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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Navin Fluorine International Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2023

The company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the company considers information from a variety of sources including:

¦ current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences

¦ discounted cash flow projections based on reliable estimates of future cash flows

¦ capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.

The fair values of investment properties have been determined by independent valuer. The valuation is based on market research, market trend and comparable values as considered appropriate. ALL resulting fair value estimates for investment properties are included in level 3.

(b) Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of H2.00 per share. Each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the company in proportion to the number of and amounts paid on the shares held.

(c) Information relating to Employee Stock Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 44.

41. LEASING ARRANGEMENT

The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancellable in nature and range between 11 months to 60 months. These leave and license agreements are generally renewable or cancellable at the option of the Company or the lessor. The lease payment recognised in the Statement of Profit and Loss is H0.52 crores (March 31, 2022: H0.86 crores). Refer note 5B for further information.

42.2 Defined Benefit Plans

(i) Gratuity (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Company''s defined benefit gratuity plan requires contributions to be made to a separately administered trust. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. Company makes provision for gratuity fund based on an actuarial valuation carried out at the end of the year using ''projected unit credit'' method.

42.2 Defined Benefit Plans (contd.)

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

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

There was no change in the methods and assumptions used in preparing the sensitivity analysis from previous year.

(ii) Provident fund (funded)

In respect of certain employees, provident fund contributions are made to a separately administered trust. Such contribution to the provident fund for all employees, are charged to the Statement of Profit and Loss. In case of any liability arising due to shortfall between the return from its investments and the guaranteed specified interest rate, the same is provided for by the Company. The actuary has provided an actuarial valuation and the interest shortfall liability, if any, has been provided in the books of accounts after considering the assets available with the provident fund trust.

(iii) Risk exposure to defined benefit plans

The plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Indian government securities; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

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 benefit 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.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 31, 2023. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

423 Other Long Term Employee Benefits:

The liability for Compensated absences as determined by Independent actuary as at the balance sheet date is H18.00 crores (March 31, 2022: H16.62 crores).

43. FINANCIAL INSTRUMENTS AND RISK REVIEW 43.1 Capital Management

The Company''s objectives when managing capital are to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may return to shareholders the capital or issue new shares or take such appropriate action as may be needed. The Company considers total equity reported in the financial statements to be managed as part of capital. The Company does not have any borrowings as at March 31, 2023 and March 31, 2022.

(ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Ind AS. An explanation of each level follows underneath the table.

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded on the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3.

(iii) Valuation technique used to determine fair value

1. The fair value of the quoted investments is determined using quoted bid prices in an active market.

2. The fair value of the unquoted investments is determined using the inputs other than quoted prices included in level 1 that are observable for assets and liabilities.

3. Company has made investments in ''Ask Real Estate Special Situation Fund''. The Fund invests primarily in special purpose vehicles and holding companies of special purpose vehicles that undertake residential and mixed use real estate developments with a significant residential component. The Valuation methodology used shall depend on the type of property and market conditions and stage of development reached in the invested project. The suitability of a particular method of valuation is decided based on the below criteria:

- For undeveloped properties: Sales/Market Comparison Method benchmarked by Discounted Cash Flow Method

- For semi developed properties / properties under development: Weighted average of Discounted Cash Flow Method and Replacement Cost Method

- For completed properties, leased property or ready for sale properties: Capitalization of Rental Method or Market Comparison Method

(iv) Fair value of Financial assets and liabilities measured at amortised cost

The carrying amounts of cash and cash equivalents, trade receivables, receivables from related parties, trade payables and other financial liabilitites are considered to be the same as their fair values due to their short-term nature. Fair value of security deposits approximates the carrying value.

433 Financial Risk Management Objectives

The Company''s activities exposes it to a variety of financial risks including market risk, credit risk and liquidity risk. The Company''s primary risk management focus is to minimize potential adverse effects of financial risks on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and other price risk. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk including forward foreign exchange contracts.

a. Foreign exchange risk

(i) Exposure to foreign exchange risk:

The Company has international operations and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognised financial assets and liabilities denominated in a currency that is not the functional currency of the entity in the Company. The risk also includes highly probable foreign currency cash flows.

The Company has exposure arising out of export, import and other transactions other than functional risks. The Company hedges its foreign exchange risk using foreign exchange forward contracts. The same is within the guidelines laid down by Risk Management Policy of the Company.

(ii) Foreign exchange risk management:

To manage the foreign exchange risk arising from recognized assets and liabilities, Company use spot transactions, foreign exchange forward contracts, according to the Company''s foreign exchange risk policy. Company''s treasury is responsible for managing the net position in each foreign currency and for putting in place the appropriate hedging actions. The Company''s foreign exchange risk management policy is to selectively hedge net transaction exposures in major foreign currencies.

b. Other price risks

The Company is mainly exposed to the price risk due to its investments in equity instruments. The price risk arises due to uncertainties about the future market values of these investments. Equity price risk is related to the change in market reference price of the investments in equity securities. In general, these securities are not held for trading purposes. These investments are subject to changes in the market price of securities.

In order to manage its price risk arising from investments in equity instruments, the Company maintains its portfolio in accordance with the framework set by the Investment policy. Any new investment or divestment must be approved by the Board of Directors, Chief Financial Officer and Management Committee.

Price Risk Sensitivity Analysis:

As an estimation of the approximate impact of price risk, with respect to investments in equity instruments, the Company has calculated the impact as follows:

For equity instruments, a 10% increase in equity prices would have led to approximately an additional H0.23 crores gain in Statement of Profit and Loss (March 31, 2022: H0.27 crores). A 10% decrease in equity prices would have led to an equal but opposite effect.

43.5 Credit risk

(i) Exposures to credit risk

The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the Company. The credit risk arises from its operating activities (i.e. primarily trade receivables), from its investing activities including deposits with banks and financial institutions and other financial instruments.

(ii) Credit risk management

a) Trade receivable

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to H392.72 crores (March 31, 2022 - H352.11 crores).

Trade receivables are typically unsecured and are derived from revenue earned from customer. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account a continuing credit evaluation of the Company customers'' financial condition; ageing of trade accounts receivable and the Company''s historical loss experience.

Trade receivables are written off when there is no reasonable expectation of recovery. The allowance for lifetime expected credit loss on customer balances as at March 31, 2023 was H4.14 crores (March 31, 2022 H2.11 crores).

b Cash and Cash Equivalent

Credit risk on cash and cash equivalents is limited as Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c Investment in Mutual Funds

Credit risk on investments in mutual fund is limited as Company invested in mutual funds issued by the financial institutions with high credit ratings assigned by credit rating agencies.

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

(i) Liquidity risk tables

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2023 and March 31, 2022. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable liquid investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

44. SHARE BASED PAYMENTS

Details of the employee share based plan of the Company

Employee stock option scheme 2007 ("ESOS 2007") - The Shareholders of the Company at their Annual General Meeting held on July 20,2007 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of H2.00 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2007, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2007 shall be capable of being exercisable on vesting within 10 years from grant date.

44. SHARE BASED PAYMENTS (contd.)

Employee stock option scheme 2017 ("ESOS 2017") - The Shareholders of the Company at their Annual General Meeting held on June 29,2017 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company and its subsidiary companies to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of H2.00 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2017, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2017 shall be capable of being exercisable on vesting within 10 years from grant date.

Terms and Conditions:

1. Sales

The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. For the year ended March 31, 2023, the Company has not recorded any loss allowances for trade receivables from related parties.

2. Purchases

The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and at market rates.

3. Loan to Wholly Owned Subsidiary

Company had given interest free loan to Sulakshna Securities Limited (SSL) pursuant to the sanctioned scheme of rehabilitation. Amount lying as at March 31, 2023 is H 1.69 crores (March 31, 2022:H 7.49 crores). Under Ind AS 109 '' Financial Instruments'' the same has been fair valued. Accordingly, H 8.16 crores (March 31, 2022: H 8.16 crores) has been disclosed as Investment in equity of SSL and H 1.73 crores (March 31, 2022: H 6.93 crores) as loans to SSL as at March 31, 2023.

Company had given Inter Corporate Deposit to Navin Fluorine Advanced Sciences Limited (NFASL). Amount lying as at March 31, 2023 is H 176.00 crores (March 31, 2022: H 293.00 crores).

4. Guarantees to subsidiary and joint venture company

Guarantees provided to the lenders of the subsidiary and joint venture company are for availing term loans from the lender banks.

46. CAPITAL AND OTHER COMMITMENTS

Particulars

As at

March 31, 2023

As at

March 31, 2022

i. Capital commitments for Property, Plant and Equipment:

Estimated amount of contracts remaining to be executed on capital account and not provided for

90.56

24.05

ii. Other commitments:

Estimated amount of obligation on account of non-fulfillment of export commitments under various advance licenses

-

0.09

47. CONTINGENT LIABILITIES

Particulars

As at

March 31, 2023

As at

March 31, 2022

Claims against the Company not acknowledged as debts

a. Income tax matters

3.29

3.29

b. Excise duty matters

4.23

4.23

c. Sales-tax matters

0.87

0.87

d. Employee related matters

0.07

0.07

e. Goods and Service tax matters

0.83

-

f. Other Corporate guarantee / Bank guarantees

0.15

0.15

Note : It is not practicable for the Company to estimate the closure of these issues and the consequential timings of cash flows, if any, in respect of the above.

