses and balance Rs, 173.50 Crores used for Investment in a subsidiary company.

6. Term Loans referred to in (a) above and current maturities of long term borrowings refer Note 9:-

(i) RS, 56.56 Crores (Previous Year RS, 94.19 Crores) carrying interest at the rate of 11.57% to 12.25 % are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat. RS, 241.18 Crores (Previous year Rs, 130.00 Crores) carrying interest at the rate of 11.65% to 13.80 % are to be secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further to be secured by Second charge on current assets of the Company, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

(ii) RS, 37.50 Crores (Previous year Rs, 56.25 Crores) carrying interest at the rate of 11.95 % is secured by way of second pari passu charge on the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and the movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat. RS, 40.00 Crores (Previous year Rs, 50.00 Crores) carrying interest at the rate of 12.30% is secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

(iii) RS, 75.00 Crores (Previous Year RS, 170.00 Crores) carrying interest at the rate of 14.10 % are secured by way of First pari passu charge on all the immovable properties, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

iv) RS, 25.00 Crores (Previous Year RS, Nil) carrying interest at the rate of 14.00 % is to secured by way of pledged of Equity Shares of the Company by the promoter.

v) RS, Nil (Previous Year RS, 45.00 Crores) carrying interest at the rate of 13.25 % are secured by way of First pari passu charge on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

7. External Commercial Borrowings referred to in (b) above and current maturities of long term borrowings refer Note 9:-

RS, 315.99 Crores (Previous Year RS, 378.69 Crores) carrying interest at the rate of LIBOR plus 2.5 percentage to 5.5 percentage are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets, present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

8. Vehicle loans referred to in (c) above and current maturities of long term borrowings refer Note 9:-

RS, 0.05 Crores (Previous Year RS, 0.15 Crores) carrying interest at the rate of 8.18-8.88 % are secured by specific charge on the vehicles covered under the said loans.

9. Unsecured Term Loans referred to in (d) above and current maturities of long term borrowings refer Note 9:-

RS, 66.19 Crores (Previous Year RS, 88.27 Crores) carrying interest at the rate of 3.50% is secured by pledge of fixed deposits with banks of RS, 7.81 Crores (Previous Year RS, 7.24 Crores).

10. Terms of Repayment

i) Secured Term Loans from Banks

Loan of RS, 9.38 Crores is repayable in 3 equal quarterly installments of RS, 3.13 Crores starting from June 2017 and ending on December 2017, Loan of Rs, 14.63 Crores is repayable in 6 equal quarterly installments of RS, 2.44 Crores starting from June 2017 and ending on September 2018, Loan of RS, 30.00 Crores is repayable in 12 equal quarterly installments of RS, 2.50 Crores starting from April 2017 and ending on January 2020, Loan of RS, 18.75 Crores is repayable in 4 equal quarterly installments of RS, 4.69 Crores starting on April 2017 and ending on January 2018,Loan of RS, 34.38 Crores is repayable in 11 equal quarterly installments of RS, 3.13 Crores starting on June 2017 and ending on December 2019,Loan of RS, 22.50 Crores is repayable in 12 equal quarterly installments of RS, 1.88 Crores starting on May 2017 and ending on February 2020, Loan of RS, 33.33 Crores is repayable in 12 equal quarterly installments of Rs, 2.78 Crores starting on April 2017 and ending on January 2020, Loan of RS, 56.88 Crores is repayable in 13 equal quarterly installments of RS, 4.38 Crores starting on May 2017 and ending on May 2020, Loan of RS, 40.38 Crores is repayable in 17 equal quarterly installments of RS, 2.38 Crores starting on April 2017 and ending on April 2021.

ii) Secured Term Loans from Financial institution

Loan of Rs, 2.06 Crores is repayable in 1 quarterly installments of Rs, 2.06 Crores payable on April 2017, Loan of RS, 50.00 Crores is repayable in 6 equal quarterly installments of RS, 8.33 Crores starting from June 2017 and ending on September 2018.

iii) Secured External Commercial Borrowings

Loan of Rs, 24.82 Crores is repayable in 3 equal quarterly installments of Rs, 8.27 Crores (USD 12,50,000) starting from June 2017 and ending on December

2017 and Loan of Rs, 211.76 Crores is repayable in 10 six monthly - first 2 installments of Rs, 13.24 Crores (USD 2000000) starting from September 2017 and ending March 2018, next 4 installment of Rs, 19.85 Crores (USD 3000000) starting from September 2018 and ending March 2020, and next 4 installment of Rs, 26.47 Crores (USD 4000000) starting from September 2020 and ending March 2022.

iv) Unsecured Term Loans From a Banks

Loan of Rs, 44.11 Crores is repayable in 3 equal half yearly installments of Rs, 11.04 Crores starting from April 2017 and ending on April 2018 and one half yearly installment of Rs, 10.98 Crores in October 2018 and Loan of Rs, 0.98 Crore is repayable in 1 quarterly Installment of Rs, 0.98 Crore on June 2017 and the same carries interest at the rate 11.70%.

11. Term loans from banks (including current maturities of long term borrowings of Rs, 53.33 Crores) aggregating to Rs, 150.57 Crores (Previous year Rs, 194.53 Crores) is guaranteed by one of the Directors of the company in his personal capacity.

