Notes to Accounts of Linde India Ltd.

Mar 31, 2025

i) Provisions, contingent liabilities, and contingent asset

A provision is recognised when there is a present
obligation (legal or constructive) as a result of a past
event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of
the obligation. If the effect of the time value of money
is material, provisions are discounted to reflect its
present value using a current pre-tax rate that reflects
the current market assessments of the time value of
money and the risks specific to the obligation. When
discounting is used, the increase in the provision due
to the passage of time is recognized as a finance cost.
Each provision is based on the best estimate of the
expenditure required to settle the present obligation at
the balance sheet date.

Contingent liabilities are disclosed when there is
a possible obligation arising from past events, the
existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the
Company or a present obligation that arises from past
events where it is either not probable that an outflow of
resources will be required to settle or a reliable estimate
of the amount cannot be made. When there is a possible
obligation or a present obligation in respect of which
the likelihood of outflow of resources is remote, no
provision or disclosure is made.

Provisions, Contingent liabilities and contingent assets
are reviewed at each Balance Sheet date.

j) Employee benefit.

The Company''s obligation towards various employee
benefits have been recognized as follows:

Short term benefits

Employee benefits payable wholly within twelve
months of receiving employees services are classified
as short-term employee benefits. These benefits
include salaries and wages, bonus and exgratia.

The undiscounted amount of short-term employee
benefits to be paid in exchange for employee services
is recognized as an expense as the related service
is rendered by employees. The company recognizes
a liability & expense for bonuses. The company
recognizes a provision where contractually obliged
or where there is a past practice that has created a
constructive obligation.

Post-employment Benefits

Defined contribution plans

The Company pays provident fund contributions to
publicly administered provident funds as per local
regulations. The Company has no further payment
obligations once the contributions have been paid.

The contributions are accounted for as defined
contribution plans and the contributions are recognized
as employee benefit expense when they are due.
Prepaid contributions are recognized as an asset to the
extent that a cash refund or a reduction in the future
payments is available.

Defined benefit plans

Recognition and measurement of defined benefit plans:

For defined benefit schemes i.e. gratuity,
superannuation and post-retirement medical benefit
schemes, the cost of providing benefits is determined
using the Projected Unit Credit Method, with actuarial
valuation being carried out at each balance sheet date.
Re-measurement gains and losses of the net defined
benefit liability/ (asset) are recognized immediately in
other comprehensive income. Such re-measurements
are not re-classified to the Statement of Profit & Loss in
the subsequent period. The service cost and net interest
on the net defined benefit liability/ (asset) is treated as
a net expense within employment costs.

Past service cost is recognized as an expense when the
plan amendment or curtailment occurs or when any
related restructuring costs or termination benefits are
recognized, whichever is earlier.

The defined benefit obligation recognized in the
balance sheet represents the present value of the
defined-benefit obligation as reduced by the fair value
of plan assets.

Other long-term employee benefits
Compensated absences

Liabilities recognized in respect of other long-term
employee benefits such as annual leave and sick
leave are measured at the present value of the
estimated future

cash outflows expected to be made by the Company
in respect of services provided by employees up to the
reporting date using the projected unit credit method
with actuarial valuation being carried out at each year
end balance sheet date. Actuarial gains and losses
arising from experience adjustments and changes in
actuarial assumptions are charged or credited to the
statement of profit and loss in the period in which they
arise. Compensated absences which are not expected to
occur within twelve months after the end of the period
in which the employee renders the related service are
recognized based on actuarial valuation.

k) Foreign exchange transactions.

Foreign exchange transactions are recorded at the
exchange rate prevailing on the date of the transactions.
Year-end monetary assets and liabilities denominated
in foreign currencies are translated at the year-end
foreign exchange rates. Non- Monetary items that are
measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of
transaction. Non-monetary items, measured at fair value
denominated in a foreign currency are translated using
the exchange rates that existed when the fair value
was determined.

Exchange differences arising on settlement or
translation of monetary items are recognized in the
Statement of Profit and Loss. The gain or loss arising
on translation of non-monetary items measured at
fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e.
translation differences on items whose fair value gain or
loss is recognized in other comprehensive income (OCI)
or profit and loss are also recognized in OCI or profit and
loss, respectively).

l) Share based Payments.

Share-based compensation benefits are provided to
employees under Long Term Incentive Plan which
permits the grant of Non-qualified Stock Options,
Restricted Stock Units and Performance stock Units. The
cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an
appropriate valuation model. That cost is recognised,
together with a corresponding increase in Employee
Stock Options Outstanding Account in equity, over
the period in which the performance and/or service
conditions are fulfilled, in Employee Benefit Expense.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting
date reflects the extent to which the vesting period
has expired and the Company''s best estimate of the
number of equity instruments that will ultimately
vest. Stock options which are equity settled options, is
granted, subject to the terms and provisions of the Plan,
to participants as determined by the Committee, in its
sole discretion. Each option granted shall be evidenced
by an award agreement that shall specify the option
price, the term of the option, the number of shares to
which the option pertains, the conditions, including
any performance goals, upon which an option shall
become vested and exercisable, and such other terms
and conditions as the committee shall determine which
are not inconsistent with the terms of the Plan. PSU and
RSU which are equity settled options are granted under
the 2009 Plan to senior level executives that vest over a
period of three years. The exercise price is Nil. Linde Plc
cross charges the amount to the Company, determined
based on the fair value of the shares on vesting of PSU
and RSU at the end of three years.

In accordance with Ind AS 36, ''Impairment of Assets'', the Company annually conducts impairment tests on goodwill by determining the
value-in-use for the related cash-generating unit (CGU). The goodwill was recognized in the calendar year 2021 following the acquisition
of business assets from M/s HPS Gases Ltd. The assessment of the recoverable amount for goodwill is determined using the Discounted
Cash Flow (DCF) method, which relies on specific key assumptions. Based on this assessment, the Company has assessed that there is
no impairment loss on goodwill for the current and previous year. The key factors involved in calculating the recoverable amount are
outlined below:

v) Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividend and share in the
Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of
an equity shareholders on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.
Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining
after distribution of all preferential amounts in proportion to the number of equity shares held.

(a) Securities Premium

Securities premium is used to record premium received on issue of shares. The reserve can be utilised in accordance with the provisions
of the Companies Act, 2013 (the "Companies Act").

(b) General Reserve

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified
percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013 the requirement
to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. There is no movement in general
reserve during the current and previous year.

(c) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distributions paid to shareholders.

(d) Equity instruments through Other Comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at fair
value through Other Comrehensive Income, net of amounts reclassified, If any, to Retained Earnings when those instruments
are disposed off.

(e) Stock Options outstanding account

Certain employees are issued stock options, restricted stock units and performance stock units by Linde PLC. Refer Note 48 for details.

(a) Provision for asset restoration obligation

Provision is towards estimated cost to be incurred on dismantling of plants at the customers'' site upon expiry of the tenure of the
contractual agreement with the customer. Such cost has been capitalised under plant and equipment.

(b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost,
servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual
warranty period which ranges from 1 year to 2 years.

(c) Provision for contingencies

Provision is the estimate towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties
and other levies in respect of which management believes that there are present obligations and the settlement of such obligations
are expected to result in outflow of resources, to the extent provided for. The timing and probability of outflow and expected
reimbursements, if any with regard to these matters depend on the ultimate outcome of the legal process or settlement/ conclusion of
the matter with relevant authorities/ customers/ vendors etc.

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and
assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The
Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its
financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the
financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following are the description of claims and assertions where a potential loss is possible, but not probable.

Litigations :

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to
be of material nature other than those described below.

a) Excise Duty and Service Tax

As at 31 March 2025, there were pending litigations for various matters relating to excise duty and service tax involving demands of
Rs. 333.17 million (31 Mar 2024: 333.17 million).

b) Sales Tax /VAT

As at 31 March 2025, the sales tax demands that are being contested by the Company amounted to Rs. 136.82 million (31 Mar 2024:
Rs. 196.06 million).

c) Income Tax

As at 31 March 2025, there were pending matters / cases relating to Income Tax for various assessment years aggregating to
Rs. 274.43 million (31 Mar 2024: Rs. 274.43 million).

d) Other claims

Other amounts for which the Company may contingently be liable aggregate to Rs 6.60 million (31 Mar 2024: Rs. 6.60 million).

It is not practicable for the company to estimate the closure of the above mentioned issues and the consequential timings of cash
flows, if any, in respect of the above.