49. MafatlaL Industries Limited was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 199091, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer''s bankers had asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had claimed that the funds deposited with them in respect of the aforesaid project are subject to lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the sanctioned scheme of Mafatlal Industries Limited, continue to be carried forward and necessary adjustments would be made on the status of the project becoming clearer. (Refer note 12 and note 25)

50 . The Board of Directors has recommended final dividend of H 7.00 per share on the face value of H 2.00 each (350)% subject to approval by the Members at the forthcoming Annual General Meeting of the Company.

52 . The Company had made a strategic investment in its wholly owned subsidiary Manchester Organics Limited (MOL), in the U.K. MOL has been an integral part of the overall Contract Research and Manufacturing Services (CRAMS) operations and strategy of the Company. Based on management assessment, the investments in MOL and identified property, plant and equipment located at Dewas Unit has been considered as one Cash Generating Unit (CGU).

The Company tests impairment on the aforesaid assets on an annual basis. The recoverable amount of the CGU is determined based on value-in-use calculations which require the use of assumptions. The Management has assessed the impairment of its CGU by reviewing the business forecasts and assumptions and believes that any reasonable possible change in the key assumptions would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash - generating unit.

B. Additional regulatory information required by Schedule III

i Details of benami property held

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

ii Borrowing secured against current assets

The Company does not has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks and financial institutions are in agreement with the books of accounts

iii Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or any lender.

iv Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956

v Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

vi Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

vii Utilisation of borrowed funds and share premium

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

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

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

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

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

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

viii Undisclosed Income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

ix Details of crypto currency or virtual currency

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

x Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year

xi Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in notes 5A and 6 to the financial statements, are held in the name of the Company.

xii Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.


Mar 31, 2022

The company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the company considers information from a variety of sources including:

• current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences

• discounted cash flow projections based on reliable estimates of future cash flows

• capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.

The fair values of investment properties have been determined by independent valuer. The valuation is based on market research, market trend and comparable values as considered appropriate. All resulting fair value estimates for investment properties are included in level 3.

(b) Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of H 2.00 per share. Each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the company in proportion to the number of and amounts paid on the shares held.

(c) Information relating to Employee Stock Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 44.

Description of reserves:

Securities Premium - The Securities Premium was created on issue of shares at a premium. The reserve is utilised in accordance with the provisions of the Act.

General Reserve - The general reserve comprises of transfer of profits from retained earnings for appropriation purpose. The reserve can be distributed/utilised by the Company in accordance with the provisions of the Act.

Share Options Outstanding Account - The employee stock options outstanding represents reserve in respect of equity settled share options granted to the Group''s employees in pursuance of the employee stock option plan.

Description of reserves

Capital Reserve no. 1 - Capital reserve no. 1 was created for excess of assets over liabilities and reserves taken over pursuant to the scheme of demerger of chemical business of Mafatlal Industries Limited.

Capital Reserve no. 2 - Capital reserve no. 2 was created for compensation received pursuant to the Montreal Protocol for phasing out production of ozone depleting substances.

Capital Redemption Reserve - Capital redemption reserve was created out of the general reserve during the buy back of equity shares and it is a non-distributable reserves.

42.2 Defined Benefit Plans

(i) Risk exposure to defined benefit plans

The plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Indian government securities; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

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 benefit 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.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 31, 2022. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

(ii) Gratuity (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Company''s defined benefit gratuity plan requires contributions to be made to a separately administered trust. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. Company makes provision for gratuity fund based on an actuarial valuation carried out at the end of the year using ''projected unit credit'' method.

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

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

There was no change in the methods and assumptions used in preparing the sensitivity analysis from previous year.

(iii) Provident fund (funded)

In respect of certain employees, provident fund contributions are made to a separately administered trust. Such contribution to the provident fund for all employees, are charged to the Statement of Profit and Loss. In case of any liability arising due to shortfall between the return from its investments and the guaranteed specified interest rate, the same is provided for by the Company. The actuary has provided an actuarial valuation and the interest shortfall liability, if any, has been provided in the books of accounts after considering the assets available with the provident fund trust.

(a) The amount included in the balance sheet arising from the Company''s obligation in respect of its defined benefit plan (trust managed provident fund) is as follows:

The Company''s objectives when managing capital are to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may return to shareholders the capital or issue new shares or take such appropriate action as may be needed. The Company considers total equity reported in the financial statements to be managed as part of capital. The Company does not have any borrowings as at March 31, 2022 and March 31, 2021.

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded on the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3.

(iii) Valuation technique used to determine fair value

1. The fair value of the quoted investments is determined using quoted bid prices in an active market.

2. The fair value of the unquoted investments is determined using the inputs other than quoted prices included in level 1 that are observable for assets and liabilities.

3. Company has made investments in Ask Real Estate Special Situation Fund''. The Fund invests primarily in special purpose vehicles and holding companies of special purpose vehicles that undertake residential and mixed use real estate developments with a significant residential component. The Valuation methodology used shall depend on the type of property and market conditions and stage of development reached in the invested project. The suitability of a particular method of valuation is decided based on the below criteria:

- For undeveloped properties: Sales/Market Comparison Method benchmarked by Discounted Cash Flow Method

- For semi developed properties / properties under development: Weighted average of Discounted Cash Flow Method and Replacement Cost Method

- For completed properties, leased property or ready for sale properties: Capitalization of Rental Method or Market Comparison Method

(iv) Fair value of Financial assets and liabilities measured at amortised cost

The carrying amounts of cash and cash equivalents, trade receivables, receivables from related parties and trade payables are considered to be the same as their fair values due to their short-term nature. Fair value of security deposits approximates the carrying value.

43.3 Financial risk management objectives

The Company''s activities exposes it to a variety of financial risks including market risk, credit risk and liquidity risk. The Company''s primary risk management focus is to minimize potential adverse effects of financial risks on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

43.4 Market Risks

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and other price risk. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk including forward foreign exchange contracts.

43.5 Foreign exchange risk

(i) Exposure to foreign exchange risk:

The Company has international operations and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognised financial assets and liabilities denominated in a currency that is not the functional currency of the entity in the Company. The risk also includes highly probable foreign currency cash flows.

The Company has exposure arising out of export, import and other transactions other than functional risks. The Company hedges its foreign exchange risk using foreign exchange forward contracts. The same is within the guidelines laid down by Risk Management Policy of the Company.

(ii) Foreign exchange risk management:

To manage the foreign exchange risk arising from recognized assets and liabilities, Company use spot transactions, foreign exchange forward contracts, according to the Company''s foreign exchange risk policy. Company''s treasury is responsible for managing the net position in each foreign currency and for putting in place the appropriate hedging actions. The Company''s foreign exchange risk management policy is to selectively hedge net transaction exposures in major foreign currencies.

(iii) Foreign exchange risk sensitivity:

3% is the sensitivity rate used when reporting foreign currency risk and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding unhedged foreign currency denominated monetary items and adjusts their translation at the period end for a 3% change in foreign currency rates. A positive number below indicates an increase in profit and negative number below indicates a decrease in profit. Following is the analyze of change in profit where the Indian Rupee strengthens and weakens by 3% against the relevant currency:

43.6 Other price risks

The Company is mainly exposed to the price risk due to its investments in equity instruments. The price risk arises due to uncertainties about the future market values of these investments. Equity price risk is related to the change in market reference price of the investments in equity securities. In general, these securities are not held for trading purposes. These investments are subject to changes in the market price of securities.

In order to manage its price risk arising from investments in equity instruments, the Company maintains its portfolio in accordance with the framework set by the Investment policy. Any new investment or divestment must be approved by the Board of Directors, Chief Financial Officer and Management Committee.

Price Risk Sensitivity Analysis:

As an estimation of the approximate impact of price risk, with respect to investments in equity instruments, the Company has calculated the impact as follows:

For equity instruments, a 10% increase in equity prices would have led to approximately an additional H 0.27 crores gain in Statement of Profit and Loss (March 31, 2021: H 0.19 crores). A 10% decrease in equity prices would have led to an equal but opposite effect.

43.7 Credit risk

(i) Exposures to credit risk

The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the Company. The credit risk arises from its operating activities (i.e. primarily trade receivables), from its investing activities including deposits with banks and financial institutions and other financial instruments.

(ii) Credit risk management

a) Trade receivable

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to H 352.11 crores (March 31, 2021 - H 275.94 crores).