12. Working Capital Loans as referred to in (a) above of Rs, 183.56 Crores (Previous year Rs, 283.27 Crores) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

13. Buyers Credit referred to in (b) above of Rs, 333.32 Crores, (Previous Year Rs, 323.42 Crores) are secured by a first charge on pari passu basis without any preference or priority over each other on all Current Assets of the company both present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are also secured by way of Second charge on pari passu basis on movable and immovable properties of the company both present and future situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

14. Body Corporate Loan as referred to in (c) above of 7 14.00 Crores (Previous year 7 Nil) is to be secured by a subservient charge on the present and future current assets of the Company,and pledged of equity shares of the Company by the Promoter.

15. Disclosure under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 :

Amount due to Micro, Small and Medium Enterprises are disclosed on the basis of information available with the Company regarding status of the suppliers is as follows :

16. Unpaid dividends does not include any amounts, due & outstanding, to be credited to Investor Education & Protection Fund.

17. Other payables includes Salaries, wages & bonus payable, Withholding & Other Taxes payable and Provision for Expenses.

18. Advance from customers includes 7 89.97 Crores (Previous Year 7 58.51 Crores) due to a related party.

19. Interest Accrued but not due on borrowings includes interest of 7 Nil (Previous Year 7 0.39 Crores) due as on 31st March 2016 for delay in creation of charge, which since has been paid by the Company.

Notes:- 1 Represents Investments made through Portfolio Manager and held by them in fiduciary capacity on behalf of the company (Refer Note No-12.4)

20. Non-Current Investments are carried at cost less provision for diminution in the value other than temporary (Refer Note No-1 H).

21. The Aggregate amount of Provision for Diminution in Value of Non Current Investments is X 0.09 Crore (Previous Year X 0.19 Crore)

22. Aggregate Amount of Non - Current Investments :

23. As at 31st March 2016, the Company has invested X Nil (Previous year X 0.34 Crores) to HDFC Asset Management company Limited (the Portfolio Manager) for providing Discretionary Portfolio Management Services which is in the nature of investment administrative management services and include the responsibility to manage, invest and operate the assets under the HDFC AMC PMS -Real Estate Portfolio -1 (" Real Estate Portfolio"), as per the agreement dated 1st January,2008.The securities representing the outstanding balance of X Nil as at 31st March, 2016 ( Previous year X0.34 Crores) have been accounted as investment.

24. Nil (Previous Year 12,750,000) Equity Shares of JBF Petrochemicals Limited , a subsidiary of the company have been pledged against loan taken by that subsidiary company from bank.

25. Others includes mainly Unamortised Ancillary Borrowing Cost and interest receivable.

26. During the previous year the company was liable to pay MAT under section 115JB of the Income Tax Act, 1961 (The Act) and the amount paid as MAT was allowed to be carried forward for being set off against the future tax liabilities computed in accordance with the provisions of the Act, other than Section 115JB, in next Ten years. Based on the future projection of the performances, the Company will be liable to pay the income tax computed as per provisions, other than under section 115JB, of the Act. Accordingly as advised in Guidance note on " Accounting for Credit available in respect of Minimum Alternate Tax under the Income Tax Act 1961" issued by the Institute of Chartered Accountants of India, 7 Nil (Previous year 7 36.97 Crores) being the excess of tax payable u/s 115JB of the Act over tax payable as per the provisions other than section 115JB of the Act has been considered as MAT credit entitlement and credited to statement of profit and loss during the previous year.

1Represents Investments made through Portfolio Manager and held by them in fiduciary capacity on behalf of the company (Refer Note No-12.4) Notes:-

27. The Aggregate amount of Provision for Diminution in Value of Current Investments is 7 0.08 Crores (Previous Year 7 0.04 Crores)

28. Current investments are carried at lower of cost and market value/NAV computed individually (Refer Note No-1 H).

29. Aggregate Amount of Current Investments

30. Debts due for a period exceeding six months includes RS, 51.52 Crores (Previous Year RS, 51.52 Crores), which are overdue and against which the Company has initiated legal proceedings. The Company is of the view that a substantial part of this amount is recoverable. As a matter of prudence and based on the best estimate a provision of RS, 31.25 Crores (Previous Year RS, 21.25 Crores) has been made and which has been considered sufficient.

31 Deposit earmark against borrowings includes Rs, 276.00 Crores (Previous year RS, 167.97 Crores) pledged as security with a bank for the credit facilities availed by JBF Petrochemical Ltd, a Subsidiary Company.

32. Unsecured inter-corporate Deposits includes 7 5.00 Crores (Previous year 7 5.00 Crores) backed by personal guarantee of a promoter of a borrower.

33. Secured Inter Corporate Deposits (ICD) Includes:-

(i) Loan of 7 9.00 Crores given in earlier years to TVC Sky Shop Limited (TVC) against the pledge of 25,00,000 equity shares of 710 each representing 25.73% of the paid up equity share capital of TVC.

(ii) Loan of 7 11.00 Crores given in earlier years to Suryachakra Power Corporation Limited (SPCL) against the pledge of 24,31,434 equity shares of 710.00 each representing 1.62% of the paid up equity share capital of SPCL.