38. Employee Benefits

i) Defined Contribution Plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees
towards Provident Fund and Pension Fund, which is a defined contribution plan. The company has no obligations other than to make
the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The only amounts
included in the balance sheet are those relating to the prior months contribution that are not due to be paid until the end of reporting
period. The amount recognised as an expense towards contribution to Provident Fund and Pension Fund for the year aggregated to Rs.
29.25 million (31 Mar 2024: Rs. 24.94 million).

ii) Defined Benefit Plan
Description of Plans

Retirement Benefit Plans of the Company include Gratuity, Pension and Post retirement medical benefits.

38. Employee Benefits (Contd..)

Gratuity & Pension

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for
a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount
equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service.
Gratuity is funded through direct investment under Indian Oxygen Limited Executive and Graded-Staff Gratuity Funds. The Company
accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

Investments of Pension for some employees are managed through Company managed trust.

Post retirement medical benefits

Under this unfunded scheme, employees of the Company receive medical benefits subject to certain limits on amounts of benefits,
periods after retirement and types of benefits, depending on their grade and location at the time of retirement. The Company accounts
for the liability for post-retirement medical scheme based on an actuarial valuation.

Governance

The trustees of the trust fund are responsible for the overall governance of the plan and to act in accordance with the provisions of the
trust deed and rules in the best interests of the plan participants. They are tasked with periodic reviews of the solvency of the fund
and play a role in the long-term investment, risk management and funding strategy.

Investment Strategy

The Company''s investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory
requirements. The plans expose the Company to a number of actuarial risks such as investment risk, interest rate risk, longevity risk
and inflation risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/
highquality bond yields; 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.
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.

Inflation 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 Company has developed policy guidelines for the allocation of assets to different classes with the objective of controlling risk and
maintaining the right balance between risk and long term returns in order to limit the cost to the Company of the benefits provided.

40. Capital management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term
goals of the Company. The Company determines the amount of capital required on the basis of annual business plan coupled with long term
and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and
long term and short term bank borrowings on need basis, if any. The Company monitors the capital structure on the basis of net debt to
equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and
cash equivalents.

The Company does not have any debt as at the reporting date and hence debt to equity ratio is Nil.

41. Financial Instruments

a ) Category-wise classification of Financial instruments

The carrying value and fair values of financial instruments by class are as follows:

b) Fair value measurements

The fair value of financial instruments as referred to in note above have been classified into three categories depending on the inputs
used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

a) Level 1: Quoted prices for identical instruments in an active market -

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets
for identical assets or liabilities. This category consists of investment in quoted equity shares.

b) Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs -

This level of hierarchy includes financial assets and liabilities, measured using inputs other than the quoted prices included
within level 1 that are observables for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
This level of hierarchy includes Company''s derivative contracts.

c) Level 3: Inputs which are not based on observable market data -

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market
data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that
are neither supported by prices from observable current market transactions in the same instrument nor they are based on
available market data.

For assets and liabilities which are measured at fair value as at Balance Sheet date, the classification of fair value calculations by
category is summarized below:

i) The Company has assessed that cash and bank balances, trade receivables, trade payables, and other financial assets and
liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent
limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates
presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale
transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be
different from the amounts reported at each reporting date.

iii) There have been no transfers between Level 1, level 2 and Level 3 for the year ended 31 March 2025/31 March 2024.

42. Financial Risk Management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, liquidity

and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the

financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors.

The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the
Company''s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk:

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the
price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency
exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally
predicted with reasonable accuracy.

a) Market risk - Foreign currency exchange rate risk:

The Company enter into sale and purchase transactions denominated in foreign currencies; consequently, exposures to exchange
rate fluctuations arise. Management monitors the movement in foreign currency and the Company''s exposure in each of the
foreign currency. Based on the analysis and study of movement in foreign currency, the Company takes remedial measures to
hedge foreign currency risk through various measures like derivative instruments etc.

The carrying amounts of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end of the
reporting period, not hedged by derivative instruments, are as follows:

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result
in an decrease in the Company''s net profit before tax by approximately Rs.120.83 million (Year ended 31 March 2024 :

Rs.53.16 million).

b) Market risk - Interest rate risk: Interest rate risk is the risk that the fair value or future cashflow of a financial instrument will
fluctuate because of change in market interest rate. The company does not have any borrowings, hence there is no exposure to
interest rate risk.

ii) Counter-party credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit
risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.
Financial instruments that are subject to concentrations of credit risk, principally consist of Cash & bank balances, trade receivables,
finance receivables and loans and advances. Company regularly reviews the credit limits of the customers and takes action to reduce
the risk. Further diverse and large customer bases also reduces the risk. All trade receivables are reviewed and assessed for default
on regular basis.

Customer credit risk is managed by the Company through established policy and procedures and controls relating to customer credit
risk management. To calculate ECL, the company groups its receivables (trade receivables and contract assets) by customer type i.e.
receivables from Gases (separately for healthcare and non healthcare) and receivables from Project Engineering division. The Company
has assessed its related party receivables and concluded that no Expected Credit Loss (ECL) provision is necessary. This determination
is based on the strong financial position and creditworthiness of the related parties, along with the historical payment patterns and
no risk of default. The company applies the simplified approach to determine the ECL for trade receivables. While calculating ECL, the
Company considers its past history, counter party''s ability to pay, existing market conditions as well as forward looking estimates at the
end of each reporting period. The historical loss rates considered for ECL are given below:

Gases without Healthcare

The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high
credit ratings.

* includes contract assets

iii) Liquidity risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is
to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and
non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits, which carry no
or low market risk. The Company''s liquidity position remains strong at Rs. 1,467.07 million as at 31 March 2025 (31 March 2024 : Rs.
9,798.32 million), comprising of cash and cash equivalents and other balances with banks.

43. Segment information

a) Gases, related products & services from which reportable segments derive their revenues:

Information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment
performance is based on product and services. Accordingly, management of the company has chosen to organise the segment based
on its products and services as follows:

- Gases, Related Products & Services

- Project Engineering

The company''s chief operating decision maker is the Managing Director.

Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a
reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are
neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

The company''s financing and income taxes are managed on a company level and are not allocated to operating segments.

Inter-segment revenue has been recognised at cost.

The Company operates predominantly within the geographical limits of India. In the company''s operations within India, there is no
significant difference in the economic condition prevailing in the various states of India. Revenue from sales to customers outside India
is less than 10% in the current and previous year. Hence, disclosures on geographical information are not applicable.

e) Information about major customers

Included in the revenue arising from direct sales of products and services of Rs. 24,852.22 million (Year ended 31 Mar 2024:

Rs. 27,683.79 million) are revenues of approximately Rs. 6,408.84 million (Year ended 31 March 2024: Rs. 9,580.42 million) which
arose from the sale to company''s top two customers. No other single customer contributed 10% or more of the company''s revenue in
the current and last year.

44. Information on Related Party Disclosure
A) List of Related Parties

i) Ultimate Holding Company

Linde Public Limited Company, Ireland

ii) Intermediate Holding Companies

Linde GmbH (Formerly Linde AG, Germany)

Linde Holding Gmbh
Linde UK Holdings Limited
Linde Holding Netherlands BV

iii) Holding Company

The BOC Group Limited, United Kingdom (Wholly owned Subsidiary of Linde GmbH)

iv) Fellow Subsidiaries and Joint Venture with whom transactions have taken place during the year

45. Leases

I. As a Lessor (IND AS 116)

The following is the summary of future minimum lease rental payments under non-cancellable operating leases and finance leases
entered into by the Company.

A. Operating leases as a lessor:

Significant leasing arrangements include lease of plant and machinery for use under long term arrangements for periods ranging
between 10 to 20 years with renewal option.

Future minimum lease payments under non-cancellable operating leases are as below:

B. Finance leases as a lessor:

Certain plant and machinery has been made available by the Company to the customers under a finance lease arrangement.

The arrangements covers a substantial part of the economic life of the underlying asset and contain a renewal option on expiry.
Receivables under long term arrangements involving use of dedicated assets are based on the underlying contractual terms and
conditions. Any change in the assumptions may have an impact on lease assessment and/or lease classification.

45. Leases (Contd..)

Such assets given under the lease arrangement have been recognised, at the inception of the lease as a receivable at an
amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a
pattern reflecting constant periodic return on the net investment in the lease. The income arising on account of finance lease
arrangement is Rs 0.26 million (Year ended 31 March 2024: Rs. 1.69 million).

The minimum lease receivable and the present value of minimum lease receivables in respect of arrangements classified as
finance leases are as below:

Note :

a) Reduction in cash & cash equivalents for capex projects

b) Reduction in cost of materials consumed

c) Reduction in purchase of materials & purchase of stock in trade

d) Reduction in cash & cash equivalents for capex projects

e) There is no oustanding debt in the company in the current and last year, hence Debt service ratio and Debt- Equity ratio is
not applicable.