Trade receivables are typically unsecured and are derived from revenue earned from customer. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account a continuing credit evaluation of the Company customers'' financial condition; ageing of trade accounts receivable and the Company''s historical loss experience.

b) Cash and Cash Equivalent

Credit risk on cash and cash equivalents is limited as Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c) Investment in Mutual Funds

Credit risk on investments in mutual fund is limited as Company invested in mutual funds issued by the financial institutions with high credit ratings assigned by credit rating agencies.

43.8 Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

(i) Liquidity risk tables

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2022 and March 31, 2021. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable liquid investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

44. SHARE BASED PAYMENTS Amount H in crores unless otherwise stated

Details of the employee share based plan of the Company

Employee stock option scheme 2007 ("ESOS 2007") - The Shareholders of the Company at their Annual General Meeting held on July 20, 2007 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of H 2.00 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2007, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2007 shall be capable of being exercisable on vesting within 10 years from grant date.

Employee stock option scheme 2017 ("ESOS 2017") - The Shareholders of the Company at their Annual General Meeting held on June 29, 2017 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company and its subsidiary companies to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of H 2.00 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2017, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2017 shall be capable of being exercisable on vesting within 10 years from grant date.

(iv) No Stock options granted during the year.

(v) Expenses arising from employee share based payment transaction recognised in the Statement of Profit and Loss as part of employee benefit expense for the year ended March 31, 2022 is Nil (March 31, 2021: H 0.14 crores). Also refer note 34.

45. RELATED PARTY TRANSACTIONS

Following are the name and relationship of related parties with whom Company have transactions/ balances:

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

Sri Sadguru Seva Sangh Trust

b. Entity over which Company has joint control (i.e. joint venture)

Swarnim Gujarat Fluorspar Private Limited, India

Convergence Chemicals Private Limited, India (upto February 24, 2021)

1. Sales

The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. For the year ended March 31, 2022, the Company has not recorded any loss allowances for trade receivables from related parties.

2. Purchases

The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and at market rates.

3. Loan to Wholly Owned Subsidiary

Company had given interest free loan to Sulakshna Securities Limited (SSL) pursuant to the sanctioned scheme of rehabilitation. Amount lying as at March 31, 2022 is H 749 crores (March 31, 2021:H 8.24 crores). Under Ind AS 109 '' Financial Instruments'' the same has been fair valued. Accordingly, H 8.16 crores (March 31, 2021: H 8.16 crores) has been disclosed as Investment in equity of SSL and H 6.93 crores (March 31, 2021: H 7.09 crores) as loans to SSL as at March 31, 2022.

Company had given Inter Corporate Deposit to Navin Fluorine Advanced Sciences Limited (NFASL). Amount lying as at March 31, 2022 is H 293.00 crores (March 31, 2021: Nil).

4. Guarantees to subsidiary and joint venture company

Guarantees provided to the lenders of the subsidiary and joint venture company are for availing term loans from the lender banks.

49. MafatLaL Industries Limited was executing a project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of project work. In view of the post war sanctions imposed by the United Nations and the Government of India, suspended operations could not be resumed. The customer''s bankers had asked for extension of bank guarantees for advance payment and performance and the State Bank of India (SBI), in turn, had cLaimed that the funds deposited with them in respect of the aforesaid project are subject to Lien which was subsequently released on alternate arrangements. In view of the continuing uncertain circumstances, the receipts and payments under the contracts, transferred to the Company pursuant to the sanctioned scheme of Mafatlal Industries Limited, continue to be carried forward and necessary adjustments wouLd be made on the status of the project becoming clearer (Refer note 12 and note 25) .

50. EXCEPTIONAL ITEMS INCLUDE: Amount H in crores unless otherwise stated

(i) Gain of H 31.40 crores on account of sale of shares (net of incidental expenses) held in Convergence Chemicals Private Limited (''CCPL''), the Joint Venture Company, including gain for giving up lease rights in land related to financial year March 31, 2021, Current year : Nil

(ii) Gain of H 34.83 crores on account of giving up lease rights in land situated at Dahej to Navin Fluorine Advanced Sciences Limited, the wholly owned subsidiary of the Company related to financial year March 31, 2021, Current year : Nil

51. The Board of Directors has recommended final dividend of H 6.00 per share on the face value of H 2.00 each (300%), subject to approval by the Members at the forthcoming Annual General Meeting of the Company.

53. The Company had made a strategic investment in its wholly owned subsidiary Manchester Organics Limited (MOL), in the U.K. MOL has been an integral part of the overall Contract Research and Manufacturing Services (CRAMS) operations and strategy of the Company. Based on management assessment, the investments in MOL and identified property, plant and equipment located at Dewas Unit has been considered as one Cash Generating Unit (CGU).

The Company tests impairment on the aforesaid assets on an annual basis. The recoverable amount of the CGU is determined based on value-in-use calculations which require the use of assumptions. The Management has assessed the impairment of its CGU by reviewing the business forecasts and assumptions and believes that any reasonable possible change in the key assumptions would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash- generating unit.

56 ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III i. Details of benami property held

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

ii Borrowing secured against current assets

The company does not has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the company with banks and financial institutions are in agreement with the books of accounts.

iii Wilful defaulter

The company has not been declared wiifui defaulter by any bank or financial institution or any lender.

iv Relationship with struck off companies

The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956

v Compliance with number of layers of companies

The company has complied with the number of layers prescribed under the Companies Act, 2013.

vi Compliance with approved scheme(s) of arrangements

The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

vii Utilisation of borrowed funds and share premium

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

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

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

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

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

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

viii Undisclosed Income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

ix Details of crypto currency or virtual currency

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

x Valuation of PP&E, intangible asset and investment property

The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

56 ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III (contd.)xi Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in notes 5A and 6 to the financial statements, are held in the name of the company.

xii Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.


Mar 31, 2019

1. Corporate Information

Navin Fluorine International Limited ("the Company") is a public limited company, incorporated under the provisions of the Companies Act, 1956. Its registered office is located at 2nd floor, Sunteck Centre, 37/40, Subhash Road, Ville Parle (East), Mumbai 400057.

It''s shares are listed on the Bombay and National stock exchanges. The Company belongs to the Padmanabh Mafatlal Group, with a legacy of business operations since 1967, having one of the largest integrated fluorochemicals complex in India. The Company primarily focuses on fluorine chemistry - producing refrigeration gases, inorganic fluorides, specialty organofluorines and offers Contract Research and Manufacturing Services. Its manufacturing facilities are located at Surat in Gujarat and Dewas in Madhya Pradesh.

Notes:

1. Standby Letter of Credit facility amounting to RS.413.83 lakhs (March 31,2018 RS.2,952.83 lakhs) availed from HDFC Bank for loan taken by Subsidiary is being secured by Second charge on the property, plant and equipment of the Company.

2. In previous year, assets lying at Dahej unit sold on slump sale basis (refer note 49).

3. For details of Capital commitment relating to Property, Plant and Equipment (refer note 45).

2A. Capital work-in progress

Capital work-in progress as at March 31, 2019 is RS.3,932.96 lakhs (March 31,2018 RS.2,008.59 lakhs;). It is mainly comprises of expansion projects in progress.

The Company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. The fair value was determined based on the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data. All resulting fair value estimates for investment properties are included in Level 3.

(b) Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of RS.2.00 per share (refer note 39.1). Each equity shareholder is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the company in proportion to the number of and amounts paid on the shares held.

(c) Information relating to Employee Stock Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 43.

Description of reserves

Capital Reserve no. 1 - Capital reserve no. 1 was created for excess of assets over liabilities and reserves taken over pursuant to the scheme of demerger of chemical business of Mafatlal Industries Limited.

Capital Reserve no. 2 -Capital reserve no. 2 was created for compensation received pursuant to the Montreal Protocol for phasing out production of ozone depleting substances.

Capital redemption reserve - Capital redemption reserve was created out of the general reserve during the buy back of equity shares and it is a non-distributable reserves.

Securities premium - The Securities Premium was created on issue of shares at a premium. The reserve is utilised in accordance with the provisions of the Act.

General Reserve - The general reserve comprises of transfer of profits from retained earnings for appropriation purpose. The reserve can be distributed/utilised by the Company in accordance with the provisions of the Act.

Share options outstanding account - The employee stock options outstanding represents reserve in respect of equity settled share options granted to the Group''s employees in pursuance of the employee stock option plan.

Retained earnings - This represent the amount of accumulated earnings of the Company.

3. Segment Information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. Chairman and Managing Director of the Company are the chief operating decision makers. The Company operates only in one Business Segment i.e. ''Chemical Business'' which constitutes a single reporting segment.

3.1 At the 19th Annual General Meeting of the Company held on June 29, 2017, Members of the Company have passed Resolution approving sub-division of shares in the ratio of 5 Equity Shares of RS.2.00 each for every 1 Equity Share of H10.00 each. The record date for the aforesaid sub-division was July 20, 2017.