As TVC and SPCL failed to meet its commitments for repayment, the Company invoked the pledge and got transferred above mentioned equity shares in its own Demat account. As the Company does not intends to hold these shares as investment to acquire control of TVC and SPCL but as a security till the above loans are repaid, it continue to disclose the above loans as ICD as against the investment. Further TVC has not been considered as an associate within the meaning of Accounting Standards 23 (AS 23) "Accounting for investment in associates in Consolidated Financial Statements" as prescribed under section 133 of the Companies Act, 2013.

34. Inter Corporate Deposit (ICD) of 7 60.00 Crores (Previous year 7 60.00 Crores) to various parties given in earlier year along with interest accrued and due on the same amounting to 7 36.93 Crores (Previous year 7 39.93 Crores) recoverable are overdue and Company has initiated legal proceedings (including winding up petitions against few of them). In view of the pending litigations and based on principle of prudence, Company has discontinued recognition of interest income on the same w. e. f. 1st January 2015. Management of the Company is of the view that entire amount is good for recovery in view of securities wherever available, personal guarantee of promoters of borrowers company etc and hence no provision for above receivables is necessary at this stage.

35. Others includes Prepaid Expenses and Cenvat Receivable.

36. In accordance with the regulation 34 (3)of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

37. Interest Receivable includes 7 31.27 Crores (Previous Year 7 0.07 Crores) due from a related party.

38. Loans and advance to related parties includes loans given for business purpose including setting up project of its subsidiary companies.

B. Defined Benefit Plan

The present value of Employees'' Gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

The estimated future salary increases takes into account inflation, seniority, promotion and other retirement factors including supply and demand in the employment market. The above information is certified by the actuary.

39. Employee Stock Option Scheme

i. The Employee Stock Option Scheme, 2009 (JBF ESOS 2009) was introduced and implemented during the year 2009-10 as approved by the shareholders at the Annual General Meeting held on 25th September, 2009. The equity shares reserved for issuance to eligible employee of the company as at 31st March, 2016 is Nil (Previous Year Nil) Equity Shares of RS, 10/- each.

ii. On 25th September, 2009 the Company has granted 21,54,000 Options convertible into Equity Shares of RS, 10 each to 298 employees. The Exercise Price of the Options was fixed at RS, 60 each for conversion in to one Equity Share of the Company. Out of above Options Nil (Previous Year 1404) Options have been Lapsed during the year 2015-16.

iv. All the Options granted till date have an exercise period of Twenty Four months from the date of their vesting.

* Rs,0.07 Crores (Previous year RS, Nil) considered as share issue expenses.

40. Corporate social responsibility Expenses

(a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the company during the year is RS, 2.23 Crores (Previous Year RS, 0.52 Crores)

(b) Expenditure related to Corporate Social Responsibility is RS, 0.72 Crores (Previous Year RS, 0.20 Crores).

41. General Expenses includes Directors Sitting Fees RS, 0.19 Crores (Previous Year RS, 0.14 Crores)

42. Management is of the view that above litigation will not impact financial position of the Company.

43. RELATED PARTY TRANSACTIONS

As per the Accounting standard -18, As notified by Companies (Accounting Standards) Rules 2006, the disclosure of transactions with related parties as defined in the Accounting Standard are given below :

i. Subsidiary Companies:

JBF Global Pte Ltd.

JBF RAK LLC.

JBF Petrochemicals Limited

JBF Bahrain SPC

JBF Global Europe BVBA

JBF Bio Glicols Industia Quimica Ltda

JBF Trade Invest PTE. LTD

JBF America INC

ii. Key Managerial Personnel :

Mr. B.C. Arya Mr. R.Gothi

Mr. P N.Thakore (upto 31.08.15)

Mr. N. K. Shah

iii. Relatives of Key Managerial Personnel :

Mrs. Veena Arya Relative of Shri B.C. Arya

Mr. Cheerag Arya Relative of Shri B.C. Arya

Ms.Chinar Arya Relative of Shri B.C. Arya

Mrs. Usha Thakore Relative of Shri P N. Thakore

Mr. Abhishek R. Gothi Relative of Shri R. Gothi

Mr. Abhishek P Thakore Relative of Shri P N. Thakore Ms. Akanksha P Thakore Relative of Shri P N. Thakore

iV. Enterprises over which the Key Managerial personnel & their relatives have significant influence

Vaidic Resources Pvt. Ltd.

Notes to Related Party Transactions:

i. Non-current Investment includes RS, 396.17 Crores in JBF Global Pte Ltd.

ii. Short term Loan & Advance includes RS, 326.19 Crores given to JBF Pertochemical Ltd and Rs, 30.05 Crores given to JBF Global Pte Ltd.

iii. Interest receivable includes Rs, 30.87 Crores from JBF Petrochemical Ltd.

iv. Other Current Assets includes RS, 71.11 Crores from JBF Petrochemicals Ltd. v Trade Receivable includes RS, 0.08. Crores from JBF Petrochemicals Ltd.

vi. Trade Payables includes RS, 3.97 Crores due to JBF RAK LLC.

vii. Other Current Liabilities includes RS, 89.97 Crores due to JBF RAK LLC.

