NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018

Fair value sensitivity analysis for fixed-rate instruments

All the borrowings of company are at variable interest rates. Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. In cases where the related interest rate risk is capitalized to fixed assets, the impact indicated below may affect the Company's income statement over the remaining life of the related fixed assets.

Note 42

Capital management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company monitors capital using a ratio of 'adjusted net debt' to 'adjusted equity'. For this purpose, adjusted net debt is defined as total borrowings, comprising interest-bearing loans and borrowings, less cash and cash equivalents and bank deposits. Adjusted equity comprises all components of equity.

Note 43

Segement Reporting

Segment repoting will be presented in the consolidated financial statements. Note 44

Related Party Disclosures, as required by Indian Accounting Standard 24 (Ind AS 24) are given below: A. Relationships -Subsidiaries:

a) Chhattisgarh Power Ventures Private Limited (up to March 29, 2018)

b) Middle East Appliances LLC

c) Pipavav Energy Private Limited

d) Prosperous Energy Private Limited

e) Videocon Electronics (Shenzhen) Limited (Chinese Name - Weiyoukang Electronic (Shenzhen) Co., Ltd.)

f) Videocon Global Limited

g) VOVL Limited (formerly Videocon Oil Ventures Limited) and its subsidiaries Videocon Hydrocarbon Holdings Limited and its subsidiaries

Videocon JPDA 06-103 Limited

Videocon Indonesia Nunukan Inc.

Videocon Energy Brazil Limited

Videocon Australia WA-388-P Limited

Videocon Mauritius Energy Limited

Videocon International Cooperatie U.A. and its subsidiaries

Videocon Hydrocarbon Ventures B.V.

Videocon Brazil Ventures B.V. and its subsidiary

Videocon Brasil Petroleo Ltda

h) Electroworld Digital Solutions Limited (formerly Videocon International Electronics Limited) and its subsidiaries - Jumbo Techno Services Private Limited

Senior Consulting Private Limited

Videocon Telecommunications Limited and its subsidiary

Videocon Easypay Private Limited (formerly Datacom Telecommunications Private Limited) i) Videocon Energy Limited and its subsidiary

Proficient Energy Private Limited and its subsidiary (upto March 31, 2018)

Applied Energy Private Limited (upto March 31, 2018) Associates and Joint Ventures:

Radium Appliances Private Limited -Associate - 26%

Unity Power Private Limited -Associate - 26% (upto May 26, 2017)

VISPL LLP -Associate of Videocon Telecommunications Limited - 50% (w.e.f. January 2, 2018)

Videocon Infinity Infrastructure Private Limited - Joint Venture - 50%

IBV Brasil Petroleo Limitada - (50% Joint Venture of Videocon Energy Brazil Limited)

Liberty Videocon General Insurance Company Limited (up to March 14, 2018) Key Management Personnel:

Mr. Venugopal N. Dhoot - Managing Director & CEO

Mr. Sunil Tandon - Senior Vice President

Mr. Mandar C. Joshi - Company Secretary

- Remuneration to Key Management Personnel Rs 33.20 Million (Previous Period Rs 84.70 Million) C. Balances due from/to the related parties:

Note 45

There are certain disputes with the Government of India ("GOI") with respect to the Production Sharing Contract dated October 28, 1994 ("Rawa PSC") pertaining to Ravva Oil & Gas Field which were referred to more than one international arbitration for resolution. The respective International Arbitral Tribunals have issued their respective Awards from time to time substantially in favour of the Company. However the GOI has preferred to challenge few of the Awards in various Courts in India and overseas but has not succeeded so far in any of the Courts. Pending final resolution of the disputes, certain amounts have been excess recovered, deducted or short paid by the GOI and / or its Nominees which have been challenged by the Company and the Company is seeking recovery of amounts excessively recovered, deducted or short paid by the GOI and/or its Nominees. Based on legal advice, the Company believes its contentions will be upheld. Any further sum required to be paid by the Company or recoverable by the Company in respect of any of these disputes in accordance with the determination of the amount by the Hon'ble Arbitral Tribunal/relevant courts in this regard shall be accounted for on the final outcome in those matters.