48. Share-based payments

A. Description of share-based payment arrangements

Linde PLC, under Long Term Incentive Plan, permits the grant of Non-qualified Stock Options, Restricted Stock Units and
Performance stock Units.

(i) Stock Options

Stock options which are equity settled options, is granted, subject to the terms and provisions of the Plan, to participants as
determined by the Committee, in its sole discretion. Each option granted shall be evidenced by an award agreement that shall
specify the option price, the term of the option, the number of shares to which the option pertains, the conditions, including
any performance goals, upon which an option shall become vested and exercisable, and such other terms and conditions as the
committee shall determine which are not inconsistent with the terms of the Plan.

Awards of options shall be solely subject to the continued service of the Participant and shall become exercisable no earlier than
three years after the grant date, provided that such option may partially vest after no less than one year following such grant
date; and any other award of options shall become exercisable no earlier than one year after the grant date.

The exercise price is the fair value of shares on the date of the grant. The Options vests in a graded manner over a period
of three years.

Under the Plan, employees have the following options:

a) Exercise and Hold - The employees need to pay the exercise cost.

b) Exercise and Sell - The net proceeds (proceeds from sale of shares at fair maket value minus the exercise price) is paid
to the employee.

48. Share-based payments (Contd..)

c) Exercise and Sell to cover - The employees sells shares to the extent of exercise cost.

d) Exercise and Net Shares - The Group witholds the shares to cover the exercise cost and remaining shares are credited to the
employees account.

Typically employees avail option (b) above and consequently the net proceeds is directly paid by the Company to the employees
based on communication from Group''s stock option plan service provider.

(ii) Performance and Restricted Stock awards (PSU and RSU)

PSU and RSU which are equity settled options are granted under the 2009 Plan to senior level executives that vest over a period
of three years. The exercise price is Nil. Linde Plc cross charges the amount to the Company, determined based on the fair value
of the shares on exercise of PSU and RSU at the end of three years.

B. Measurement of fair values

The Company measures compensation expense for stock options at their fair value determined using Black - Scholes Model on the
date of the grant. The Company has used the assumptions adopted by the Ultimate Holding Company. The fair value of the equity
settled stock options and the assumptions used by the Ultimate Holding Company in the measurement of fair value at grant date and
measurement date are as follows:

50. Certain Shareholders have raised objections on the related party transactions entered into by Linde India Limited ("Company") with
Praxair India Private Limited (PIPL) and Linde South Asia Services Private Limited since the resolution on material related party transactions
in the 85^th AGM held on 24 June 2021 had been rejected by the shareholders. The Company has also received inquiries and information
requests from the Securities and Exchange Board of India in connection with certain related party transactions and arrangements to which
the Company has responded. Based on the legal opinions obtained by the Company, the Company is in compliance with all requirements
under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 in respect of all
related party transactions entered into by it. No related party transaction entered into by the Company has a value in excess of the
materiality threshold of 10% or more of the annual consolidated turnover of the Company. Therefore, there are no material related party
transactions entered into by the Company. In terms of the legal opinion obtained by the Company, it has applied the materiality threshold of
10% or more of the annual consolidated turnover of the Company to the value of each contract with a related party consisting of individual
or multiple transactions and not by aggregating the value of all contracts with each related party and ascertained that no shareholder
approval is required for any related party transaction in terms of Regulation 23 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations 2015, which is not "material" in nature.

In October 2023, SEBI summoned the Managing Director and the Company Secretary of the Company to appear before its Investigating
Authority ("IA") and has also summoned the Company to furnish certain information and documents, all in connection with its investigation
into financial information and business transactions of the Company. Pursuant thereto, they appeared before SEBI and also subsequently
responded to the questions with information and documents. The Investigating Officer further issued summons to Independent Directors
in January 2024 and sought responses to certain queries and also again sought additional documents and information from the Company.
Based on legal review and advice, Writ Petitions were filed in the Hon''ble Bombay High Court (one by all the three IDs and another by the
Company) seeking a quash of the aforementioned proceedings and for stay of such proceedings in the interim. While the Writ petitions
were pending hearing before the Hon''ble Bombay High Court, SEBI passed an Interim Ex Parte Order on 29^th April 2024, against which
the Company filed an appeal before the Securities Appellate Tribunal (SAT), and Hon''ble SAT set aside the Interim Ex Parte Order vide
its Order dated 22^nd May 2024 and allowed the Company to inspect documents and file its reply. Subsequently, Company inspected the
documents and made its submissions and thereafter SEBI passed an order dated July 24, 2024 (the "SEBI Order") giving its conclusion and
directions and also stated that the role/ culpability of the Directors/ Officers of the Company, if any, for issues covered under this Order,
will also be addressed separately. The directions issued in respect of assessing materiality threshold for related party transactions are
summarized below :

a. The Company shall test the materiality of future RPTs as per the threshold provided under Regulation 23(1) of the SEBI LODR
Regulations on the basis of the aggregate value of the transactions entered into with any related party in a financial year, irrespective
of the number of transactions or contracts involved.

b. In the event the aggregate value of the related party transactions, calculated as provided in clause (a), exceeds the materiality
threshold provided under Regulation 23(1), the Company shall obtain approvals as mandated under Regulation 23(4) of the SEBI
LODR Regulations.

The Company has filed an Appeal on 5^th August 2024 against the aforementioned Order of SEBI before the Securities Appellate Tribunal and
subsequent to multiple adjournments the hearing is now fixed for 10 & 11 June, 2025. Accordingly, the matter is currently sub-judice.

Management regularly evaluates the business and regulatory risks, including the above matters and it recognises the related uncertainties
around their ultimate outcomes, the impact of which, if any, is not presently ascertainable.

51. As an integral part of the JV Agreement dated 24^th March, 2020, which was duly approved by the Board of Directors of the Company on
24^th March, 2020, the Company and Praxair India Private Limited (PIPL), a fellow subsidiary, agreed to have an aligned approach towards
customers across India based on criteria like, proximity to existing plants of both the companies, incumbency, availability of technology,
availability of plant configurations or suitable product lines, ability to offer the cheapest solution, compliance with the competition law,
etc. In order to avoid conflict, new onsite air gas business with limited merchant credit is to be pursued based on factors like incumbency
or technology advantage and competitiveness and new onsite air gas business with significant merchant credit is to be pursued based on
geographical regions. Any expansions and/or renewals of existing business is guided by the principle of incumbency - where the entity
already having an existing business relationship will get to bid for any expansions and/or renewals related to such existing business.
Allocation of new merchant business between the Company and PIPL is determined on incumbency and in the absence of incumbency

it is determined on geographical basis, and this has been enunciated in the JV agreement. Accordingly, the Company will handle new

51. (Contd..)

merchant business exclusively in Eastern India, Northern India, and Western India (excluding Industrial Bulk Business in Maharashtra)
whilst PIPL will handle new merchant business in South India, Central India and in the Industrial Bulk Business in Maharashtra. Further, the
project engineering business was agreed to be pursued solely by the company and the CO2 and HYCO & PST business was agreed to be
pursued solely by PIPL. The allocation of business has been agreed mutually in a transparent and equitable manner and is based on sound
business principles, efficiency of logistics and judgement. The Board and the Management have ensured that the Company''s legitimate
business interests have been sufficiently protected and are not jeopardized due to such allocation. SEBI, vide its Order dated July 24, 2024
was of the view that (a) this business allocation, though characterized as a division of future business rather than a current transaction,
effectively alters the distribution of business opportunities between the related parties; (b) such arrangements can result in a redistribution
of corporate business and opportunities that would otherwise benefit the company; (c) this seemingly benign but arbitrary reallocation
of business presents a potential risk to the future growth prospects of the Company, which may not serve the best interests of the public
shareholders. In SEBI''s view, transactions of this nature must be subjected to rigorous scrutiny and require approvals akin to traditional
RPTs to ensure that investor interests are safeguarded. It also held that the business allocation between the Company and PIPL prima facie
constitutes a transfer of resources by a listed company to a related party and that this transfer should have been preceded by a valuation
exercise or financial impact analysis to enable the Board of the Company to make an informed decision.

The directions issued in respect of JV agreement and allocation of business between the Company and PIPL are summarized below:

a. NSE shall appoint a registered valuer to carry out a valuation of the business foregone and received, including by way of geographic
allocation, in terms of Annexure IV of the JV&SHA.

b. NSE shall share the valuation report received from the valuer appointed in compliance with the directions contained in this Order with
the Company and SEBI.

c. The Company shall within two weeks of receiving the valuation report place it before the Audit Committee and the Board.

d. The Company shall make a disclosure on the stock exchanges providing a summary of the key observations in the valuation report
along with management comments on the same.