viii. Dividend paid includes RS, 5.55 Crores & RS, 0.78 Crores to Mr. B. C. Arya & Vaidic Resources Pvt. Ltd. respectively.

ix. Income: Revenue from Operations includes RS, 119.17 Crores and RS, 79.44 Crores from JBF RAK LLC and JBF Bahrain SPC respectively. Interest Income includes RS, 34.70 Crores from JBF Petrochemical Ltd, Guarantee Commission Includes Rs, 27.60 Crores from JBF Petrochemicals Ltd .

x. Expenditures: Purchases Includes Rs, 7.48 Crores from JBF Rak LLC. Managerial Remuneration include RS, 6.04 Crores, RS, 0.98 Crores and Rs, 0.83 Crores paid to Mr. B. C. Arya & Mr. Rakesh Gothi, P N. Thakore respectively.

xi. Reimbursement of Expenses includes RS, 0.05 Crores from JBF Petrochemical Ltd.

xii. Guarantee given and Letter of credit facility extended by the Company includes RS, 3070.27 Crores on behalf of JBF Petrochemical Ltd.

xiii. Fixed deposit pledged with banks includes RS, 276.00 Crores for credit facility availed by JBF Petrochemical Ltd .

44. As per Accounting Standard (AS) 17 on "Segment Reporting", Segment Information has been provided under the Notes to Consolidated Financial Statements.

45. I income TaRs, Assessment of the Company has been completed up to the accounting year ended on 31st March, 2011.

v) The Company has entered interest rate swap derivatives contracts in respect of External Commercial Borrowings of Rs, 57.90 Crores (Previous Year Rs, 85.71 Crores) outstanding as on 31st March, 2016.

46. All Derivative and financial instruments acquired by the company are for hedging purpose only.

47. Foreign Currency exposures (except currency swap) that are not hedged by derivative instruments as on 31st March, 2016 relating to :

48. The Expenses on account of forward premium on outstanding forward exchange contracts to be recognized in the Statement of Profit and Loss of subsequent accounting year aggregate to Rs, Nil (Previous Year Rs, 1.21 Crores).

49 Previous year''s figures have been regrouped, rearrange and reclassified wherever necessary to make them comparable with the current year''s classification/ disclosure.


Mar 31, 2013

1.1 employment stock option scheme

i. The Employee Stock Option Scheme, 2009 (JBF ESOS 2009) was introduced and implemented during the year 2009-10 as approved by the shareholders at the Annual General Meeting held on 25th September, 2009. The equity shares reserved for issuance to eligible employee of the company as at

31st March, 2013 is 2,56,301 (Previous Year 2,51,728) Equity Shares of Rs. 10/- each. ii. On 25th September, 2009 the Company has granted 21,54,000 Options convertible into Equity Shares of Rs. 10 each to 298 employees. The Exercise Price

of the Options was fixed at Rs. 60 each for conversion in to one Equity Share of the Company. Out of above Options 4,573 (Previous Year 24,677) Options

have been Lapsed during the year 2012-13. iii. During the year the Company has further granted Nil (Previous Year 5,019) Options convertible into Equity Shares of Rs. 10 each to 2 employees. The Exercise

Price of the Options was fixed at Rs. 60 each for conversion in to one Equity Share of the Company. iv. The above Options vest over a period ranging from one to three years as follows.

2 Related Party transaction

As per the Accounting standard -18, As notified by Companies (Accounting Standards) Rules 2006, the disclosure of transactions with related parties as defined in the Accounting Standard are given below :

i. subsidiary Companies:

JBF Global Pte. Ltd. JBF RAK LLC.

JBF Petrochemicals Limited JBF Bahrain SPC

JBF Global Europe BVBA JBF Bio Glicols Industria Quimica Ltda

ii. Key Managerial Personnel :

Mr. B.C. Arya Mr. R. Gothi

Mr. P.N. Thakore Mr. N.K. Shah

iii. Relatives of Key Managerial Personnel :

Mrs. Veena Arya Relative of Shri B.C. Arya

Mr. Cheerag Arya Relative of Shri B.C. Arya

Ms. Chinar Arya Relative of Shri B.C. Arya

Mrs. Usha Thakore Relative of Shri P.N. Thakore

Mr. Abhishek R. Gothi Relative of Shri R. Gothi

Mr. Abhishek P. Thakore Relative of Shri P.N. Thakore

Ms. Akanksha P. Thakore Relative of Shri P.N. Thakore

iV. enterprises over which the Key Managerial personnel and their relatives have significant influence

Arya Texturisers & Twisters

Arya Industries

Vaidic Resources Pvt. Ltd.

3.1 The Expenses on account of forward premium on outstanding forward exchange contracts to be recognised in the Statement of Profit and Loss account of subsequent accounting year aggregate to Rs. 0.60 Crores (Previous Year Rs. 1.22 Crores).