Note 46

The Company alongwith 13 other affiliates/entities (collectively referred to as 'Obligors' or individually as 'Borrower') executed Facility Agreement with the consortium of existing domestic rupee term lenders (RTL Lenders), under the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities are Videocon Industries Limited, Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited, Evans Fraser and Co. (India) Limited, Electroworld Digital Solutions Limited and Videocon Telecommunications Limited.

As per the said Facility Agreement, the Company is agent of the Obligors and has been referred to as 'Obligor Agent'. The Rupee Term Loans have to be utilised for the purpose mentioned in the Facility Agreement which is mainly for refinancing of existing Rupee Term Loans of the Obligors. Accordingly, the Rupee Term Loans were allocated to respective Obligors based on their outstanding amount as on December 31, 2011 and the lenders have also directly disbursed further amounts to some of the Obligors. As the Company is a co-obligor, it is contingently liable in respect of the borrowings of other Obligors/Borrowers to the extent of outstanding balance of Rupee Term Loans as on March 31, 2018 of Rs. 49,173.91 Million (As at March 31, 2017 Rs 50,822.98 Million).

Note 47

The Consortium of various banks have sanctioned the Letter of Comfort (LoC)/Stand-by Letters of Credit (SBLC) facility to the Company and its subsidiary VOVL Limited (VOVL) (collectively referred to as 'Obligors') to secure the foreign currency facility raised / to be raised by Videocon Hydrocarbon Holdings Limited (VHHL), an overseas subsidiary, from its lenders. The LoC/SBLC facility is secured by first ranking pledge of 100% shares of VOVL, VHHL and shares of certain subsidiaries of VHHL and IBV Brasil Petroleo Limitada, a 50:50 joint venture of a subsidiary of VHHL, charge over fixed assets of certain subsidiaries of VHHL, VHHL's share of cash flows from identified oil & gas assets through escrow of receivables, first ranking / exclusive charge on specified bank accounts for the benefit of the LoC/SBLC providers, exclusive charge on oil & gas facility servicing account of Obligors set-up under the onshore Trust and Retention Accounts, negative lien on shares of other subsidiaries of VHHL viz. Videocon JPDA06-103 Limited and Videocon Australia WA-388-P Limited, first pari-passu charge on Videocon brand and personal guarantee of Mr. Venugopal N. Dhoot, Mr. Pradipkumar N. Dhoot and Mr. Rajkumar N. Dhoot.

During the year, some of the LOC/SBLC Lenders released the Company from its obligations, as an obligor/co-obligor under the LoC/ SBLC facility. In turn, the Company issued a corporate guarantee in favour of such lenders. Accordingly, the Company is contingently liable in respect of the LoC/SBLC facility of VOVL to the extent of Rs 1,165.59 Million (As at March 31, 2017 Rs. 198,943.99 Million).

Note 48

The Directorate of Revenue Intelligence, Mumbai Zonal Unit ('DRI') has issued Show Cause Notice(s) ('SCN') dated September 10, 2014 and December 30, 2014 to the Company in connection with import of Colour Picture Tubes ('CPTs') by the Company and other concerns. Vide SCNs, the Company has been asked to explain / as to why the declared value of CPTs imported should not be rejected and re-determined and why the amount of anti-dumping duty of Rs 1,657.21 Million and penalty thereon should not be recovered under the extended period under the provisions of the Customs Act, 1962.

In order to buy peace, the Company filed application with the Adjudication Authority who vide order dated April 20, 2017 determined that the declared value of the Company is liable to be rejected and re-determined under Customs Valuation Rules read with Section 14 of the Customs Act, 1962 and the Company is liable to payment of anti-dumping duty amounting to ? 687.49 Million payable on the import of CPTs and the penalty of equivalent amount along with interest thereon under Section 114A of the Customs Act, 1962. Further, the Adjudication Authority imposed a penalty of ? 0.50 Million on the Company on High Sea Sales under Section 112(a) of the Customs Act, 1962. Subsequently, the Company has filed an appeal against the Order passed by Adjudication Authority before The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and the same is pending before the said CESTAT. The Company has been advised by its counsels that the Order passed by Adjudication Authority is untenable in the court of laws. Hence, no provision has been considered necessary in the financial statements.