SEBI, in its order dated July 24, 2024, has also stated that in respect of the allegations concerning the business allocation under the JV&SHA,
further course of action will be determined post receipt of the valuation report and that the role/ culpability of the Directors/ Officers of the
Company, if any, for issues covered under this Order, will also be addressed separately.

The Company has filed an Appeal on 5^th August 2024 against the aforementioned Order of SEBI before the Securities Appellate Tribunal and
subsequent to multiple adjournments the hearing is now fixed for 10 & 11 June, 2025. Accordingly, the matter is currently sub-judice.

Pursuant to the aforementioned SEBI order dated July 24, 2024, NSE appointed a valuer to carry out the valuation against which the
Company additionally approached SAT for stay on the said valuation exercise which was rejected by SAT vide its order dated September 13,
2024. Subsequently, the Company appealed before the Hon''ble Supreme Court against the SAT order dated September 13, 2024 which was
rejected by Hon''ble Supreme Court vide its order dated September 23, 2024. The valuer appointed by NSE commenced the valuation exercise
and the information shared with the valuer shall be treated as Unpublished Price Sensitive Information. SEBI subsequently, communicated
about a change in registered valuer which had been objected by the Company. On 12 February 2025 the matter was heard by the Tribunal.
On 17 April 2025 the Tribunal confirmed the appointment of new valuer and advised the Company to provide the information/data to the
Valuer within six (6) weeks from the date of hearing. The Company is in the process of collating and sharing the information with the Valuer.

Management regularly evaluates the business and regulatory risks, including the above matters and it recognises the related uncertainties
around their ultimate outcomes, the impact of which, if any, is not presently ascertainable.

52. Dividends

The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the
Company. On 23 May 2025, the Board of Directors of the Company have proposed a dividend of Rs. 12 per share including a special
dividend of Rs. 7.50 per share for the year ended 31 March 2025, subject to the approval of shareholders at the Annual General Meeting. If
approved, the dividend would result in a cash outflow of Rs. 1,023.41 million.

53. The standalone financial statements for the year ended 31 March 2025 were approved by the Board of directors and authorized for
issue on 23 May 2025.

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of Board of Directors of
(Firm Registration Number: 304026E/E300009) Linde India Limited

CIN: L40200WB1935PLC008184

PRAMIT AGRAWAL M DEVINE A BANERJEE S R AMARTHALURU

Partner Chairman Managing Director Director

Membership Number: 099903 DIN : 10042702 DIN : 08456907 DIN :0008231 3

N KJUMRANI ADHANUKA

Place: Bengaluru Chief Financial Officer Company Secretary

Date: 23 May 2025 ACA: 065258 ACS: 23872

---

Mar 31, 2024

The Company applies the expected credit loss ("ECL") model for measurement and recognition of impairment loss on trade receivables. For this purpose, the Company follows a "simplified approach" for recognition of impairment loss allowance on the trade receivable balances. As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forwardlooking estimates. Further, need for incremental provisions have been evaluated on a case to case basis considering forward-looking information based on the financial health of a customer if available, litigations/disputes etc. Refer note 42(ii).

v) Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividend and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholders on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

18 B. Nature and purpose of reserves

(a) Securities Premium

Securities premium is used to record premium received on issue of shares. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013 (the "Companies Act").

(b) General Reserve

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013 the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. There is no movement in general reserve during the current and previous period.

(c) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(d) Equity instruments through Other Comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at fair value through Other Comrehensive Income, net of amounts reclassified, If any, to Retained Earnings when those instruments are disposed off.

(e) Stock Options outstanding account

Certain employees are issued stock options, restricted stock units and performance stock units by Linde PLC. Refer Note 48 for details.

(b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period which ranges from 1 year to 2 years.

(c) Provision for contingencies

Provision is the estimate towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for. The timing and probability of outflow and expected reimbursements, if any with regard to these matters depend on the ultimate outcome of the legal process or settlement/ conclusion of the matter with relevant authorities/ customers/ vendors etc.

The Company has elected to exercise lower tax rate of 22% (effective rate of 25.168%) permitted under the new tax rate regime under section 115BAA of the Income tax Act, 1961 for the tax year beginning 1 April 2022 and accordingly the income tax has been computed based on this new rate. Also, based on this new rate, the deferred tax assets & liabilities have been re-measured using this lower rate.

33. Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013 a CSR committee has been formed by the Company. The funds were utilised throughout the year on the activities which are specified in Schedule VII of the Act. The utilisation is done by way of direct contribution & through the implementing agency towards aforesaid activities.

36. Contingent liabilities Contingencies:

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following are the description of claims and assertions where a potential loss is possible, but not probable.

Litigations :

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature other than those described below.

a) Excise Duty and Service Tax

As at 31 March 2024, there were pending litigations for various matters relating to excise duty and service tax involving demands of Rs. 333.17 million (31 Mar 2023: 333.59 million).

b) Sales Tax /VAT

As at 31 March 2024, the sales tax demands that are being contested by the Company amounted to Rs. 196.06 million (31 Mar 2023: Rs. 676.65 million).

c) Income Tax

As at 31 March 2024, there were pending matters / cases relating to Income Tax for various assessment years aggregating to Rs. 274.43 million (31 Mar 2023: Rs. 150.00 million).

d) Other claims

Other amounts for which the Company may contingently be liable aggregate to Rs 6.60 million (31 Mar 2023: Rs. 6.60 million).

It is not practicable for the company to estimate the closure of the above mentioned issues and the consequential timings of cash flows, if any, in respect of the above.

37. Commitments
Amount in Rs. million	As at 31 Mar 2024	As at 31 Mar 2023
Estimated capital commitments [Net of Advance of Rs. NIL (31 March 2023: Rs. NIL )] remaining to be executed and not provided for	253.35	364.45

38. Employee Benefits

i) Defined Contribution Plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and Pension Fund, which is a defined contribution plan. The company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The only amounts included in the balance sheet are those relating to the prior months contribution that are not due to be paid until the end of reporting period. The amount recognised as an expense towards contribution to Provident Fund and Pension Fund for the year aggregated to Rs. 24.94 million (Fifteen months ended 31 Mar 2023: Rs. 26.89 million).

ii) Defined Benefit Plan Description of Plans

Retirement Benefit Plans of the Company include Gratuity, Pension and Post retirement medical benefits.

Gratuity & Pension

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. Gratuity is funded through direct investment under Indian Oxygen Limited Executive and Graded-Staff Gratuity Funds. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

Investments of Pension for some employees are managed through Company managed trust.

Post retirement medical benefits

Under this unfunded scheme, employees of the Company receive medical benefits subject to certain limits on amounts of benefits, periods after retirement and types of benefits, depending on their grade and location at the time ofretirement. The Company accounts for the liability for post-retirement medical scheme based on an actuarial valuation.

Governance

The trustees of the trust fund are responsible for the overall governance of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. They are tasked with periodic reviews of the solvency of the fund and play a role in the long-term investment, risk management and funding strategy.

Investment Strategy

The Company''s investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. The plans expose the Company to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and inflation risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/ highquality bond yields; 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.

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.

Inflation 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 Company has developed policy guidelines for the allocation of assets to different classes with the objective of controlling risk and maintaining the right balance between risk and long term returns in order to limit the cost to the Company of the benefits provided.

The sensitivity analysis above have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

The sensitivity analysis above have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

40. Capital management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company. The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short term bank borrowings on need basis, if any. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and cash equivalents.

The Company does not have any debt as at the reporting date and hence debt to equity ratio is Nil.

b) Fair value measurements

The fair value of financial instruments as referred to in note above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

a) Level 1: Quoted prices for identical instruments in an active market -

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares.

b) Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs -

This level of hierarchy includes financial assets and liabilities, measured using inputs other than the quoted prices included within level 1 that are observables for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company''s derivative contracts.

c) Level 3: Inputs which are not based on observable market data -

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor they are based on available market data.

i) The Company has assessed that cash and bank balances, trade receivables, trade payables, and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

iii) There have been no transfers between Level 1, level 2 and Level 3 for the year/period ended 31 March 2024/31 March 2023.

42. Financial Risk Management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk:

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy

a) Market risk - Foreign currency exchange rate risk:

The Company enter into sale and purchase transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Management monitors the movement in foreign currency and the Company''s exposure in each of the foreign currency. Based on the analysis and study of movement in foreign currency, the Company takes remidial measures to hedge foreign currency risk through various measures like derivative instruments etc.