4 The financial statements for the year ended 31st March, 2013 were adopted by the Board of Directors on 23rd May, 2013. Subsequent to it the Board of Directors at its meeting held on 13th August, 2013 proposed to revise the proposed dividend to equity share holders from Rs. 6 (60%) to Rs. 1 (10 %) per equity share of Rs. 10 each, resulting into reduction in amount as reported on 23rd May, 2013 in respect of proposed dividend & tax thereon from Rs. 43.58 Crores & Rs. 7.78 Crores to Rs. 7.26 Crores & Rs. 1.61 Crores respectively and consequently increase in amount of reserve & surplus from Rs. 839.30 Crores to Rs. 881.79 Crores. Accordingly to give the effect of above revision, the financial statements for the year ended 31st March, 2013 have been revised and adopted by the Board of Directors at its meeting held on 21st August, 2013.

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


Mar 31, 2012

1.1 Terms/rights attached to equity shares

Holders of equity shares of Rs. 10 each are entitled to one vote per share. The equity shareholders are entitled to dividend only if dividend in a particular financial year is recommended by the Board of Directors and approved by the member at the annual general meeting of the year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive out of the remaining assets of the company, after distribution of Preferential amounts . The distribution will be in proportion to the number of equity shares held by share holders.

1.2 Terms/rights attached to Cumulative Redeemable Preference Shares

The holder of Preference Share of the Company have a right to vote at a General Meeting of the Company only in accordance with limitations and provisions laid down in Section 87 (2 ) of the Companies Act, 1956 . The Preference Shares shall carry dividend at the rate of 2.5 % per annum payable annually. The preference share holders will be entitled to receive out of the remaining assets of the company after distribution to all the secured and unsecured creditors. These CRPS are redeemable at par : Rs. 61.78 Crores on 30.09.2019 and Rs. 26.61 Crores on 30.09.2018 .

1.3 The Company has allotted 61,77,837 (Previous Year 26,61,363) 2.5% Cumulative Redeemable Preference Shares (CRPS) of Rs. 100 each fully paid up aggregating to Rs. 61.78 Crores (Previous Year Rs. 26.61 Crores) to Bank of India in pursuant to line of credit approved by a bank to fund derivative losses.

1.4 Equity options outstanding as on 31st March, 2012:

i. To ESOS holders 9,98,887 ( Previous year 13,89,712 ) Refer Note No 26.3

ii. To a bank in respect of optionally convertible loan (OPCL) being a part of line of credit sanctioned to finance derivative losses. The OPCL outstanding as on 31st March, 2012 is Rs. 50.51 Crores ( Previous year 15.21 Crores) Refer Note No 36.3.

1.5 Of the above Equity Shares 1,82,450 Equity Shares of Rs. 10/- each were issued pursuant to the scheme of Amalgamation of Microsynth Fabrics (India) Limited with the Company as sanctioned by Hon'ble High Court of Judicature at Mumbai vide its order dated 23rd October, 2008.

1.6 The details of shareholder holding more than 5% shares :

2.1 Debentures referred to in (a) above are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets , present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

2.2 Term Loans from Banks & Financial Institutions referred to in ( b ) above are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets , present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat and are further secured by Second charge on current assets of the Company situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

2.3 External Commercial Borrowings referred to in (c) above are secured by way of first mortgage & charge on pari passu basis on all the immovable and movable properties except current assets , present and future, situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

2.4 The Loans for vehicle have been secured by specific charge on the vehicles covered under the said loans.

2.5 Terms of Repayment

i) Debentures

Debentures are redeemable at par in one or more installments on various dates with the farthest redemption being on 27.10.2014 and the earliest being 27.01.2013.The debentures are redeemable as follows Rs. 10 Crores as on 27.10.2014, Rs. 10 Crores as on 27.07.2014, Rs. 10 Crores 27.01.2014 and Rs. 10 Crores 27.07.2013.

ii) Secured Term Loans from Banks

Loan of Rs. 6.29 crores is repayable in 4 equal quarterly installments of Rs. 1.57 crores starting from April 2013 and ending on January 2014 and loan of Rs. 251.16 crores is repayable in 6 equal quarterly installments of Rs. 3.22 Crores starting from June 2013 and ending on September 2014 and there after 16 equal quarterly installments of Rs. 14.49 Crores starting from December 2014 and ending on September 2018.

iii) Secured Term Loans from Financial Institutions

Loan of Rs. 21.43 crores is repayable in 3 equal annual installments of Rs. 7.14 crores starting from July 2013 and ending on July 2015.

iv) Secured External Commercial Borrowings

Loan of Rs. 45.78 crores is repayable in 12 equal quarterly installments of Rs. 3.82 crores (USD 7,50,000) starting from June 2013 and ending on March 2016, loan of Rs. 101.74 crores is repayable in 16 equal quarterly installments of Rs. 6.36 crores (USD 12,50,000) starting from March 2014 and ending on December 2017 and loan of Rs. 71.22 crores is repayable in 14 equal quarterly installments of Rs. 5.09 crores (USD 10,00,000) starting from May 2013 and ending on August 2016.

v) Secured Vehicle Loans

Vehicle Loans are repayable as under : Rs. 0.17 crores in financial year 2013 -14, Rs. 0.17 crores in financial year 2014-15 and balance of Rs. 0.03 crores in financial year 2015-16.

vi) unsecured Term Loans From a Bank

Loan of Rs. 88.39 crores is repayable in 8 equal half yearly installments of Rs. 11.04 crores starting from April 2014 and ending on October 2017 and loan of Rs. 50.51 crores will be converted in to Equity by 30.09.2013 at a price to be determine according to SEBI rules and guidelines prevailing at that time.

vii) unsecured External Commercial Borrowings

Loan of Rs. 50.49 crores is repayable in July 2013.