4. Leasing arrangement

4.1 The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancellable in nature and range between 11 months to 60 months. These leave and license agreements are generally renewable or cancellable at the option of the Company or the lessor. The lease payment recognised in the Statement of Profit and Loss is RS.438.56 lakhs (as at March 31, 2018 RS.461.42 lakhs).

4.2 Defined Benefit Plans

(i) Risk exposure to defined benefit plans

The plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Indian government securities; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk - A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

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 benefit 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.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 31, 2019. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

(ii) Gratuity (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Company''s defined benefit gratuity plan requires contributions to be made to a separately administered trust. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. Company makes provision for gratuity fund based on an actuarial valuation carried out at the end of the year using ''projected unit credit'' method.

(g) Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase and attrition rate. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. Following is the impact of changes in assumption in defined benefit obligation of gratuity:

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

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from previous year

(iii) Provident fund (funded)

In respect of certain employees, provident fund contributions are made to a separately administered trust. Such contribution to the provident fund for all employees, are charged to the Statement of Profit and Loss. In case of any liability arising due to shortfall between the return from its investments and the guaranteed specified interest rate, the same is provided for by the Company. The actuary has provided an actuarial valuation and the interest shortfall liability, if any, has been provided in the books of accounts after considering the assets available with the provident fund trust.

4.3 Other Long term Employee Benefits:

The liability for Compensated absences as determined by Independent actuary as at the balance sheet date is Rs.1,098.30 lakhs (March 31, 2018: Rs.1,083.45 lakhs).

5. Financial Instruments and Risk Review

5.1 Capital Management

The Company''s objectives when managing capital are to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may return to shareholders the capital or issue new shares or take such appropriate action as may be needed. The Company considers total equity reported in the financial statements to be managed as part of capital. The Company does not have any borrowings as at March 31, 2019 and March 31, 2018.

(ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on the observable market data, the instrument is included in Level 3.

(iii) Valuation technique used to determine fair value

1. The fair value of the quoted investments is determined using quoted bid prices in an active market.

2. The fair value of the unquoted investments is determined using the inputs other than quoted prices included in level 1 that are observable for assets and liabilities.

3. Company has made investments in ''Ask Real Estate Special Situation Fund''. The Fund invests primarily in special purpose vehicles and holding companies of special purpose vehicles that undertake residential and mixed use real estate developments with a significant residential component. The Valuation methodology used shall depend on the type of property and market conditions and stage of development reached in the invested project. The suitability of a particular method of valuation is decided based on the below criteria:

- For undeveloped properties: Sales/Market Comparison Method benchmarked by Discounted Cash Flow Method

- For semi developed properties / properties under development: Weighted average of Discounted Cash Flow Method and Replacement Cost Method

- For completed properties, leased property or ready For sale properties: Capitalization of Rental Method or Market Comparison Method

(iv) Fair value of Financial assets and liabilities measured at amortised cost

The carrying amounts of cash and cash equivalents, trade receivables, receivables from related parties and trade payables are considered to be the same as their fair values due to their short-term nature. Fair value of security deposits approximates the carrying value.

5.3 Financial risk management objectives

The Company''s activities exposes it to a variety of financial risks including market risk, credit risk and liquidity risk. The Company''s primary risk management focus is to minimize potential adverse effects of financial risks on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

5.4 Market Risks

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and other price risk. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk including forward foreign exchange contracts.

5.5 Foreign exchange risk

(i) Exposure to foreign exchange risk:

The Company has international operations and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognised financial assets and liabilities denominated in a currency that is not the functional currency of the entity in the Company. The risk also includes highly probable foreign currency cash flows. The Company has exposure arising out of export, import and other transactions other than functional risks. The Company hedges its foreign exchange risk using foreign exchange forward contracts. The same is within the guidelines laid down by Risk Management Policy of the Company.

(ii) Foreign exchange risk management:

To manage the foreign exchange risk arising from recognized assets and liabilities, Company use spot transactions, foreign exchange forward contracts, according to the Company''s foreign exchange risk policy. Company''s treasury is responsible for managing the net position in each foreign currency and for putting in place the appropriate hedging actions. The Company''s foreign exchange risk management policy is to selectively hedge net transaction exposures in major foreign currencies.

(iii) Foreign exchange risk sensitivity:

3% is the sensitivity rate used when reporting foreign currency risk and represents management''s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding unhedged foreign currency denominated monetary items and adjusts their translation at the period end for a 3% change in foreign currency rates. A positive number below indicates an increase in profit and negative number below indicates a decrease in profit. Following is the analyze of change in profit where the Indian Rupee strengthens and weakens by 3% against the relevant currency:

5.6 Other price risks

The Company is mainly exposed to the price risk due to its investments in equity instruments. The price risk arises due to uncertainties about the future market values of these investments. Equity price risk is related to the change in market reference price of the investments in equity securities. In general, these securities are not held for trading purposes. These investments are subject to changes in the market price of securities. In order to manage its price risk arising from investments in equity instruments, the Company maintains its portfolio in accordance with the framework set by the Investment policy. Any new investment or divestment must be approved by the Board of Directors, Chief Financial Officer and Management Committee.

Price Risk sensitivity Analysis:

As an estimation of the approximate impact of price risk, with respect to investments in equity instruments, the Company has calculated the impact as follows:

For equity instruments, a 10% increase in equity prices would have led to approximately an additional H101.39 lakhs gain in Statement of Profit and Loss (March 31, 2018: H537.03 lakhs). A 10% decrease in equity prices would have led to an equal but opposite effect.

5.7 Credit risk

(i) Exposures to credit risk

The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the Company. The credit risk arises from its operating activities (i.e. primarily trade receivables), from its investing activities including deposits with banks and financial institutions and other financial instruments.

(ii) Credit risk management

a) Trade receivable

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs.16,745.46 lakhs (March 31, 2018 - Rs.14,721.48 lakhs).

Trade receivables are typically unsecured and are derived from revenue earned from customer. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account a continuing credit evaluation of the Company customers'' financial condition; ageing of trade accounts receivable and the Company''s historical loss experience.

Trade receivables are written off when there is no reasonable expectation of recovery. The allowance for lifetime expected credit loss on customer balances as at March 31, 2019 was Rs.133.83 lakhs (March 31, 2018 - Rs.142.83 lakhs).

Movement in the credit loss allowance

b) Cash and Cash Equivalent

Credit risk on cash and cash equivalents is limited as Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c) Investment in Mutual Funds

Credit risk on investments in mutual fund is limited as Company invested in mutual funds issued by the financial institutions with high credit ratings assigned by credit rating agencies.

5.8 Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

(i) Liquidity risk tables

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2019 and March 31, 2018. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable liquid investments with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

(ii) Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

6. Share based payments

Details of the employee share based plan of the Company

Employee stock option scheme 2007 (“Esos 2007”) - The Shareholders of the Company at their Annual General Meeting held on July 20,2007 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of RS.2.00 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2007, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2007 shall be capable of being exercisable on vesting within 10 years from grant date.

Employee stock option scheme 2017 (“Esos 2017”) - The Shareholders of the Company at their Annual General Meeting held on June 29,2017 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company and its subsidiary companies to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of RS.2.00 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2017, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2017 shall be capable of being exercisable on vesting within 10 years from grant date.

(v) Expenses arising from employee share based payment transaction recognised in the Statement of Profit and Loss as part of employee benefit expense for the year ended March 31, 2019 is H83.66 lakhs (March 31, 2018 H64.02 lakhs). Also refer note 33.

Terms and Condition:

1. sales

The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. For the year ended March 31, 2019, the Company has not recorded any loss allowances for trade receivables from related parties.

2. Purchases

The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and at market rates.

3. Loan to Wholly Owned subsidiary

Company had give interest free loan to Sulakshna Securities Limited (SSL) pursuant to the sanctioned scheme of rehabilitation. Amount lying as at March 31, 2019 is Rs.1,423.00 lakhs (March 31, 2018: Rs.1,669.00 lakhs). Under Ind AS 109 '' Financial Instruments'' the same has been fair valued. Accordingly, Rs.815.55 lakhs (March 31, 2018: Rs.815.55 lakhs) has been disclosed as Investment in equity of SSL and Rs.1,110.39 lakhs (March 31, 2018: Rs.1,049.16 lakhs) as loans to SSL as at March 31, 2019.

4. Loan to Joint Venture Company

The Company has given loan to Convergence Chemicals Private Limited (CCPL) for working capital requirement. The loan balances as at March 31, 2019 was RS.325.00 lakhs (March 31, 2018 was RS.325.00 lakhs. These loans are unsecured and carry an interest rate of 10.50% (March 31, 2018: 14%) and repayable on demand.

5. Guarantees to subsidiary and joint venture company

Guarantees provided to the lenders of the subsidiary and joint venture company are for availing term loans from the lender banks.

7. Contingent liabilities

(ii) . The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of''Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management which is supported by legal advice, the aforesaid matter is not likely to have a significant impact and accordingly, no provision has been made in these Financial Statements.

