3.8 Provisions and contingencies

The Company recognizes provisions when a present
obligation (legal or constructive) as a result of a past event
exists and it is probable that an outflow of resources
embodying economic benefits will be required to settle
such obligation and the amount of such obligation can
be reliably estimated. Provisions are reviewed at each
balance sheet date and are adjusted to reflect the current
best estimate.

The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking into
account the risks and uncertainties surrounding the
obligation. If the effect of time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, whose existence
would be confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the
control of the Company or a present obligation that is
not recognized because it is not probable that an outflow

of resources will be required to settle the obligation.
Contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses its
existence in the financial statements.

Contingent assets are not recognized in the financial
statements. However, it is disclosed only when an inflow of
economic benefits is probable.

3.9 Financial instruments

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instruments. Financial assets and financial
liabilities are measured at fair value on initial recognition,
except for trade receivables which are initially measured
at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in
profit or loss.

A] Financial assets

a) Initial recognition and measurement:

Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the instrument. On initial
recognition, a financial asset is recognised at
fair value, except for trade receivables which
are initially measured at transaction price. In
case of financial assets which are recognised
at fair value through profit and loss (FVTPL),
its transaction costs are recognised in the
statement of profit and loss. In other cases,
the transaction costs are attributed to the
acquisition value of the financial asset.

b) Effective interest method

The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period. The effective interest
rate is the rate that exactly discounts estimated
future cash receipts (including all fees and
points paid or received that form an integral

part of the effective interest rate, transaction
costs and other premiums or discounts) through
the expected life of the debt instrument, or,
where appropriate, a shorter period, to the net
carrying amount on initial recognition.

Income is recognised on an effective interest
basis for debt instruments other than those
financial assets classified as at FVTPL. Interest
income is recognised in profit or loss and is
included in the ‘Other income’ line item.

c) Subsequent measurement:

For subsequent measurement, the Company
classifies a financial asset in accordance with
the below criteria:

i. The Company’s business model for
managing the financial asset and

ii. The contractual cash flow characteristics
of the financial asset.

Based on the above criteria, the Company
classifies its financial assets into the following
categories:

i. Financial assets measured at amortized
cost:

A financial asset is measured at the
amortized cost if both the following
conditions are met:

a) The Company’s business model
objective for managing the financial
asset is to hold financial assets in
order to collect contractual cash
flows, and

b) The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest on the
principal amount outstanding.

Such financial assets are subsequently
measured at amortized cost using the
effective interest method.

The amortized cost of a financial asset is
also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if
both of the following conditions are met:

a) The Company’s business model
objective for managing the financial
asset is achieved both by collecting
contractual cash flows and selling
the financial assets, and

b) The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest on the
principal amount outstanding.

Investments in equity instruments,
classified under financial assets, are
initially measured at fair value. The
Company may, on initial recognition,
irrevocably elect to measure the same
either at FVTOCI or FVTPL. The Company
makes such election on an instrument-
by-instrument basis. Fair value changes
on an equity instrument are recognised
as other income in the Statement of Profit
and Loss unless the Company has elected
to measure such instrument at FVTOCI.

This category does not apply to any of the
financial assets of the Company.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL
unless it is measured at amortized
cost or at FVTOCI as explained above.
This is a residual category applied to
all other investments of the Company
excluding investments in subsidiaries
and associates. Such financial assets are
subsequently measured at fair value at
each reporting date. Fair value changes
are recognized in the Statement of Profit
and Loss.

d) Derecognition:

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is derecognized (i.e. removed
from the Company’s Balance Sheet) when any
of the following occurs:

i. The contractual rights to cash flows from
the financial asset expires;

ii. The Company transfers its contractual
rights to receive cash flows of the financial
asset and has substantially transferred all
the risks and rewards of ownership of the
financial asset;

iii. The Company retains the contractual
rights to receive cash flows but assumes
a contractual obligation to pay the cash
flows without material delay to one or
more recipients under a ‘pass-through’
arrangement (thereby substantially
transferring all the risks and rewards of
ownership of the financial asset);

iv. The Company neither transfers nor
retains substantially all risk and rewards
of ownership and does not retain control
over the financial asset.

In cases where the Company has neither
transferred nor retained substantially all of
the risks and rewards of the financial asset,
but retains control of the financial asset, the
Company continues to recognize such financial
asset to the extent of its continuing involvement
in the financial asset. In that case, the Company
also recognizes an associated liability.

The financial asset and the associated liability
are measured on a basis that reflects the rights
and obligations that the Company has retained.

