(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.