Note 49

Intesa Sanpaolo S.p.A., an Italian bank, had initiated winding up proceedings against the Company on the basis of 'Patronage Letter' issued by the Company to the said Italian bank in June, 2007 for financial assistance given to the then one level step down subsidiary, Mis. VDC Technologies S.p.A., an Italian defunct company acquired by another subsidiary of the Company, M/s. Eagle Corporation Limited registered in Cayman Island. Single judge vide judgement dated December 5, 2013 passed a conditional order of winding up of the Company on its failure to deposit in court the amount of ? 2,597.30 Million equivalent of Euro 38.00 Million, which was confirmed by the division bench of the High Court of Judicature at Bombay on July 18, 2014.

The Company had challenged the order of Bombay High Court by way of Special Leave Petition ('SLP') in the Supreme Court. The Company had denied its liability out of the said 'Patronage Letter'. The Company, pending the final disposal of SLP, agreed to create lien on Fixed Deposit Receipts of Rs 1,363.82 Million and ? 1,210.40 Million in favour of the Registrar of Supreme Court. The Hon'ble Supreme Court had stayed the impugned order of the Bombay High Court and directed to issue notice for further hearing of the matter. The Hon'ble Supreme Court had also admitted SLP filed by the Company and final hearing was pending.

Intesa Sanpaolo S.p.A. had also obtained exparte decree against the Company from Turin Court of Italy and on the basis of said decree, Intesa Sanpaolo S.p.A. had filed suit bearing No.2434/2012 in Bombay High Court for obtaining decree against the Company. The Company had appeared in the matter and was contesting the said exparte decree on merit. While the aforesaid suits and litigation were in progress, the Company and Intesa settled the matter by filing the Consent Terms before the Hon'ble Supreme Court at Euro 21.00 Million equivalent to Rs. 1,434.31 Million. As per the Consent Terms the Company has paid Rs. 1,434.31 Million towards full and final repayment of principal sum and Intesa waived off all its other claims including interest due on loan availed by VDC Technologies S.p.A. in full and final settlement and all the pending suits / petitions are withdrawn by both the parties. Further, all rights, interest and claims against VDC Technologies S.p.A. have been assigned and transferred to the Company. However, considering that the said VDC Technologies S.p.A. is defunct and under liquidation, said amount paid on settlement is charged to revenue.

Note 50

The Company has, directly and through its subsidiaries, made investments of Rs. 75,339.53 Million in Videocon Telecommunications Limited (VTL), the subsidiary.

2016 as amended, its networth is positive and the management is confident of continuing its commercial operations in the National Long Distance (NLD) and International Long Distance (ILD) Business. Accordingly, in the opinion of the management, no provision is required for diminution in the value of aforesaid investments and advances to VTL.

Note 51

The confirmations and reconciliation of balances of certain secured and unsecured loans, balances with banks, trade receivables, trade and other payables and loans and advances are pending. The management is in the process of obtaining confirmations and reconciliation of balances. In the opinion of the management, there will not be any material impact on the standalone Ind AS financial statements.

Note 52

State Bank of India, the lead bank of the Company has initiated Corporate Insolvency Resolution Process (CIRP) for the Company under the Insolvency and Bankruptcy Code, 2016 as amended and has filed the petition in National Company Law Tribunal (NCLT), Mumbai. The matter is under consideration of the NCLT. In view of the above and in view of the persistent severe strains on the working capital for more than a year, there is a significant drop in the production and sale of products which raises doubt on the ability of the Company to continue as "Going Concern" for the purpose of activities and operations of the Company along with activities and operations of other co-obligor companies. Also, the referral of the Company, in line with the directives of Reserve Bank of India, to NCLT under the Insolvency and Bankruptcy Code by lenders, amounts to a very material event. On this background during the year, the Company has discarded and /or disposed of certain current assets in view of the same being irretrievable for the purpose of business. The Company continues the process for ascertaining the liquidation value for remaining current assets such as raw materials, finished goods, stock-in-process, receivables etc., justifiably assuming that the going concern concept stands vitiated and necessary adjustments will be effected in the due course.

Note 53

The manufacturing activity of Glass Shell division located at Bharuch, which manufactured panels and funnels used in colour picture tube for colour television, has been suspended from July, 2017 due to poor demand of these products due to changes in technology for colour televisions. The management is of the view that the said factory and facilities can be, with some modifications, used for production of solar panel glass, solar lense, glass fibre and glass blocks which have good demand in the market. In view of the above, no provision for impairment has been considered necessary for the assets of the glass shell division at this stage.