8. Research and development expenditure

The details of research and development expenditure of Rs.1,920.82 lakhs (as at March 31, 2018 Rs.1,787.68 lakhs) included in the figures reported under notes 5 and 31 to 36 are as under:

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

10. In previous year, the Company''s business relating to manufacture and sale of Specialty Fluorochemicals at Dahej was transferred to Convergence Chemicals Private Limited, a joint venture between the Company and Piramal Enterprise Limited, with effect from December 1, 2017, on a going concern basis by way of slump sales together with all the identified assets, liabilities, consents, permissions, services of employees etc. Revenue from operations of this Business till November 30, 2017 was Rs.5,568.28 lakhs, which were included in the Statement of Profit and Loss.

11 . The Board of Directors has recommended final dividend of RS.4.00 per share on the face value of RS.2.00 each (200%), subject to approval by the Members at the forthcoming Annual General Meeting of the Company.

12 . With effect from 1st April, 2018 company has adopted Ind AS 115 - Revenue from Contracts with Customers which resulted adjustments to the amounts recognized in the financial statements in the form of reclassification. In accordance with the transition provisions in the Ind AS 115, the company has adopted the modified retrospective method. Accordingly, comparative information for prior period has not been restated.

Presentation of assets and liabilities related to contracts with customers:

The company has also voluntarily changed the presentation of certain amount in the balance sheet to reflect the terminology of Ind AS 115: Contract liabilities in relation to contracts for sale of good and services which were included in the other current liabilities RS.345.76 lakhs. Contract Liabilities represents advance received against sale of goods or services

13 . Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classifications / disclosures.


Mar 31, 2018

1. SEGMENT INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company. Chairman and Managing Director of the Company are the chief operating decision makers. The Company operates only in one Business Segment i.e. ''Chemical Business'' which constitutes a single reporting segment.

@ Excluding financial assets.

Note: Considering the nature of business of the Company in which it operates, the Company deals with various customers. Consequently, none of the customer contributes materially to the revenue of the Company.

40.1 At the 19th Annual General Meeting of the Company held on June 29, 2017, Members of the Company have passed Resolution approving sub-division of shares in the ratio of 5 Equity Shares of H 2 each for every 1 Equity Share of H 10 each. The record date for the aforesaid sub-division was July 20, 2017. Consequently, the basic and diluted earnings per share have been adjusted for the sub-division of shares for the year ended March 31, 2017 in accordance with the provisions of Ind AS 33, ''Earnings per Share.

2. LEASING ARRANGEMENT

41.1 The Company has taken office, residential premises and vehicles under operating lease or leave and license agreements. These are generally cancellable in nature and range between 11 months to 60 months. These leave and license agreements are generally renewable or cancelable at the option of the Company or the lessor. The lease payment recognized in the Statement of Profit and Loss is RS, 461.42 lakhs (as at March 31, 2017 H 382.08 lakhs).

42.2 Defined Benefit Plans

(i) Risk exposure to defined benefit plans

The plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment risk The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Indian government securities; if the return on plan asset is below this rate, it will create a plan deficit.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

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 benefit 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.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 31, 2018. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

(ii) Gratuity (Funded)

The Company sponsors funded defined benefit gratuity plan for all eligible employees of the Company. The Company''s defined benefit gratuity plan requires contributions to be made to a separately administered trust. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. Company makes provision for gratuity fund based on an actuarial valuation carried out at the end of the year using ''projected unit credit'' method.

(a) Principal assumptions

The principal assumptions used for the purposes of the actuarial valuations of gratuity liability were as follows.

(g) Sensitivity analysis:

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase and attrition rate. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. Following is the impact of changes in assumption in defined benefit obligation of gratuity:

in ak''hc''i

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

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

(iii) Provident fund (funded)

In respect of certain employees, provident fund contributions are made to a separately administered trust. Such contribution to the provident fund for all employees, are charged to the Statement of Profit and Loss. In case of any liability arising due to shortfall between the return from its investments and the guaranteed specified interest rate, the same is provided for by the Company. The actuary has provided an actuarial valuation and the interest shortfall liability, if any, has been provided in the books of accounts after considering the assets available with the provident fund trust.

42.3 Other Long term Employee Benefits:

The liability for Compensated absences as determined by Independent actuary as at the balance sheet date is RS, 1,083.45 lakhs (March 31, 2017: RS, 912.85 lakhs: April 1, 2016: RS, 767.75 lakhs).

3. FINANCIAL INSTRUMENTS AND RISK REVIEW

43.1 Capital Management

The Company''s objectives when managing capital are to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may return to shareholders the capital or issue new shares or take such appropriate action as may be

(ii) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(iii) Valuation technique used to determine fair value

1. The fair value of the quoted investments is determined using quoted bid prices in an active market.

2. The fair value of the unquoted investments is determined using the inputs other than quoted prices included in level 1 that are observable for assets and liabilities.

3. Company has made investments in ''Ask Real Estate Special Situation Fund. The aforesaid Fund has been set up to invest in various projects, however, the Fund currently is in start up phase. Hence, based on management assessment, the fair value of such investment is not materially different from its carrying value.

(iv) Fair value of Financial assets and liabilities measured at amortized cost

The carrying amounts of cash and cash equivalents, trade receivables, receivables from related parties and trade payables are considered to be the same as their fair values due to their short-term nature. Fair value of security deposits approximates the carrying value.

43.3 Financial risk management objectives

The Company''s activities exposes it to a variety of financial risks including market risk, credit risk and liquidity risk. The Company''s primary risk management focus is to minimize potential adverse effects of financial risks on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

43.4 Market Risks

The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and other price risk. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk including forward foreign exchange contracts.

43.5 Foreign exchange risk

(i) Exposure to foreign exchange risk:

The Company has international operations and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognized financial assets and liabilities denominated in a currency that is not the functional currency of the entity in the Company. The risk also includes highly probable foreign currency cash flows.

The Company has exposure arising out of export, import and other transactions other than functional risks. The Company hedges its foreign exchange risk using foreign exchange forward contracts. The same is within the guidelines laid down by Risk Management Policy of the Company.

(ii) Foreign exchange risk management:

To manage the foreign exchange risk arising from recognized assets and liabilities, Company use spot transactions, foreign exchange forward contracts, according to the Company''s foreign exchange risk policy. Company''s treasury is responsible for managing the net position in each foreign currency and for putting in place the appropriate hedging actions. The Company''s foreign exchange risk management policy is to selectively hedge net transaction exposures in major foreign currencies.

The carrying amounts of the Company''s unheeded foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

43.6 Other price risks

The Company is mainly exposed to the price risk due to its investments in equity instruments. The price risk arises due to uncertainties about the future market values of these investments. Equity price risk is related to the change in market reference price of the investments in equity securities. In general, these securities are not held for trading purposes. These investments are subject to changes in the market price of securities.

In order to manage its price risk arising from investments in equity instruments, the Company maintains its portfolio in accordance with the framework set by the Investment policy. Any new investment or divestment must be approved by the Board of Directors, Chief Financial Officer and Management Committee.

Price Risk Sensitivity Analysis:

As an estimation of the approximate impact of price risk, with respect to investments in equity instruments, the Company has calculated the impact as follows:

For equity instruments, a 10% increase in equity prices would have led to approximately an additional RS,537.03 lakhs gain in Statement of Profit and Loss (March 31, 2017: RS,632.01 lakhs). A 10% decrease in equity prices would have led to an equal but opposite effect.

43.7 Credit risk

(i) Exposures to credit risk

The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the Company. The credit risk arises from its operating activities (i.e. primarily trade receivables), from its investing activities including deposits with banks and financial institutions and other financial instruments.

(ii) Credit risk management

a) Trade receivable

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to RS,14,721.48 lakhs (March 31, 2017 - RS, 13,032.58 lakhs April 1, 2016 - RS, 13,989.44 lakhs).

Trade receivables are typically unsecured and are derived from revenue earned from customer Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account a continuing credit evaluation of our customers'' financial condition; ageing of trade accounts receivable and the Company''s historical loss experience.

Trade receivables are written off when there is no reasonable expectation of recovery. The allowance for lifetime expected credit loss on customer balances as at March 31, 2018 was RS, 142.83 lakRs,s (RS, 77.31 lakhs as at March 31, 2017;RS, 90.49 lakhs as at April 1, 2016).

b) Cash and Cash Equivalent

Credit risk on cash and cash equivalents is limited as Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

c) Investment in Mutual Funds

Credit risk on investments in mutual fund is limited as Company invested in mutual funds issued by the financial institutions with high credit ratings assigned by credit rating agencies.

43.8 Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses..

(i) Liquidity risk tables

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2018 and March 31, 2017. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable liquid investments with appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

(ii) Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. (RS, in lakhs)

4. SHARE BASED PAYMENTS

Details of the employee share based plan of the Company

Employee stock option scheme 2007 ("ESOS 2007") - The Shareholders of the Company at their Annual General Meeting held on July 20,2007 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of H 2 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2007, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2007 shall be capable of being exercisable on vesting within 10 years from grant date.