On derecognition of a financial asset, the
difference between the asset’s carrying amount
and the sum of the consideration received and
receivable and the cumulative gain or loss that
had been recognised in other comprehensive
income and accumulated in equity is recognised
in profit or loss if such gain or loss would have
otherwise been recognised in profit or loss on
disposal of that financial asset.

e) Impairment of financial assets

The Company applies expected credit losses
(ECL) model for measurement and recognition
of loss allowance on the following:

i. Trade receivables

ii. Financial assets measured at amortized
cost (other than trade receivables)

In case of trade receivables, the Company
follows a simplified approach wherein an
amount equal to lifetime ECL is measured
and recognized as loss allowance.

In case of other assets measured at
amortized cost, the Company determines
if there has been a significant increase in
credit risk of the financial asset since initial
recognition. If the credit risk of such assets
has not increased significantly, an amount
equal to 12-month ECL is measured and
recognized as loss allowance. However, if
credit risk has increased significantly, an
amount equal to lifetime ECL is measured
and recognized as loss allowance.

Subsequently, if the credit quality of the
financial asset improves such that there is
no longer a significant increase in credit
risk since initial recognition, the Company
reverts to recognizing impairment loss
allowance based on 12-month ECL.

ECL is the difference between all
contractual cash flows that are due to the
Company in accordance with the contract
and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls),
discounted at the original effective
interest rate.

12-month ECL are a portion of the lifetime
ECL which result from default events
that are possible within 12 months from
the reporting date. Lifetime ECL are the
expected credit losses resulting from all
possible default events over the expected
life of a financial asset.

ECL are measured in a manner that they
reflect unbiased and probability weighted
amounts determined by a range of
outcomes, taking into account the time
value of money and other reasonable
information available as a result of past
events, current conditions and forecasts
of future economic conditions.

ECL impairment loss allowance (or
reversal) recognized during the period
is recognized as expense/income in the
Statement of Profit and Loss under the
head ‘Other expenses’/ ‘Other income’.

B] Financial liabilities and equity instruments

Debt and equity instruments issued by a Company
entity are classified as either financial liabilities or
as equity in accordance with the substance of the
contractual arrangements and the definitions of a
financial liability and an equity instrument.

i. Equity instruments:

An equity instrument is any contract that
evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity
instruments issued by a Company entity are
recognised at the proceeds received, net of
direct issue costs.

Repurchase of the Company's own equity
instruments is recognised and deducted
directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue
or cancellation of the Company's own equity
instruments.

ii. Financial Liabilities: -

a) Initial recognition and measurement:

Financial liabilities are recognised when
the Company becomes a party to the
contractual provisions of the instrument.
Financial liabilities are initially measured
at fair value.

b) Subsequent measurement:

Financial liabilities are subsequently
measured at amortised cost using the
effective interest rate method. Financial
liabilities carried at fair value through profit
or loss are measured at fair value with all
changes in fair value recognised in the
Statement of Profit and Loss.

The Company has not designated any
financial liability as at FVTPL.

c) Derecognition:

A financial liability is derecognized
when the obligation under the liability

is discharged or cancelled or expires.
When an existing financial liability is
replaced by another from the same
lender on substantially different terms,
or the terms of an existing liability
are substantially modified, such an
exchange or modification is treated as
the Derecognition of the original liability
and the recognition of a new liability. The
difference between the carrying amount
of the financial liability derecognized and
the consideration paid is recognized in
the Statement of Profit and Loss.

3.10 Earnings Per Share

Basic earnings per share is computed by dividing the net
profit for the period attributable to the equity shareholders
of the Company by the weighted average number of
equity shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period and for all periods presented is adjusted for
events, such as bonus shares, other than the conversion
of potential equity shares that have changed the number
of equity shares outstanding, without a corresponding
change in resources.

For the purpose of calculating diluted earnings per
share, the net profit for the period attributable to equity
shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects of
all dilutive potential equity shares.

4. Critical accounting judgements, assumptions
and use of estimates

The preparation of the Company’s financial statements
requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future
periods.

The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is
revised if the revision affects only that period or in the
period of revision or future periods if the revision affects
both current and future periods.