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an decrease in the Company''s net profit before tax by approximately Rs.53.16 million (Fifteen months ended 31 March 2023 : Rs.38.12 million).

b) Market risk - Interest rate risk: Interest rate risk is the risk that the fair value or future cashflow of a financial instrument will fluctuate because of change in market interest rate. The company does not have any borrowings, hence there is no exposure to interest rate risk.

ii) Counter-party credit risk:

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentrations of credit risk, principally consist of Cash & bank balances, trade receivables, finance receivables and loans and advances. Company regularly reviews the credit limits of the customers and takes action to reduce the risk. Further diverse and large customer bases also reduces the risk. All trade receivables are reviewed and assessed for default on regular basis.

Customer credit risk is managed by the Company through established policy and procedures and controls relating to customer credit risk management. To calculate ECL, the company groups its trade receivables by customer type i.e. receivables from Gases (separately for healthcare and non healthcare) and receivables from Project Engineering division. In addition the Company also assesses receivable from related parties separately. The company applies the simplified approach to determine the ECL for trade receivables. The historical loss rates for receivable from gases are given below :

The Company has evaluated that there are no material loss allowances for Project Engineering and related party receivables. The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.

iii) Liquidity risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital lines from various banks and inter-company borrowing. The Company invests its surplus funds in bank fixed deposits, which carry no or low market risk. The Company''s liquidity position remains strong at Rs. 9,798.32 million as at 31 March 2024 (31 March 2023 : Rs. 11,914.93 million), comprising of cash and cash equivalents and other balances with banks (including earmarked balances).

43. Segment information

a) Gases, related products & services from which reportable segments derive their revenues:

Information reported to the Chief Operating Decision Maker (CODM) for the puspose of resource allocation and assessment of segment performance is based on product and services. Accordingly, management of the company has chosen to organise the segment based on its products and services as follows:

- Gases, Related Products & Services

- Project Engineering

The company''s chief operating decision maker is the Managing Director.

Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

The company''s financing and income taxes are managed on a company level and are not allocated to operating segments. Inter-segment revenue has been recognised at cost.

The Company operates predominantly within the geographical limits of India. In the company''s operations within India, there is no significant difference in the economic condition prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous period. Hence, disclosures on geographical information are not applicable.

e) Information about major customers

Included in the revenue arising from direct sales of products and services of Rs. 27,683.79 million (Fifteen months ended 31 Mar 2023: Rs. 31,338.00 million) are revenues of approximately Rs. 9,580.42 million (Fifteen months ended 31 March 2023: Rs. 8,845.99 million) which arose from the sale to company''s top two customers. No other single customer contributed 10% or more of the company''s revenue for the year ended 31 Mar 2024 and fifteen months period ended 31 Mar 2023.

(i) The figures in brackets pertains to the 15 months ended March 2023

(ii) The company''s related party transactions during the year ended 31 March 2024 and fifteen months period ended 31 March 2023 are at arms length and in the ordinary couse of business. Outstanding balances at the year-end are unsecured and interest-free and settlement occurs in cash. All related party balances at year end are considered good and no provision for bad or doubtful debts due from related parties was made during the current year/prior period.

(iii) The details of the remuneration to independent directors has been specified in Note 32.

45. Leases

I. As a Lessor (IND AS 116)

The following is the summary of future minimum lease rental payments under non-cancellable operating leases and finance leases entered into by the Company.

A. Operating leases as a lessor:

Significant leasing arrangements include lease of plant and machinery for use under long term arrangements for periods ranging between 10 to 20 years with renewal option.

Lease income recognised during the year is Rs 680.70 million (Fifteen months ended 31 Mar 2023: Rs 844.35 million)

B. Finance leases as a lessor:

Certain plant and machinery has been made available by the Company to the customers under a finance lease arrangement.

The arrangements covers a substantial part of the economic life of the underlying asset and contain a renewal option on expiry. Receivables under long term arrangements involving use of dedicated assets are based on the underlying contractual terms and conditions. Any change in the assumptions may have an impact on lease assessment and/or lease classification.

Such assets given under the lease arrangement have been recognised, at the inception of the lease as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease. The income arising on account of finance lease arrangement is Rs 1.69 million (Fifteen months ended 31 March 2023: Rs. 3.88 million).

48. Share-based payments

A. Description of share-based payment arrangements

Linde PLC, under Long Term Incentive Plan, permits the grant of Non-qualified Stock Options, Restricted Stock Units and Performance stock Units.

(i) Stock Options

Stock options which are equity settled options, is granted, subject to the terms and provisions of the Plan, to participants as determined by the Committee, in its sole discretion. Each option granted shall be evidenced by an award agreement that shall specify the option price, the term of the option, the number of shares to which the option pertains, the conditions, including any performance goals, upon which an option shall become vested and exercisable, and such other terms and conditions as the committee shall determine which are not inconsistent with the terms of the Plan.

Awards of options shall be solely subject to the continued service of the Participant and shall become exercisable no earlier than three years after the grant date, provided that such option may partially vest after no less than one year following such grant date; and any other award of options shall become exercisable no earlier than one year after the grant date.

The exercise price is the fair value of shares on the date of the grant. The Options vests in a graded manner over a period of three years. Under the Plan, employees have the following options:

a) Exercise and Hold - The employees need to pay the exercise cost.

b) Exercise and Sell - The net proceeds (proceeds from sale of shares at fair maket value minus the exercise price) is paid to the employee.

c) Exercise and Sell to cover - The employees sells shares to the extent of exercise cost.

d) Exercise and Net Shares - The Group witholds the shares to cover the exercise cost and remaining shares are credited to the employees account.

Typically employees avail option (b) above and consequently the net proceeds is directly paid by the Company to the employees based on communication from Group''s stock option plan service provider.

(ii) Performance and Restricted Stock awards (PSU and RSU)

PSU and RSU which are equity settled options are granted under the 2009 Plan to senior level executives that vest over a period of three years. The exercise price is Nil. Linde Plc cross charges the amount to the Company, determined based on the fair value of the shares on exercise of PSU and RSU at the end of three years.

50. Certain Shareholders have raised objections on the related party transactions entered into by Linde India Limited ("Company") with Praxair India Private Limited (PIPL) and Linde South Asia Services Private Limited since the resolution on material related party transactions in the 85th AGM held on 24 June 2021 had been rejected by the shareholders. The Company has also received inquiries and information requests from the Securities and Exchange Board of India in connection with certain related party transactions and arrangements to which the Company has responded. Based on the legal opinion obtained by the Company, the Company is in compliance with all requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 in respect of all related party transactions entered into by it. No related party transaction entered into by the Company has a value in excess of the materiality threshold of 10% or more of the annual consolidated turnover of the Company. Therefore, there are no material related party transactions entered into by the Company. In terms of the legal opinion obtained by the Company, it has applied the materiality threshold of 10% or more of the annual consolidated turnover of the Company to the value of each contract with a related party consisting of individual or multiple transactions and not by aggregating the value of all contracts with each related party and ascertained that no shareholder approval is required for any related party transaction in terms of Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, which is not "material" in nature.

In October 2023, SEBI summoned the Managing Director and the Company Secretary of the Company to appear before its Investigating Authority ("IA") and has also summoned the Company to furnish certain information and documents, all in connection with its investigation into financial information and business transactions of the Company on the basis that there is a reasonable ground to believe that the disclosure of financial information and the business transactions have been dealt with in a manner which may be detrimental to investors or the securities markets; and/or an intermediary or person associated with the securities market and may have violated the provisions of the Securities Exchange Board of India Act, 1992 or Securities Contracts (Regulation) Act, 1956 or SEBI (PFUTP) Regulations, 2003 or SEBI (LODR) Regulations, 2015. Pursuant thereto, they appeared before SEBI and also subsequently responded to the questions with information and documents. The Investigating Officer further issued summons to Independent Directors in January'' 2024 and sought responses to certain queries and also again sought additional documents and information from the Company. Based on legal review and advice, Writ Petitions have been filed in the Hon''ble Bombay High Court (one by all the three IDs and another by the Company) seeking a quash of the aforementioned proceedings and for stay of such proceedings in the interim. Both these Writ Petitions have been directed to be clubbed and taken up for hearing by the Hon''ble Bombay High Court. Both the matters are yet to be heard by the Hon''ble Bombay High Court. In the meantime, the Company and Independent Directors had furnished all information & answers to the questions sought by SEBI in the month of Feb''24. While the Writ petitions are pending hearing before the Hon''ble Bombay High Court, SEBI had passed an Interim Ex Parte Order on 29th Apr''24 with certain directions as given below. The Company had filed an appeal before the Securities Appellate Tribunal (SAT) against the said order on 13th May''24. The appeal was heard in detail on 16th & 17th May 2024. Pursuant thereto, the Hon''ble SAT was pleased to set aside the Interim Ex Parte Order vide its Order dated 22nd May 2024.