2.6 Term loans from banks aggregating to Rs. Nil (Previous year Rs. 15.72 Crores) are guaranteed by two of the Directors of the Company and Rs. 139.74 Crores (Previous year Rs. 65.43 Crores) are guaranteed by one of the Directors of the company in their personal capacity.

3.1 Working Capital Loans as referred to in (a) above are secured by hypothecation of inventory of Raw Materials ,Work in process, Finished goods, Stores and spares, Packing materials and Book Debts and are also secured by way of Second charge on the immovable properties of the company situated at Silvassa, Dadra & Nagar Haveli (Union Territory) and at Sarigam, District Valsad, Gujarat.

@ Does not include any amounts, due & outstanding, to be credited to Investor Education & Protection Fund.

* Other payable includes Salaries, wages & bonus payable, Withholding & Other Taxes payable and outstanding liabilities.

*The company has recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2011 of Rs. 15.30 Crores as per the estimated pattern of despatches. During the year Rs. 15.21 Crores was utilised for clearance of goods. Liability recognised under this class as at 31st March, 2012 is Rs. 17.02 Crores. Actual outflow is expected in the next financial year.

4.1 Buildings include Rs. 8000/- being the value of Shares of Co-operative Societies.

4.2 Additions to fixed assets & Capital work in Progress are inclusive of loss of Rs. 16.80 Crores (Previous Year Rs. 6.00 Crores) on account of foreign exchange difference during the year.

4.3 Capital work in progress includes :

i) Rs. 6.24 Crores on account of Preoperative expenses (Previous Year Rs. 6.21 Crores).

ii) Rs. 5.88 Crores on account of cost of construction material at site (Previous Year Rs. 26.82 Crores)

11.4In accordance with the Accounting Standard (As -28) on "Impairment of Assets" As notified by Companies (Accounting Standards) Rules 2006, the management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard. On the basis of this review carried out by the management, there was no impairment loss on Fixed Assets during the year ended 31st March, 2012.

5.1 Non-Current Investments are carried at cost less provision for diminution in the value other than temporary (Refer Note No-1 H).

5.2 Aggregate Amount of Non - Current Investments :

5.3 As at 31st March, 2012, the company has invested Rs. 1.45 Crores (Previous year Rs. 1.76 Crores) to HDFC Asset Management company Limited (the Portfolio Manager) for providing Discretionary Portfolio Management Services which is in the nature of investment administrative management services and include the responsibility to manage, invest and operate the assets under the HDFC AMC PMS -Real Estate Portfolio -1 ("Real Estate Portfolio"), as per the agreement dated 1st January, 2008 The securities representing the outstanding balance of Rs. 1.45 crores as at 31st March, 2012 (Previous year Rs. 1.76 crores) have been accounted as investment.

* Loans and advances to a related party represents share application money pending allotment given to JBF Global Pte Ltd., a subsidiary company. **Mainly includes unamortised ancillary borrowing cost and Interest Receivable.

Notes:-

6.1 The Aggregate amount of Provision for Diminution in Value of Current Investments is Rs. 0.27 Crores ( Previous Year Rs. 0.10 Crores)

6.2 Current investments are carried at lower of cost and market value/NAV, computed individually (Refer Note No. 1 H).

(Note:- As per Company policy, Loans given to employees are not considered under this clause.

b) Investment by the loanee in the share of the Company : Nil

c) Investment by the JBF Global Pte Ltd in ordinary shares of JBF RAK LLC, a subsidiary company : 2,37,159 Shares

7.1 Salaries, Wages and Allowances includes managerial remuneration of Rs. 4.42 Crores subject to approval of Central Government.

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

B. Defined Benefit Plan

The present value of Employees' Gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

The estimated future salary increases takes into account inflation, seniority, promotion and other retirement factors including supply and demand in the employment market. The above information is certified by the actuary.

7.3 Employment Stock option Scheme

i. The Employee Stock Option Scheme,2009 ( JBF ESOS 2009) was introduced and implemented during the year 2009-10 as approved by the shareholders at the Annual General Meeting held on 25th September, 2009. The equity shares reserved for issuance to eligible employee of the company as at 31st March, 2012 is 2,51,728 ( Previous Year 2,32,070) Equity Shares of Rs. 10/- each .

ii. On 25th September, 2009 the Company has granted 21,54,000 Options convertible into Equity Shares of Rs. 10 each to 298 employees. The Exercise Price of the Options was fixed at Rs. 60 each for conversion in to one Equity Share of the Company. Out of above Options 24,677 (Previous Year 70,784) Options have been lapsed during the year 2011-12.

iii. During the year the Company has further granted 5019 (Previous Year 45,000) Options convertible into Equity Shares of Rs. 10 each to 2 employees. The Exercise Price of the Options was fixed at Rs. 60 each for conversion in to one Equity Share of the Company.

iv. The above Options vest over a period ranging from one to three years as follows.

v. All the Options granted till date have an exercise period of Twenty Four months from the date of their vesting.

vi. The Company applies intrinsic- value method of accounting for determining Employee Compensation Expenses for its ESOS. Had the Employee Compensation Expenses been determined using the fair value approach, the Company's Net Profit and basic and diluted earnings per share as reported would have reduced as indicated below:

Since long term optionally convertible loan of Rs. 50.51 crores (previous year Rs. 15.21 Crores) are to be converted into such number of equity shares of Rs. 10 each at a price to be determined according to SEBI Rules & Guidelines prevailing at that time, total number of equity shares to be issued on exercise of conversion option is not certain and hence the same has not been considered for the computation of Diluted Earning Per Share.