Following are the critical judgements, assumptions and
use of estimates that have the most significant effects on
the amounts recognized in these financial statements:

a) Defined employee benefit obligation:

The cost of post-employment benefits is determined
using actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments in the future. These
include the determination of the discount rates;
future salary increases and mortality rates. Due to
the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All
assumptions are reviewed annually.

b) Income taxes

Provision for current tax is made based on
reasonable estimate of taxable income computed as
per the prevailing Income tax laws. The amount of
such provision is based on various factors including
interpretation of tax regulations, changes in tax laws,
acceptance of tax positions in the tax assessments
etc.

c) Investment in an associate

Pursuant to the scheme of amalgamation of INOX
Leisure Limited (erstwhile subsidiary of the Company)
with PVR Limited (now known as PVR INOX Limited)

in the FY 2022-23, the Company had received
1,58,35,940 fully paid-up equity shares of PVR INOX
Limited, which represented 16.16% of its total paid-
up equity capital. In view of power of GFL Limited
to participate in the financial and operating policy
decisions of PVR INOX Limited, it is concluded that
GFL Limited has significant influence over PVR INOX
Limited and hence investment in PVR INOX Limited is
classified as an associate.

The management is required to determine whether
there is any objective evidence that its net investment
in the associate is impaired. After analyzing the
observable data that has come to the attention of
management and the nature of investment being
long-term, even though there are fluctuations in
the quoted price of shares of the associate, the
management has concluded that there is no objective
evidence that its investment in associate is impaired
to carry further impairment testing of the investment.

26 Financial Instruments (Contd..)

26.3 Financial risk management

The Company is exposed to financial risks which include market risk, credit risk and liquidity risk. The Company’s management
oversees the management of these risks. The Company’s financial risk management activities are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s
policies and risk objectives.

a. Market Risk

Market risk comprises of currency risk, interest rate risk and other price risk. The Company does not have any exposure
to foreign currency or interest rate risk.

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.
The Company is exposed to equity price risk arising from financial assets such as investments in equity instruments and
mutual funds. The equity investments are in subsidiary and associate which are held for strategic rather than trading
purposes and the Company does not actively trade in these investments. The Company’s investments in mutual funds are
only in debt funds. Hence the Company’s exposure to other price risk is minimal.

b. Credit Risk Management

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. Credit risk arises primarily from bank balances, investments and trade receivables. Credit risk arising from bank
balances and investments in mutual funds are limited since the counterparties are reputed banks and mutual fund houses.
The Company has only one customer who is a reputed broker and there is no history of delayed payments and hence the
credit risk is minimal.

c. Liquidity Risk Management

Ultimate responsibility for Company’s liquidity risk management rests with the Company’s Board of Directors. The
Company generally manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching
the maturity profiles of financial assets and liabilities.

26.4 Liquidity risk table

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the entity can be required to pay. The table below include only principal cash flows in relation to financial liabilities.

31 Segment information

The financial report of the Company contains both the consolidated financial statements as well as the separate (standalone)
financial statements. Accordingly, in terms of Paragraph 4 of Ind AS 108 ‘Operating Segments’, the disclosures in respect of segment
information are made only in the consolidated financial statements.

32 Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013

a) Details of benami property held:

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

b) Compliance with number of layers of companies

The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act
read with the Companies (Restriction on number of Layers) Rules, 2017.

c) Compliance with approved Scheme(s) of Arrangements

There is no Scheme of Arrangements that has been approved by the Competent Authority in terms of sections 230 to 237
of the Companies Act, 2013.

d) Loans and advances granted to related party

The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the related
parties.

e) Undisclosed income

There is no income surrendered or disclosed as income during the current or preceding year in the tax assessments
under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961),
that has not been recorded in the books of account.

f) Details of Crypto Currency or Virtual Currency

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

g) Ratios

Additional regulatory information required under (WB) (xiv) of Division III of Schedule III amendment, disclosure of ratios,
is considered as not applicable to the Company as it is a Core Investment Company (CIC) not requiring registration under
Section 45-IA of Reserve Bank of India Act, 1934.

32 Additional disclosures/regulatory information as required by Schedule III to the Companies Act, 2013
(Contd..)

h) Utilisation of Borrowed funds and share premium

The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the like 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, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

As per our report of even date attached

For Patankar & Associates For GFL Limited

Chartered Accountants
Firm's Reg. No: 107628W

Sanjay S Agrawal D. K. Jain Siddharth Jain

Partner Managing Director Director

Membership No: 049051 DIN: 00029782 DIN: 00030202

Place: Pune Place: New Delhi Place: Mumbai

Date: 30 May 2025

Dhiren Asher Lakhan Shamala

Chief Financial Officer Company Secretary

Place: Mumbai Place: Mumbai

Date: 30 May 2025