The Gist of SEBI''s Interim Ex Parte Order dated 29th April''24 is given below:

a. The Company shall test the materiality of future RPTs as per the threshold provided under Regulation 23(1) of the SEBI LODR Regulations on the basis of the aggregate value of the transactions entered into with any related party in a financial year, irrespective of the number of transactions or contracts involved.

b. In the event the aggregate value of the related party transactions, calculated as provided in clause (a), exceeds the materiality threshold provided under Regulation 23(1), the Company shall obtain approvals as mandated under Regulation 23(4) of the SEBI LODR Regulations.

The relevant extract of SAT Order dated 22nd May''24 is given below:

a. Appeal is allowed

b. Order dated 29th April 2024 is set aside

c. Without Notice, appellate shall appear before the SEBI on 27th May 2024 for inspection of documents, if any, required and file its reply within one week from the date inspection/supply of documents

d. SEBI is directed to grant inspection and supply documents immediately

e. No costs

f. All pending miscellaneous applications stands disposed of.

Management regularly evaluates the business and regulatory risks, including the above matters and it recognises the related uncertainties around their ultimate outcomes, the impact of which, if any, is not presently ascertainable.

51 . As an integral part of the JV Agreement dated 24th March, 2020, which was duly approved by the Board of Directors of the Company on

24th March, 2020, the Company and Praxair India Private Limited (PIPL), a fellow subsidiary, agreed to have an aligned approach towards

customers across India based on criteria like, proximity to existing plants of both the companies, incumbency, availability of technology, availability of plant configurations or suitable product lines, ability to offer the cheapest solution, compliance with the competition law, etc. Further, in order to avoid conflict, the overlapping merchant air gas business of the Company and PIPL is geographically divided, and the on-site air gas business is divided based on incumbency, merchant priority and the respective parties'' ability to offer competitive solutions to their respective customers. Further, the project engineering business was agreed to be pursued solely by the Company and the CO2 and HYCO business was agreed to be pursued solely by PIPL. Any expansions and/or renewals of existing business is guided by the principle of incumbency - where the entity already having an existing business relationship will get to bid for any expansions and/or renewals related to such existing business. Allocation of new business between the Company and PIPL is determined on a geographical basis and this has been enunciated in the JV agreement. Accordingly, the Company will handle new business exclusively in Eastern India, Northern India, and Western India (excluding Industrial Bulk Business in Maharashtra) whilst PIPL will handle new business in South India, Central India and in the Industrial Bulk Business in Maharashtra. The allocation of business has been agreed mutually in a transparent and equitable manner and is based on sound business principles, efficiency of logistics and judgement. The Board and the Management have ensured at all times that the Company''s legitimate business interests have been sufficiently protected and are not jeopardized due to such allocation. SEBI, vide its Interim Ex Parte Order was of the view that the business allocation effectively led to redistribution of business opportunities, potentially hampering the Company''s growth prospects, which would not be in the best interest of public shareholders. In SEBI''s view, the effect of relinquishment of its rights to undertake certain business in the future (along with the consequent growth, cash flows and earnings) was synonymous to that of a transfer of resources/business to a related party; accordingly it would require similar approvals as traditional RPTs. SEBI also directed that a Valuer be appointed by the National Stock Exchange of India to issue a Report to the Company''s Board on the valuation of the forgone and received business pursuant to the Business Allocation. As stated earlier, the said Interim Ex Parte Order has been set aside by SAT, vide, its aforementioned Order dated 22nd May''24.

Management regularly evaluates the business and regulatory risks, including the above matters and it recognises the related uncertainties around their ultimate outcomes, the impact of which, if any, is not presently ascertainable.

52. Dividends

The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the Company. On 28 May 2024, the Board of Directors of the Company have proposed a dividend of Rs. 12 per share including a special dividend of Rs. 8 per share for the year ended 31 March 2024, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 1,023.41 million.

53. On account of change in financial year from calendar year (January - December) to uniform financial year (April - March), the previous year to date figures for 31 March 2023 is for fifteen months period from 1 January 2022 to 31 March 2023 and current year to date figures for 31 March 2024 is for the period of twelve months from 1 April 2023 to 31 March 2024 and hence these figures are not comparable.

54. The standalone financial statements for the year ended 31 March 2024 were approved by the Board of directors and authorized for issue on 28 May 2024.

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Mar 31, 2023

The Company applies the expected credit loss ("ECL") model for measurement and recognition of impairment loss on trade receivables. For this purpose, the Company follows a "simplified approach" for recognition of impairment loss allowance on the trade receivable balances. As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forwardlooking estimates. Further, need for incremental provisions have been evaluated on a case to case basis considering forward-looking information based on the financial health of a customer if available, litigations/disputes etc.

v) Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividend and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholders on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

18 B. Nature and purpose of reserves

(a) Securities Premium

Securities premium is used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Indian Companies Act, 2013 (the "Companies Act").

(b) General Reserve

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013 the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn. There is no movement in general reserve during the current and previous period.

(c) Retained Earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(d) Equity instruments through Other Comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at fair value through Other Comrehensive Income, net of amounts reclassified, If any, to Retained Earnings when those instruments are disposed off.

(a) Provision for asset restoration obligation

Provision is towards estimated cost to be incurred on dismantling of plants at the customers'' site upon expiry of the tenure of the contractual agreement with the customer. Such cost has been capitalised under plant and machinery.

(b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period which ranges from 6 months to 2 years.

(c) Provision for contingencies

Provision is the estimate towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for. The timing and probability of outflow and expected reimbursements, if any with regard to these matters depend on the ultimate outcome of the legal process or settlement/ conclusion of the matter with relevant authorities/ customers/ vendors etc.

37. Contingent liabilities

Contingencies:

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following are the description of claims and assertions where a potential loss is possible, but not probable.

Litigations :

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature other than those described below.

a) Excise Duty and Service Tax

As at 31 March 2023, there were pending litigations for various matters relating to excise duty and service tax involving demands of Rs. 333.59 million (31 Dec 2021 : Rs. 304.62 million).

b) Sales Tax /VAT

As at 31 March 2023, the sales tax demands that are being contested by the Company amounted to Rs. 676.65 million (31 Dec 2021: Rs. 650.82 million). The details of demand for more than Rs. 100 million are as follows:

As on 31st March 2023 Sales tax Authority have raised demand of Rs. 508.54 million for the period 2008-09 to 2017-18 (31 Dec 2021: Rs. 508.54 million) on account of non levy of sales tax for facility charges recovered from a customer for providing pipeline infrastructure at their premises. Company has contested the demand and currently the matter is at appellate stage. It is reimbursable by the customer as per agreement.

c) Income Tax

As at 31 March 2023, there were pending matters / cases relating to Income Tax for various assessment years aggregating to Rs. 150.00 million (31 Dec 2021: Rs. 150.00 million).

d) Other claims

Other amounts for which the Company may contingently be liable aggregate to Rs. 6.60 million (31 Dec 2021: Rs. 6.60 million).

It is not practicable for the company to estimate the closure of the above mentioned issues and the consequential timings of cash flows, if any, in respect of the above.

39. Employee Benefits

i) Defined Contribution Plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and Pension Fund, which is a defined contribution plan. The company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The only amounts included in the balance sheet are those relating to the prior months contribution that are not due to be paid until the end of reporting period. The amount recognised as an expense towards contribution to Provident Fund and Pension Fund for the year aggregated to Rs. 26.89 million (31 Dec 2021: Rs. 22.08 million).

ii) Defined Benefit Plan Description of Plans

Retirement Benefit Plans of the Company include Gratuity, Pension and Post retirement medical benefits.

Gratuity & Pension

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lumpsum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. Gratuity is funded through direct investment under Indian Oxygen Limited Executive and Graded-Staff Gratuity Funds. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

Investments of Pension for some employees are managed through Company managed trust.

Post retirement medical benefits

Under this unfunded scheme, employees of the Company receive medical benefits subject to certain limits on amounts of benefits, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. The Company accounts for the liability for postretirement medical scheme based on an actuarial valuation.

Governance

The trustees of the trust fund are responsible for the overall governance of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. They are tasked with periodic reviews of the solvency of the fund and play a role in the long-term investment, risk management and funding strategy.

Investment Strategy

The Company''s investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. The plans expose the Company to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and inflation risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/highquality bond yields; 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.

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.