8 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in Crores)

Particulars As at As at 31st March, 2012 31st March, 2011

(i) Contingent Liabilities

(a) Demands not acknowledged as debt

i) Income Tax 0.25 7.41

ii) Excise Duty (Rs.1.13 Crores deposited under protest) 1.29 1.26

iii) Service tax 1.44 1.49

iv) Others 0.09 0.09

(b) Guarantees issued by the Bankers 251.74 190.06

(Bank guarantees are provided under contractual/legal obligation. No cash outflow is expected.)

(c) Corporate Guarantee to banks against the Letter of credit facility to Subsidiary Company. (No Cash outflow -- 531.73 is expected)

(d) Letter of Credit includes Rs. 152.61 Crores (Previous year Rs. 157.62 Crores) extended for Subsidiary Company. 305.91 175.82

(These are established in favour of vendors but cargo/ material under the aforesaid Letter of Credit are yet to be received as on end of the year. Cash outflow is expected on the basis of payment terms as mentioned in Letter of Credit.)

(e) Export Bill Discounting 10.09 -- (No Cash outflow is expected)

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance) 22.66 11.48

(Cash outflow is expected on execution of such capital contracts, on progressive basis)

Notes to Related Party Transactions:

i. Share Application Money includes Rs. 397.95 Crores given to JBF Global Pte. Ltd.

ii. Non-current Investment includes Rs. 25.00 Crores invested in JBF Petrochemicals Ltd.

iii. Short term Loan & Advances includes Rs. 74.28 Crores & Rs. 24.57 Crores given to JBF Petrochemicals Ltd & JBF Global Pte. Ltd respectively.

iv. Trade Receivable includes Rs. 2.69 Crores from JBF RAK LLC.

v. Dividend paid includes Rs. 15.96 Crores, Rs. 3.43 Crores & Rs. 3.12 Crores to Mr. B C Arya, Chinar Arya & Vaidic Resources Pvt. Ltd. respectively.

vi. Income: Revenue from Operations includes Rs. 53.11 Crores to JBF RAK LLC. Interest Income Includes Rs. 2.87 Crores from JBF Petrochemicals Ltd and Miscellaneous Income includes Rs. 1.25 Crores from JBF RAK LLC .

vii. Expenditures: Purchases include Rs. 41.74 Crores from Arya Industries respectively. Managerial Remuneration include Rs. 4.42 Crores and Rs. 0.67 Crores paid to Mr. B C Arya & Mr. Rakesh Gothi respectively.

viii. Equity Shares alloted on exercise of ESOS includes Rs.0.09 Crores & Rs. 0.08 Crores to Mr. Rakesh Gothi and Mr. P N. Thakore respectively.

ix. Letter of credit facility extended by the Company includes Rs. 152.61 Crores on behalf of JBF Global Pte. Ltd.

9 As per Accounting Standard (AS) 17 on " Segment Reporting ", Segment Information has been provided under the Notes to Consolidated Financial Statements.

10 Income Tax Assessment of the Company has been completed up to the accounting year ended on 31 March, 2009.

10.1 All Derivative and financial instruments acquired by the company are for hedging purpose only.

10.2 The loss of Rs. 167.77 Crores in respect of foreign exchange and interest rate swap contracts for the year have been charged to the Statement of Profit and loss. The Mark to market losses in respect of the derivative contracts for Currency & Interest Swap as on 31st March, 2012 is Rs. 47.48 Crores (Previous Year Rs. 144.63 Crores), which have not been provided in the books of account since the company is of the view that the above losses may be payable only if loss conditions are triggered on observation dates starting from 3rd August, 2010 and ending on 3rd July, 2013. The loss if any, will be accounted for on actual settlements. Bank of India with whom, one of above derivative transaction is outstanding has approved a line of credit to fund losses on account of derivative transaction by way of debt, convertible loan and cumulative redeemable preference shares. Accordingly during the year, the Company has issued 61,77,837 (Previous Year 26,61,363), 2.5% Cumulative Redeemable Preference Shares (CRPS) aggregating to Rs. 61.78 Crores (Previous Year Rs. 26.61 Crores) & bank has disbursed loan of Rs. 61.78 Crores (Previous Year Rs. 26.61 Crores) and optionally convertible loan of Rs. 35.30 Crores (Previous Year Rs. 15.21 Crores).

10.3 The Expenses on account of forward premium on outstanding forward exchange contracts to be recognised in the profit & loss account of subsequent accounting year aggregate to Rs. 1.22 Crores (Previous Year Rs. Nil).