Note 54

There are no amounts due and outstanding, to be credited to the Investor Education and Protection Fund.

Note 55.1

Unincorporated Joint Ventures:

The Financial Statements reflect the share of the Company in the assets and the liabilities as well as the income and the expenditure of Joint Venture Operations on a line-by-line basis. The Company incorporates its share in the operations of the Joint Venture based on statements of account received from the Operator. The Company has, in terms of Significant Accounting Policy No. 1.3 (E), recognised abandonment costs based on the technical assessment of current costs as cost of producing properties and has provided depletion thereon under 'Unit of Production' method as part of Producing Properties in line with Guidance Note on Accounting of Oil and Gas Producing Activities issued by the Institute of Chartered Accountants of India.

The Company has participating interest of 25% in Ravva Oil and Gas Field Joint Venture (JV) through a Production Sharing Contract (PSC). Other members of the JV are Oil and Natural Gas Corporation Limited, Cairn India Limited and Ravva Oil (Singapore) Pte. Limited. The parties have pursuant to the PSC, entered into a Joint Operating Agreement. Cairn India Limited is the Operator.

Note 55.2

Incorporated Jointly Controlled Entities:

i) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint Venture Company incorporated in India, with Infinity Infotech Parks Limited to carry on the business of infrastructure development like construction of IT/ITes Parks, Biotech Parks etc. The Joint Venture Company has not commenced its commercial operations.

ii) Liberty Videocon General Insurance Company Limited is a Joint Venture Company incorporated in India, to carry non life insurance business in India. Upto March 14, 2018 the Company holds 56.53% stake in joint venture and the remaining equity is owned by Liberty Mutual Insuance Group. As on March 14, 2018, the Company sold/exited its stake on this joint venture.

iii) The financial interest of the Company in the jointly controlled incorporated entity based on financial statement received is as under:

Note 55.3

The estimated amount of commitment of the Company towards contribution in various Joint Ventures for next year based on minimum work program is Rs. 2,663.41 Million (As at March 31, 2017 Rs. 1,075.04 Million).

Note 56

The Company has kept the investment activities separate and distinct from other businesses. Consequently, all the income and expenditure pertaining to investment activities have been allocated to the Investments and Securities Division and the income/(loss) after netting of the related expenditure has been shown as "lncome/(Loss) from Investments and Securities Division" under "Other Income" which includes in respect of the long term investments, dividend of Rs. 1.39 Million (Previous year Rs. 0.95 Million), and profit on sale/disposal of investments of Rs. 65.31 Million (Previous year Rs. 27.26 Million).

C.I.F. Value of Imports, Expenditure and Earnings in Foreign Currency

Note 58

Share of the Company in remaining reserves on proved and probable basis (as per Operator's estimates) in Ravva Oil & Gas field (Unincorporated) Joint Venture, relied upon by the auditors, being technical evaluation/matter.

Note 59

The Financial Institutions have a right to convert, at their option, the whole outstanding amount of term loans or a part not exceeding 20% of defaulted amount of loan, whichever is lower, into fully paid up Equity Shares of the Company at par on default in payments/repayments of three consecutive installments of principal and/or interest thereon or on mismanagement of the affairs of the Company. Such conversion are considered to be anti-dilutive in nature and hence not considered for computation of the diluted earnings per share.

Note 60

The figures for the comparative period represents profit/loss for the 15 month period ended March 31, 2017 while the figures for the current period are for the 12 month ended March 31, 2018. Accordingly, in addition to the factors highlighted in the notes above, the figures for the comparative period are not strictly comparable to the profit/loss for the current year. Previous period figures have been reclassified, regrouped, recasted to confirm to the classification of the current year.

Note 61

The Company has received Grant from Ozone Cell, Ministry of Environment & Forests, Government of India for financing the machinery under the Ozone Project. As per the accounting policy followed by the Company, the Grant received for Ozone Project has been treated as "deferred income" to be recognised in the Statement of Profit and Loss over the useful life of the assets under the Ozone Project. Accordingly, an amount of Rs. 4.07 Million (Previous period Rs. 5.10 Million) has been allocated to income and credited to other non-operating income, in proportion to the depreciation charged on those assets for the period. The balance deferred income has been carried to Balance Sheet as Grant for Ozone Project.