Inflation 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 Company has developed policy guidelines for the allocation of assets to different classes with the objective of controlling risk and maintaining the right balance between risk and long term returns in order to limit the cost to the Company of the benefits provided.

41. Capital management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company. The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short term bank borrowings on need basis, if any. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and cash equivalents.

The Company does not have any debt as at the reporting date and hence debt to equity ratio is Nil.

42. Financial Instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 (u).

b) Fair value measurements

The fair value of financial instruments as referred to in note above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

a) Level 1: Quoted prices for identical instruments in an active market -

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares.

b) Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs -

This level of hierarchy includes financial assets and liabilities, measured using inputs other than the quoted prices included within level 1 that are observables for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company''s derivative contracts.

c) Level 3: Inputs which are not based on observable market data -

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor they are based on available market data.

i) The Company has assessed that cash and bank balances, trade receivables, trade payables, and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

iii) There have been no transfers between Level 1, level 2 and Level 3 for the periods ended 31 March 2023 and 31 December 2021.

43. Financial Risk Management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk:

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

a) Market risk - Foreign currency exchange rate risk:

The Company enter into sale and purchase transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Management monitors the movement in foreign currency and the Company''s exposure in each of the foreign currency.

Based on the analysis and study of movement in foreign currency, the Company takes remidial measures to hedge foreign currency risk through various measures like derivative instruments etc.

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an decrease/ increase in the Company''s net profit before tax by approximately Rs.38.12 million (31 Dec 2021 : Rs.40.43 million).

b) Market risk - Interest rate risk: Interest rate risk is the risk that the fair value or future cashflow of a financial instrument will fluctuate because of change in market interest rate. The company does not have any borrowings, hence there is no exposure to interest rate risk.

ii) Counter-party credit risk:

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to concentrations of credit risk, principally consist of Cash & bank balances, trade receivables, finance receivables and loans and advances. Company regularly reviews the credit limits of the customers and takes action to reduce the risk. Further diverse and large customer bases also reduces the risk. All trade receivables are reviewed and assessed for default on quarterly basis.

The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.

iii) Liquidity risk:

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital lines from various banks and inter-company borrowing. The Company invests its surplus funds in bank fixed deposits, which carry no or low market risk. The Company''s liquidity position remains strong at Rs. 11,914.93 million as at 31 March 2023 (31 December 2021 : Rs. 9,879.73 million), comprising of cash and cash equivalents and other balances with banks (including earmarked balances).

44. Segment information

a) Gases, related products & services from which reportable segments derive their revenues:

Information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment performance is based on product and services. Accordingly, management of the company has chosen to organise the segment based on its products and services as follows:

- Gases, Related Products & Services

- Project Engineering

The company''s chief operating decision maker is the Managing Director.

Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

The company''s financing and income taxes are managed on a company level and are not allocated to operating segments.

Inter-segment revenue has been recognised at cost.

The Company operates predominantly within the geographical limits of India. In the company''s operations within India, there is no significant difference in the economic condition prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous period. Hence, disclosures on geographical information are not applicable.

e) Information about major customers

Included in the revenue arising from direct sales of products and services of Rs. 31,338.00 million (31 Dec 2021: Rs. 21,115.38 million) are revenues of approximately Rs. 8,845.99 million (31 Dec 2021: Rs. 5,468.21 million) which arose from the sale to company''s top two customers. No other single customer contributed 10% or more of the company''s revenue for fifteen months period ended 31 Mar 2023 & year ended 31 Dec 2021.

Note: The accounting policies of the reportable segments are same as of the companies accouting policies. Refer Note 2 (z)

B. Finance leases as a lessor:

Certain plant and machinery has been made available by the Company to the customers under a finance lease arrangement. The arrangements covers a substantial part of the economic life of the underlying asset and contain a renewal option on expiry. Receivables under long term arrangements involving use of dedicated assets are based on the underlying contractual terms and conditions. Any change in the assumptions may have an impact on lease assessment and/or lease classification.

Such assets given under the lease arrangement have been recognised, at the inception of the lease as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease. The income arising on account of finance lease arrangement is Rs 3.88 million (31 Dec 2021: Rs. 4.20 million).

49 Share-based payments

A. Description of share-based payment arrangements

Linde PLC, under Long Term Incentive Plan, permits the grant of Non-qualified Stock Options, Restricted Stock Units and Performance stock Units.

(i) Stock Options

Stock options which are equity settled options, is granted, subject to the terms and provisions of the Plan, to participants as determined by the Committee, in its sole discretion. Each option granted shall be evidenced by an award agreement that shall specify the option price, the term of the option, the number of shares to which the option pertains, the conditions, including any performance goals, upon which an option shall become vested and exercisable, and such other terms and conditions as the committee shall determine which are not inconsistent with the terms of the Plan.

Awards of options shall be solely subject to the continued service of the Participant and shall become exercisable no earlier than three years after the grant date, provided that such option may partially vest after no less than one year following such grant date; and any other award of options shall become exercisable no earlier than one year after the grant date.

The exercise price is the fair value of shares on the date of the grant. The Options vests in a graded manner over a period of three years. Under the Plan, employees have the following options:

a) Exercise and Hold - The employees need to pay the exercise cost.

b) Exercise and Sell - The net proceeds (proceeds from sale of shares at fair maket value minus the exercise price) is paid to the employee.

c) Exercise and Sell to cover - The employees sells shares to the extent of exercise cost.

d) Exercise and Net Shares - The Group witholds the shares to cover the exercise cost and remaining shares are credited to the employees account.

Typically employees avail option (b) above and consequently the net proceeds is directly paid by the Company to the employees based on communication from Group''s stock option plan service provider.

(ii) Performance and Restricted Stock awards (PSU and RSU)

PSU and RSU which are equity settled options are granted under the 2009 Plan to senior level executives that vest over a period of three years. The exercise price is Nil. Linde Plc cross charges the amount to the Company, determined based on the fair value of the shares on exercise of PSU and RSU at the end of three years.

51. Certain Shareholders have raised objections on the related party transactions entered into by Linde India Limited ("Company") with Praxair India Private Limited and Linde South Asia Services Private Limited since the resolution on material related party transactions in the 85th AGM held on 24 June 2021 had been rejected by the shareholders. The Company has also received inquiries and information requests from the Securities and Exchange Board of India in connection with certain related party transactions and arrangements to which the Company has been responding. Based on the legal opinion obtained by the Company, the Company is in compliance with all requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 in respect of all related party transactions entered into by it. No related party transaction entered into by the Company has a value in excess of the materiality threshold of 10% or more of the annual consolidated turnover of the Company. Therefore, there are no material related party transactions entered into by the Company. In terms of the legal opinion obtained by the Company, it has applied the materiality threshold of 10% or more of the annual consolidated turnover

of the Company to the value of each of the related party transactions and not by aggregating the value of all related party transactions it has entered into and ascertained that no shareholder approval is required for any related party transaction in terms of Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, which is not "material" in nature.

Management regularly evaluates the business and regulatory risks, including the above matters and it recognises the related uncertainties around their ultimate outcomes, the impact of which, if any, is not presently ascertainable.

52. Dividends

The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the Company. On 23 May 2023, the Board of Directors of the Company have proposed a dividend of Rs. 12 per share including a special dividend of Rs. 7.50 per share in respect of fifteen months period ended 31 March 2023, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 1023.41 million.

53. The Board of Directors at its meeting held on 14 November 2022 approved the change of financial year of the Company from calendar year (January - December) to uniform financial year (April - March). The company has also obtained necessary approval from the Regional Director, Eastern Region, Ministry of Corporate Affairs on 29 March 2023. Accordingly the current financial year comprises 15 months period from 1 January 2022 to 31 March 2023 and hence the figures are not comparable with the previous financial year which is for 12 months.

54. Previous year figures have been regrouped wherever necessary as required as per revised schedule III amendments which are applicable to the company for the period commencing from 1 January 2022.

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Dec 31, 2018

1. Company Overview

Linde India Limited is a public company having Corporate Identity Number L40200WB1935PLC008184. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Company is primarily engaged in manufacture of industrial and medical gases and construction of cryogenic and non-cryogenic air separation plants.

The functional and presentation currency of the Company is Indian Rupee (“Rs.”).

As on 31 December 2018, The BOC Group United Kingdom owns 75% of the ordinary shares of the company and has the ability to control the company’s operations.

The financial statement for the year ended 31 December 2018 were approved by the Board of directors and authorized for issue on 19 February 2019.

2. New amendment that is not yet effective and have not been early adopted

Recently issued Accounting Standards

IndAS 115- “Revenue from Contracts with Customers”

Ind AS 115 establishes a single model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard, Ind AS 18 “Revenue” and Ind AS 11 “Construction Contracts” when it becomes effective.