11 The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

1. In accordance with the Accounting Standard (As -28 ) on " Impairment of Assets" As notified by Companies (Accounting Standards) Rules 2006, the management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard . On the basis of this review carried out by the management, there was no impairment toss on Fixed Assets during the year ended 31st March, 2011.

2. As approved by the shareholders at their meeting held on 5th March, 2010, during the year 52,90,471 Eguity Shares of Rs. 10 each fully paid up at a premium of Rs. 147.15 per share have been alloted to Qualified Institutional Buyers. Net issue proceed received has been fully utilised towards additiona working capital and investments in subsidiary company.

3. Advances recoverable in cash or m kind or for value to be received includes Rs. NIL (Previous Year Rs. Nil Crores) due from a firm in which one of the Directors' is interested as a partner. The maximum amount outstanding at any time during the year was Rs. Nil crores ( Previous Year Rs. 0.60 Crores)

4. In the opinion of the management, the company is engaged only in the business of producing polyester based products. As such, there are no separate reportable segments,

5. In the opinion of the Management, the Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business.

6. Income Tax Assessment of the Company has been completed up to the accounting year ended on 31st March 2008.

7. Employee Stock Option Scheme:-

i. The Employee Stock Option Scheme,2009 ( JBF ESOS 2009) was introduced and implemented during the year 2009-10 as approved by the shareholders at the Annual General Meeting held on 25th September,2009. The Company has reserved issuance of 21,78,486 Equity Shares of Rs. 10/- each for offering to eligible employees of the Company.

ii. On 25th September, 2009 the Company has granted 21,54,000 Options convertible into Equity Shares of Rs. 10 each to 298 employees. The Exercise Price of the Options was fixed at Rs. 60 each for conversion in to one Equity Share of the Company. Out of above Options 70,784 (Previous Year 1,81,800) Options have been Lapsed during the year 2010-11.

iii. During the year the Company has further granted 45,000 Options convertible into Equity Shares of Rs. 10 each to 4 employees. The Exercise Price of the Options was fixed at Rs. 60 each for conversion in to one Equity Share of the Company.

v. All the Options granted till date have an exercise period of Twenty Four months from the date of their vesting.

vi. The Company applies intrinsic- value method of accounting for determining Employee Compensation Expenses for its ESOS. Had the Employee Compensation

8. As at 31 st March 2011, the company has invested Rs. 1.76 Crores (Previous year Rs. 1.46 Crores) to HDFC Asset Management company Limited (the Portfolio Manager) for providing Discretionary Portfolio Management Services which is in the nature of investment administrative management services and include the responsibility to manage .invest and operate the assets under the HDFC AMC PMS -Real Estate Portfolio -1 ("Real Estate Portfolio"), as per the agreement dated 1st January,2008 .The securities representing the outstanding balance of Rs. 1.76 crores as at 31st March, 2011 (Previous year Rs. 1.28 crores) have been accounted as investment in schedule " F".

9.Previous year's figures have been reworked/ regrouped/ rearranged and reclassified wherever necessary. Amount and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amount and other disclosures relating to the current year.


Mar 31, 2010

1. In accordance with the Accounting Standard (As -28 ) on " Impairment of Assets" As notified by Companies ( Accounting Standards) Rules 2006, the management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit in accordance with the said Accounting Standard . On the basis of this review carried out by the management, there was no impairment loss on Fixed Assets during the year ended 31st March, 2010.

2. The Company has repurchased and cancelled 1430 Foreign Currency Convertible Bonds ( FCCBs) of the Face Value of USD 10000 each on 20th April, 2009,as per the approval of the Reserve Bank of India, at a discount. This has resulted in a saving of Rs. 17.46 Crores which has been reflected as part of Other Income for the year ended 31st March, 2010. Consequent upon such repurchase and cancellation, the Companys obligations to convert the said FCCBs into shares, if so claimed by the FCCB holders and/ or to redeem the same in foreign currency, have come to an end vis-s vis cancelled FCCBs. Rs. 9.15 Crores being premium on redemption has been reversed on buy back of FCCBs.

3. Debtors includes Rs. NIL (Previous Year Rs. 2.81 Crores) due from the firms in which one of the Directors and/or his relative are interested as partner.

4. Advances recoverable in cash or in kind or for value to be received includes Rs. NIL (Previous Year Rs. 0.60 Crores) due from a firm in which one of the Directors and/or his relative are interested as partner. The maximum amount outstanding at any time during the year was Rs. 0.60 crores (Previous Year Rs. 0.60 Crores)

5.The Expense on account of forward premium on outstanding forward exchange contracts to be recognized in the profit & loss account of subsequent accounting year aggregate to Rs. NIL (Previous Year Rs.0.19 Crores).

6. The company has paid till date Rs 1.46 Crores (Previous year Rs 0.80 Crores) to HDFC Asset Management company Limited (the Portfolio Manager) for providing Discretionary Portfolio Management Services which is in the nature of investment administrative management services and include the responsibility to manage, invest and operate the assets under the HDFC AMC PMS -Real Estate Portfolio -1 ("Real Estate Portfolio"), as per the agreement dated 1st January, 2008. The securities representing the outstanding balance of Rs. 1.28 crores as at 31st March, 2010 (Previous year Rs 0.73 crores) have been accounted as investment.

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