Employee stock option scheme 2017 ("ESOS 2017") - The Shareholders of the Company at their Annual General Meeting held on June 29,2017 had approved the issue of Stock Options to eligible employees and directors, including the Managing Director(s) and the Whole Time Director(s) but excluding the promoters or persons belonging to the promoter group of the Company and its subsidairy companies to the extent maximum of 5% of issued and paid up share capital of the Company from time to time. Each option is exercisable into one fully paid-up Equity Shares of H 2 each of the Company. These options are to be issued in one or more tranches and on such terms and conditions (including exercise price, vesting period, exercise period etc.) as may be determined by the Nomination and Remuneration Committee (NRC) in accordance with the provisions of the ESOS 2017, SEBI Regulations and in compliance with other applicable laws and regulations. The stock options granted under ESOS 2017 shall be capable of being exercisable on vesting within 10 years from grant date.

5. RELATED PARTY TRANSACTIONS

Following are the name and relationship of related parties with which Company have transactions/ balances:

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

Mafatlal Industries Limited (up to August 19, 2016)

NOCIL Limited (up to August 19, 2016)

Arvind Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Seth Navinchandra Mafatlal Foundation Trust

b. Entity over which Company has joint control (i.e. joint venture)

Swarnim Gujarat Fluorspar Private Limited, India Convergence Chemicals Private Limited, India

c. Entities over which Company has control

(i) Subsidiaries:

Sulakshana Securities Limited, India Manchester Organics Limited, United Kingdom Navin Fluorine (Shanghai) Co. Limited, China NFIL (UK) Limited, United Kingdom

(ii) Step-down Subsidiaries:

NFIL USA, Inc., United State of America

d. Associate:

Urvija Associates, India - a partnership firm where the Company is a partner

e. Key Management personnel

Shri Hrishikesh A. Mafatlal (upto August 19, 2016)

Shri Vishad P Mafatlal (Executive Director w.e.f. August 19, 2016)

Shri Shekhar S. Khanolkar - Managing Director Shri T.M.M. Nambiar - Independent Non-Executive Director Shri P.N.Kapadia - Independent Non-Executive Director Shri S.S.Lalbhai - Independent Non-Executive Director Shri S.M.Kulkarni - Independent Non-Executive Director Shri S.G.Mankad - Independent Non-Executive Director Shri H.H.Engineer - Independent Non-Executive Director Shri A.K.Srivastava - Independent Non-Executive Director Smt R.V.Haribhakti - Independent Non- Executive Director

Terms and Condition:

1. Sales

The sales to related parties are in the ordinary course of business. Sales transactions are based on prevailing price lists. For the year ended March 31, 2018, the Company has not recorded any loss allowances for trade receivables from related parties.

2. Purchases

The purchases from related parties are in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and at market rates.

3. Loan to Wholly Owned Subsidiary

Company had give interest free loan to Sulakshna Securities Limited (SSL) pursuant to the sanctioned scheme of rehabilitation. Amount lying as at March 31, 2018 is RS, 1,669.00 lakhs (March 31, 2017:RS, 1,905.00 lakhs; March 31, 2016: RS, 2,010.00 lakhs). Under Ind AS 109 '' Financial Instruments'' the same has been fair valued. Accordingly, RS, 815.55 lakhs has been disclosed as Investment in equity of SSL and RS, 1,049.16 lakhs as loans to SSL as at March 31, 2018 (March 31, 2017: RS, 815.55 lakhs and RS,1188.68; April 1, 2016: RS, 815.55 lakhs and RS,1,202.84 lakhs).

4. Loan to Joint Venture Company

The Company has given loan to Convergence Chemicals Private Limited (CCPL) for working capital requirement. The loan balances as at March 31, 2018 was RS, 325.00 lakhs.These loans are unsecured and carry an interest rate of 14% and repayable on demand.

5. Guarantees to subsidiary and joint venture company

Guarantees provided to the lenders of the subsidiary and joint venture company are for availing term loans from the lender banks.

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

50. The Company''s business relating to manufacture and sale of Specialty Fluorochemicals at Dahej was transferred to Convergence Chemicals Private Limited, a joint venture between the Company and Piramal Enterprise Limited, with effect from December 1, 2017, on a going concern basis by way of slump sales together with all the identified assets, liabilities, consents, permissions, services of employees etc. Revenue from operations of this Business till November 30, 2017 was RS, 5,568.28 lakhs, which are included in the Statement of Profit and Loss.

7 FIRST-TIME ADOPTION OF IND-AS

This is the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet as at April 1, 2016 (the date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the company''s financial position, financial performance and cash flows is set out in the following tables and notes..

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

Ind AS Optional exemptions (i) Business Combination

The Company has elected not to apply Ind AS 103 Business Combinations retrospectively for all the business combinations occurred before the transition date i.e. April 1, 2016.

(ii) Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment, Intangible assets and investment properties as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment properties at their previous GAAP carrying value.

(iii) Investments in subsidiary companies and joint venture companies

Ind AS 101 permits a first-time adopter to measure it''s investment, at the date of transition, at cost determined in accordance with Ind AS 27, or deemed cost. The deemed cost of such investment shall be it''s fair value at date of transition to Ind AS of the Company, or previous GAAP carrying amount at that date. The Company has elected to measure its investment in subsidiary companies, associate company and joint venture companies at previous GAAP carrying amount as its deemed cost on the transition date except for one subsidiary company which is measured at fair value at the date of transition to Ind AS.

(iv) Share-based payments

The Company has elected not to apply Ind AS 102 Share-Based Payment, to equity instruments that vested prior to the date of transition to Ind AS.

Ind AS mandatory exception (i) Estimates

The entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Upon an assessment of the estimates made under previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by previous GAAP.

(ii) Classification and measurement of financial asset

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of facts and circumstances that exist at the date of transition to Ind AS.

Note: Total comprehensive income was not reported under previous GAAP. Therefore the reconciliation starts with net profit under previous GAAP.

51.3 Effect of Ind AS adoption on the statement of cash flows for the year ended March 31, 2017:

There is no changes in net cash flow from each activity i.e. operating, investing and financing on account of application of Ind AS.

Notes to Reconciliation A. Fair valuation of investments in Equity instruments and mutual funds

Under previous GAAP, investments in equity instruments and mutual funds were classified as non-current investments or current investments based on the intended holding period and realisability. Non-current investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, Fair value changes with respect to investments in equity instruments/mutual funds have been recognized in retained earnings as at the date of transition and subsequently in the Statement of Profit and Loss.

B. Fair valuation of investments in subsidiaries

The Company has considered fair value of an investment in a subsidiary as its deemed cost as at transition date. This has resulted in reduction of equity and investments by RS, 113.92 lakhs as at April 1, 2016.

C. Forward Exchange Forward Contracts

Under previous GAAP, foreign currency forward contract has been accounted by amortizing the forward premium/ discount. Under

Ind AS, these derivative instruments are measured at fair value at each reporting date with changes in the fair value is recognized in the Statement of Profit and Loss.

D. Security Deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value on initial recognition. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent.

E. Proposed dividend

Under previous GAAP, dividends proposed by the Board of Directors after the Balance Sheet date, but before the approval of the Financial Statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the Shareholders in the General Meeting.

F. Employee stock option expense

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognized using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognized based on the fair value of the options as at the grant date.

G. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements that is actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in Other Comprehensive Income instead of Statement of Profit or Loss. Under previous GAAP, these remeasurements were forming part of the Statement of Profit and Loss for the year.

H. Loan to wholly owned subsidiary

Under previous GAAP, loans given to wholly owned subsidiary were long-term in nature and measured at cost. Ind AS 109 ''Financial Instruments'' requires all financial instruments to be measured on initial recognition at fair value. On initial recognition the fair value of loans to wholly owned subsidiary has been estimated by discounting the future loan repayments using the rate the borrower may pay to an unrelated lender for a loan. Accordingly, the difference between the transaction amount and its fair value at the date of transaction has been recorded as an investment in equity of the related entity. Subsequently, the loan is measured at amortized cost using effective interest rate method at each balance sheet date.

I. Deferred tax

Current tax/Deferred tax have been recognized on the adjustments made on transition to Ind AS. MAT credit entitlement as per previous GAAP is reclassified under deferred tax assets.

Other explanatory notes not impacting total equity or profit Other Comprehensive Income

Under Ind AS, all items of income and expense recognized in a period should be included in the Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in the Statement of Profit and Loss but are shown in the Profit and Loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on face of the Statement of Profit and Loss.

Discounts and Commission

Under the previous GAAP, cash discount and other trade offers and incentives were forming part of other expenses. Under Ind AS, the same has been netted off against revenue.

8. The Board of Directors has recommended final dividend of Rs, 3.60 per share of the face value of Rs, 2/- each (180%) and a special dividend of Rs, 3.00 per share of the face value of Rs, 2/- each (150%), on completion of 50 years of business, subject to approval by the members at the forthcoming Annual general Meeting of the Company.

9. The Ministry of Corporate Affairs (MCA) in its notification dated March 30, 2017 amended Schedule III to the Companies Act, requiring companies to provide the following disclosure in the financial statements in respect of Specified Bank Notes (SBN) held and transacted during the period November 8, 2016 to December 30, 2016:

10. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classifications / disclosures


Mar 31, 2017

NOTE 1.

The Company received RS, 192.90 lacs (as at 31st March, 2016 RS, 260.07 lacs) during the year from its wholly owned subsidiary Sulakshana Securities Limited (SSL), towards partial repayment of interest free advances provided in earlier years. The market value of the assets of SSL far exceeds the outstanding advance to SSL of RS, 1,906.00 lacs (as at 31st March, 2016 RS, 2,010.00 lacs) at the year end.

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

Note: Figures in parentheses are for the previous year.

b. Net exchange difference in respect of forward contracts to be credited - debited in subsequent accounting year amounts to credit RS, 9.94 lacs (as at 31st March, 2016, debit RS, 6.86 lacs).

NOTE| 2 JOINT VENTURE COMPANIES (JVC)

1. The Company has a Joint venture interest of 49.43% in Swarnim Gujarat Fluorspar Private Limited., a company incorporated under the Companies Act, 1956 on 19th June, 2012. As on 31st March, 2017 the Company has invested a sum of RS, 108.25 lacs (as at 31st March, 2016 RS, 108.25 lacs) in the share capital of this Joint venture.

The JVC is engaged in the business of manufacture of Acid Grade Fluorspar and allied activities.

a) The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st March, 2017 are as under:

b) The Company''s share of capital commitments in the JVC as at 31st March, 2017 is Nil.

c) The Company''s share of contingent liability of the JVC as at 31st March, 2017 is Nil.

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

2. The Company has a Joint venture interest of 49% in Convergence Chemicals Private Limited., a company incorporated under the Companies Act, 2013 on 19th November, 2014. As on 31st March, 2017 the Company has invested a sum of RS, 3,430.49 lacs (as at 31st March, 2016 RS, 3,430.49 lacs) in the share capital of this Joint venture.

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

a) The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st March, 2017 are as under:

b) The Company''s share of capital commitments in the JVC as at 31st March, 2017 is RS, 1.40 lacs.

c) The Company''s share of contingent liability of the JVC as at 31st March, 2017 is Nil.

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

NOTE| 3

As part of an agreement executed amongst Shri H. A. Mafatlal, Shri V. P. Mafatlal, their family members, family trusts & companies including the three listed entities, viz. the Company, Mafatlal Industries Ltd and NOCIL Ltd and approved by the Board of Directors on 6th August 2016, the Company has divested part of its shareholding in Mafatlal Industries Ltd and in NOCIL Ltd during the year. The profit arising out of divestment of such Long Term investments amounting to RS, 2,733.18 lacs has been shown under "Exceptional Items" in the Statement of Profit and Loss.

note 4

The Ministry of Corporate Affairs (MCA) in its notification dated 30th March, 2017 amended Schedule III to the Companies Act, requiring companies to provide the following disclosure in the financial statements in respect of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th December, 2016:

note 5 related party transactions

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

Mafatlal Industries Limited (up to 19th August, 2016)

NOCIL Limited (up to 19th August, 2016)

Arvind Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Seth Navinchandra Mafatlal Foundation Trust

Joint Ventures

Swarnim Gujarat Fluorspar Private Limited Convergence Chemicals Private Limited

Names of related parties where control exists

Sulakshana Securities Limited - subsidiary company

Urvija Associates - a partnership firm where the Company is a majority partner Manchester Organics Limited - subsidiary company Navin Fluorine (Shanghai) Co. Ltd - subsidiary company NFIL (UK) Ltd - subsidiary company

Key management personnel

Shri Hrishikesh A. Mafatlal (in the capacity of an individual / trustee) (up to 19th August, 2016)

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

Shri Atul K. Srivastava (up to 30th April, 2015)

Shri Shekhar S. Khanolkar


Mar 31, 2016

In respect of gratuity (funded):

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

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

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

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

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

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

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

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

NOTE 1.

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

NOTE 2.

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

NOTE 3. MICRO, SMALL AND MEDIUM SCALE BUSINESS ENTITIES

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

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

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

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

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

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

(a) The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st March, 2016 are as under:

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

The JVC is engaged in the business of manufacture of Acid Grade Fluorspar and allied activities.

(a) The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31st March, 2016 are as under:

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

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

NOTE 4. RELATED PARTY TRANSACTIONS

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

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Joint Ventures

Swarnim Gujarat Fluorspar Private Limited Convergence Chemicals Private Limited

Names of related parties where control exists

Sulakshana Securities Limited – subsidiary company

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

Manchester Organics Limited – subsidiary company

Navin Fluorine (Shanghai) Co. Limited - subsidiary company

NFIL (UK) Limited - subsidiary company

Key management personnel

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


Mar 31, 2015

Terms / rights attached to equity shares:

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

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

Note 1 corporate information

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

NOTE 2 EMPLOYEE BENEFITS

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

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

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

NOTE 3 EMPLOYEE STOCk OPTION SCHEME

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

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

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

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

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

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

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

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

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

NOTE 4 LEASE

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

NOTE 5

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

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

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

NOTE 6

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

NOTE 7 CONTINGENT LIABILITIES

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

a. Excise matters disputed in appeal

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

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

c. Sales-tax matters disputed in appeal

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

d. Income tax matters disputed in appeal 721.02 721.02

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

NOTE 8 JOINT VENTURE COMPANIES (JVC)

1. The Company has a Joint venture interest of 49.43 % in Swarnim Gujarat Flourspar Private Limited., a Company incorporated under the Companies Act, 1956 on 19 June, 2012. As on 31 March, 2015 the Company has invested a sum of Rs. 107.00 lacs (previous year Rs. 1.25 lacs) in the share capital of this Joint venture.

The JVC is engaged in the business of manufacture of acid grade fluorspar and allied activities.

a) The Company''s share of capital commitments in the JVC as at 31 March, 2015 is Rs. Nil.

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

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

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

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

a) The Company''s share of each of the assets, liabilities, income and expenses etc. (each, without elimination of the effect of the transactions between the Company and the JVC) related to its interest in this JVC, based on the audited accounts for the year ended 31 March, 2015 are as under:

NOTE 9 RELATED PARTY TRANSACTIONS

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

Mafatlal Industries Limited Mafatlal Fabrics Private Limited NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust Sri Sadguru Seva Sangh Trust

Joint Ventures

Swarnim Gujarat Fluorspar Private Limited Convergence Chemicals Private Limited

NOTE 9 RELATED PARTY TRANSACTIONS (Contd.)

Names of related parties where control exists

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

Key management personnel

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

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

Shri Atul K. Srivastava Shri Shekhar S. Khanolkar


Mar 31, 2014

NOTE 1. EMPLOYEE BENEFITS

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

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

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

NOTE 2. Employee STOCK OPTION SCHEME

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

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

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

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

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

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

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

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

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

NOTE 3. LEASE

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

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

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

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

NOTE 4.

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

NOTE 5. CONTINGENT LIABILITIES

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

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

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

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

d. Income tax matters disputed in appeal 721.02 805.61

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

NOTE 6. DERIVATIVE INSTRUMENTS

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

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

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

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

NOTE 7.

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

NOTE 8. RELATED PARTY TRANSACTIONS

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

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Joint Venture

Swarnim Gujarat Fluorspar Private Limited

Names of related parties where control exists

Sulakshana Securities Limited – subsidiary company

Manchester Organics Limited– subsidiary company

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

Key management personnel

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

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

Shri Atul K. Srivastava

Shri Shekhar S. Khanolkar

NOTE 9.

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


Mar 31, 2013

CORPORATE INFORMATION

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

a. Terms / rights attached to equity shares:

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

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

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

NOTE 1 EARNINGS PER SHARE (EPS)

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

NOTE 2 EMPLOYEE BENEFITS

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

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

NOTE 3 EMPLOYEE STOCK OPTION SCHEME

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

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

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

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

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

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

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

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

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

NOTE 4 LEASES

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

NOTES

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

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

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

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

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

NOTE 5

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

NOTE 6 DERIVATIVE INSTRUMENTS

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

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

NOTE 7

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

NOTE 8

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

NOTES 9

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

NOTE 10 RELATED PARTY TRANSACTIONS

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

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Seth Navinchandra Mafatlal Foundation Trust

Sri Sadguru Seva Sangh Trust

Associate

Mafatlal Denim Limited (Refer note 43)

Joint Venture

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

Names of related parties where control exists

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

Key management personnel

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

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

2. Associate

3. Joint Venture

4. Related parties where control exists

5. Key management personnel

Notes,

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

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

NOTE 11

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


Mar 31, 2012

01. CORPORATE INFORMATION

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

Notes 03 SHARE CAPITAL

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

Notes]3-EMPLOYEE BENEFITS:

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

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

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

Notes]31[EMPLOYEE STOCK OPTION SCHEME:

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

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

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

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

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

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

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

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

Notes LEASES

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

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

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

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

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

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

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

Notes] 35

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

Notes]3 CONTINGENT LIABILITIES

(Rupees in lacs

As at As at

31st March, 2012 31st March, 2011

In respect of:

a. Excise matters disputed in appeal

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

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

b. Claims against the Company not acknowledged as debts

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

c. Sales-tax matters disputed in appeal

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

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

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

Notes]3 DERIVATIVE INSTRUMENTS

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

Notes]4 RELATED PARTY TRANSACTIONS

Names of related parties where control exists

Sulakshana Securities Limited - subsidiary company

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

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

Key management personnel

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

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

Shri Atul K. Srivastava

Shri Satish D. Kakade (upto 31.12.2010)

Shri Shekhar S. Khanolkar

Associate

Mafatlal Denim Limited

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

Mafatlal Industries Limited Mafatlal Fabrics Private Limited NOCIL Limited

Sunland Industrial Machinery Limited Seth Navinchandra Mafatlal Foundation Trust

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

2. Associate

3. Related parties where control exists

4. Key management personnel Notes

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

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


Mar 31, 2011

(Rupees in lacs)

As at As at 31st March, 2011 31st March, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for 767.80 770.37

2. Contingent liabilities in respect of:

a. Excise matters disputed in appeal These relate to MODVAT on capital purchases (pending before the Assistant Commissioner) and permit fee on purchase of alcohol (pending before the High Court) 158.42 91.48

b. Claims against the Company not acknowledged as debts Labour matters involving issues like regularisation of employment, termination of employment, compensation against severance, etc. 22.34 23.34

c. Sales-tax matters disputed in appeal These relate to classification of goods and consequent dispute on the rates of sales-tax (pending at various stages from Assistant Commissioner to High Court) 209.42 207.14

d. Income tax matters disputed in appeal 629.17 606.81

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

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

i) the Chemical Division of MIL was demerged and vested in the Company with effect from 1st March, 2002 as a going concern.;

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

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

i) As at the year end, the aggregate value of interest free monies advanced to and debentures issued on behalf of SSL by the company is Rs. 2,799.07 lacs (previous year Rs. 2,794.07 lacs). The market value of the assets remaining in SSL after repayment of the liabilities taken over from MIL far exceeds the value owed by SSL

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

4. The Company decided to assist MIL in its rehabilitation efforts in view of its substantial investment in MILs shares and has from time to time taken several steps which, broadly are as follows:

a) Advanced monies to a group company aggregating to Rs. 2,594.82 lacs (previous year Rs. 2,412.48 lacs) including interest, at year end to enable the settlement of loan liabilities of MIL.

b) Taken over loan liabilities of MIL of Rs. 6,534.12 lacs, which aggregate to a value of Rs 3,372.49 lacs (previous year Rs. 3,015.99 lacs) at year end.

The net worth of MIL has turned positive based on their accounts as on 31st May, 2010 and consequently it has been deregistered from BIFR. The settlement of the amounts in (a) and (b) above is dependent on the realisation of value from the sale of assets of MIL.

5. Depreciation has been provided for on all fixed assets on straight-line basis in accordance with the provisions of the Companies Act, 1956, at the rates and in the manner specified in schedule XIV of the Act. In respect of Speciality Chemicals, Cryolite, Aluminium Fluoride, Refrigerant Gases, ABF, Fluoroaniline Plants, R & D Pilot Plant and Captive Power Plant depreciation have been provided for at the rate applicable to continuous process plants.

6. a) The company has taken office and residential premises under operating lease or leave and license agreements. These are generally cancelable in nature and range between 11 months to 36 months. These leave and license agreements are generally renewable or cancelable at the option of the Company or the lessor. The lease payment recognised in the profit and loss account is Rs. 210.83 lacs (previous year Rs 77.29 lacs).

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

8. a) Derivative instruments

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

b) Net exchange difference in respect of forward contracts to be credited - debited in subsequent accounting year amounts to Rs. nil (as at 31st March, 2010, debit Rs. 27.83 lacs).

d) The net amount of exchange gain included in the Profit and loss account for the year is Rs. 95.16 lacs (previous year loss, Rs.103.45 lacs).

9. Research and development expenditure debited to the Profit and loss account by charge to relevant heads of account amount to Rs. 434.75 lacs (previous year, Rs. 270.90 lacs).

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

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

12. Segment information

Primary

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

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

14. The Company had made a rights issue of equity shares in an earlier year. The first and final call of Rs. 30/- per share (including premium of Rs. 25/-) was made during an earlier year. The proceeds have been used to part finance infusion of funds into MIL and for general corporate purposes. Unutilised monies as at the year end, Rs. nil (as at 31st March, 2010, Rs. 0.07 lacs).

15. Employee benefits

Contributions are made to Recognized Provident Fund / Government Provident Fund and Family Pension Fund which covers all regular employees. Contribution is also made in respect of executives to a Recognized Superannuation Fund. While both the employees and the Company make predetermined contributions to the Provident Fund, contribution to the Family Pension Fund and Superannuation Fund are made only by the Company. The contributions are normally based on a certain proportion of the employees salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs. 227.01 lacs (previous year, Rs. 165.75 lacs).

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

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

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

16. Pursuant to the decision of the Board of Directors of the Company taken in its meeting dated 24th September, 2010, the Company bought back 3,38,792 equity shares of nominal value of Rs. 10 each at a price of Rs. 400.00 per share for an aggregate value of Rs. 1355.17 lacs during the year under Section 77A of the Companies Act, 1956 through tender offer by utilising the Share premium account to the extent of Rs. 1321.29 lacs. The Capital redemption reserve has been created out of General reserve for Rs. 33.88 lacs being the nominal value of shares thus bought back. All the equity shares bought back have been extinguished by 5th March, 2011.

17. Employee Stock Option Scheme

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

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

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

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

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

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

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

i Had fair value method been used, the compensation cost would have been higher by Rs. 17.33 lacs (previous year Rs 17.33 lacs), Profit after tax would have been lower by Rs. 11.41 lacs (previous year Rs. 11.08 lacs) and EPS – both basic and diluted - would have been Rs. 70.99 per share (previous year Rs. 73.45 per share).

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

18. Related party transactions

Names of related parties where control exists

Sulakshana Securities Limited – wholly owned subsidiary company

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

Key management personnel

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

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

Shri Atul K. Srivastava

Shri Satish D. Kakade (upto 31.12.2010)

Shri Shekhar Khanolkar

Relatives of key management personnel

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

Smt. Sushilaben A. Mafatlal (upto 20.11.2010)

Smt. Rekha H. Mafatlal

Smt. Aarti Chaddha

Ms. Anjali H. Mafatlal

Mr. Priyavrata H. Mafatlal

Ms. Padmaja Mafatlal

Associate

Mafatlal Denim Limited

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

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

NOCIL Limited

Mafatlal Impex Private Limited

Vibhadeep Investments and Trading Limited

Sushripada Investments Private Limited

Shamir Texchem Private Limited

Marigold International Private Limited

Pamil Investments Private Limited

Navlekh Investments Limited

Milap Texchem Private Limited

Surekha Holdings Private Limited

Krishnadeep Housing Development Private Limited

Sunanda Industrial Machinery Limited

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


Mar 31, 2010

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

1. Contingent liabilities in respect of:

a. Claims against the Company not acknowledged as debts

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

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

Disputed bills of vendors not accounted for -- 8.84

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

d. Income tax matters disputed in appeal 606.81 371.72

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

11. Segment information

Primary

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

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

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

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

15. Employee benefits

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

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

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

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

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

17. Employee Stock Option Scheme

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

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

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

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

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

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

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

18. Related party transactions

Names of related parties where control exists

Sulakshana Securities Limited -wholly owned subsidiary company

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

Key management personnel

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

Relatives of key management personnel

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

Smt. Sushilaben A. Mafatla

Smt. Rekha H. Mafatlal

Smt. Aarti Chaddha

Ms. Anjali H. Mafatlal

Mr. Priyavrata H. Mafatla

Ms. Padmaja Mafatla

Associate

Mafatlal Denim Limited

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

Mafatlal Industries Limited

Mafatlal Fabrics Private Limited

National Organic Chemical Industries Limited

Mafatlal Impex Private Limited

Vibhadeep Investments and Trading Limited

Sushripada Investments Private Limited

Shamir Texchem Private Limited

Marigold International Private Limited

Pamil Investments Private Limited

Navlekh Investments Limited

Milap Texchem Private Limited

Surekha Holdings Private Limited

Krishnadeep Housing Development Private Limited

Sunanda Industrial Machinery Limited

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

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