The core principle of Ind AS115is that, an entity should recognize revenue to depict the transfer of promised goods and services to customers in an account that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. The new standard also requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue.

The Company is in the process of evaluating the impact of adoption of Ind AS 115on its financial statements.

3. Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting principles which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. 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 the revision and future periods if the revision affects both current and future periods.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

i) Useful life of Property, Plant and Equipment and Intangible assets

The Company has made in the process of applying its accounting policies that have a significant effect on the amounts recognised in these financial statements pertain to useful life of Property, Plant and Equipment and Intangible assets. The Company is required to determine whether its intangible assets have indefinite or finite life which is a subject matter of judgement. Currently, the Intangible assets have been determined to have a finite useful life and are amortised over this useful life.

In terms of Part B of Schedule II of the Companies Act, 2013, the Company has followed the depreciation rates and depreciation method which is reviewed at each year end.

ii) Deferred tax assets

Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

iii) Claims, Provisions and Contingent Liabilities

Contingent liabilities arising from past events the existence of which would be confirmed only on occurrence or non occurrence of one or more future uncertain events not wholly within the control of the Company. Or

Contingent liabilities where there is a present obligations but it is not probable that economic benefits would be required to settle the obligations are disclosed in the financial statements unless the possibility of any outflow in settlement is remote.

Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management’s assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability. Such accruals are by nature complex and can take number of years to resolve and can involve estimation uncertainty. Information about such litigations is provided in notes to the financial statements.

iv) Impairment of Property, Plant and Equipment

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

v) Actuarial Valuation

The determination of Company’s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depends upon assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

In determining the allowances for credit losses of trade receivables, the company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. In addition to this Company provides for credit loss based on increase in credit risk on case to case basis.

Trade Receivables

Out of the Trade receivables, Rs.855.62 million as at 31 December 2018 (Rs.1,333.63 million as at 31 December 2017) is due from the Company’s major customers i.e. having more than 5% of total outstanding trade receivables. There are no other customers who represent more than 5% of the total balance of trade receivables.

ii) There is no outstanding debts due from directors or other officers of the Company.

iii) Ageing of trade receivables and credit risk arising there form as below:

5. Assets classified as held for sale

In connection with the global merger between Linde AG and Praxair Inc., the Competition Commission of India (CCI) has required divestiture of certain assets of Linde India Limited, as a condition to approving the global merger. On 14th September, 2018, the Board of Directors of the Company gave an ‘in principle’ approval for initiation of the sale process for divestment of certain identified assets of the Company. These identified assets have been treated as assets held for sale. The company is currently in negotiation with potential buyers and expect that the fair value less cost to sell of these assets will be higher than the aggregate carrying amount of Rs. 2,403.66 million.

iv) Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividend and share in the Company’s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholders on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

6A. Nature and purpose of reserves (a) Securities Premium:

Securities premium is used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Indian Companies Act, 2013 (the “Companies Act”).

(b) General Reserve:

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. There is no movement in general reserve during the current and previous year.

(c) Retained Earnings:

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(d) Equity instruments through comprehensive Income

This Reserve represents the cumulative gains (net of losses) arising on the revaluation of Equity Instruments measured at fair value through Other Comprehensive Income, net of amounts reclassified, If any, to Retained Earnings when those instruments are disposed off.

(e) Effective portion of Cash Flow Hedges:

This Reserve represents the cumulative effective portion of changes in fair value of derivatives that are designated as Cash Flow Hedges. It will be reclassified to profit or loss or included in the carrying amount of the financial asset in accordance with the company’s accounting policy.

(a) Provision for asset restoration obligation

Provision is towards estimated cost to be incurred on dismantling of plants at the customers’ site upon expiry of the tenure of the contractual agreement with the customer. Such cost has been capitalised under plant and machinery.

(b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

(c) Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/commissioning dates of an individual project have exceeded or are likely to exceed the delivery/commissioning dates and/or on the deviation in contractual performance as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

(d) Provision for contingencies

Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

The amount due to Micro and Small Enterprises as defined in “The Micro, Small and Medium Enterprise Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the company. The disclosure relating to Micro and Small Enterprises are as follows:

7. Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013 a CSR committee has been formed by the Company. The funds were utilised throughout the year on the activities which are specified in Schedule VII of the Act. The utilisation is done by way of direct contribution towards aforesaid activities.

8. Exceptional Items

Exceptional items represent severance and settlement payment for employees’ separation of Rs. Nil (31 December 2017: Rs.55.00 million)

9. Earnings per share

The following table reflects profit and shares data used in the computation of basic and diluted earnings per share.

10. Contingent liabilities

Contingencies:

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary.

The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable

The following is a description of claims and assertions where a potential loss is possible, but not probable.

Litigations:

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature other than those described below.

a) Excise Duty and Service Tax

As at 31 December 2018, there were pending litigations for various matters relating to excise duty and service taxes involving demands of Rs. 269.62 million ( asat31 December 2017: Rs. 31.73 million).

b) Sales Tax /VAT

The total sales tax demands that are being contested by the Company amounted to Rs. 728.94 million; (as at 31 December 2017: Rs. 394.97 million). The details of demand for more than Rs. 100 million are as follows:

As on 31 December 2018 Sales tax Authority have raised demand of Rs. 418.89 million for the period 2008-09 to 2014-15 ( as at 31 December 2017: Rs. 301.54 million) on account of non levy of sales tax for facility charges recovered from a customer for providing pipeline infrastructure at their premises. Company has contested the demand and currently the matter is at appellate stage.

c) Sales Tax liability transferred to a beneficiary

Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company had been transferred to an eligible beneficiary, at a discount, for which a bank guarantee had been provided by the beneficiary to ensure timely payment to the concerned authorities. The contingent liability for the same is amounted to Rs. 3.68 million ( as at 31 December 2017: Rs. 3.68 million).

d) Other claims

Other amounts for which the Company may contingently be liable aggregate to Rs. 6.60 million ( as at 31 December 2017: Rs. 4.00 million).

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

11. Employee Benefits

i) Defined Contribution Plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, Super Annuation Fund and Pension I und, which is a defined contribution plan. Ihe company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The only amounts included in the balance sheet are those relating to the prior months contribution that are not due to be paid until the end of reporting period. The amount recognised as an expense towards contribution to Provident Fund, Super Annuation Fund and Pension Fund for the year aggregated to Rs. 53.10 million ( 31 December 2017: Rs. 56.98 million) in note 28. Further, provident fund which was administered through Company’s trust for certain employees (in accordance with Provident Fund Regulation) has now been transferred to Regional Provident Fund Commissioner’s Office vide order no. R-EX/WB/CA/Rule/CC-VI/Vol-III/668 dated 15 November 2018.

ii) Defined Benefit Plan Description of Plans

Retirement Benefit Plans of the Company include Gratuity, Pension and Post retirement medical benefits.

Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. Gratuity is funded through direct investment under BOC India Gratuity Fund.. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

Investments of Pension for some employees are managed through Company managed trust.

Post retirement medical benefits

Under this unfunded scheme, employees of the Company receive medical benefits subject to certain limits on amounts of benefits, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. The Company accounts for the liability for post-retirement medical scheme based on an actuarial valuation.

Governance

The trustees of the trust fund are responsible for the overall governance of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. They are tasked with periodic reviews of the solvency of the fund and play a role in the long-term investment, risk management and funding strategy.

Investment Strategy

The Company’s investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. The plans expose the Company to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and inflation risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/high quality bond yields; 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.

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.

Inflation 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 Company has developed policy guidelines for the allocation of assets to different classes with the objective of controlling risk and maintaining the right balance between risk and long term returns in order to limit the cost to the Company of the benefits provided.

E. Assumptions

With the objective of presenting the plan assets and plan obligations of the defined benefits plans at their fair value on the Balance Sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The estimates of future salary increases, considered in actuarial valuation, takes into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Demographic Assumptions

Mortality in Service: Indian Assured Lives Mortality (2006-08) Ultimate table.

F. Sensitivity Analysis

The sensitivity of the overall plan obligations to changes in the key assumptions are:

The sensitivity analysis above have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.

D. Assumptions

With the objective of presenting the plan obligations of the defined benefits plans at their fair value on the Balance Sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The sensitivity analysis above have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year

12. Capital management

The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company. The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short term bank borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and cash equivalents.

The table below summarises the capital, net debt and net debt to equity ratio of the Company.

13. Financial Instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 (t)..

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 (s).

a) Category-wise classification of Financial instruments

The carrying value and fair values of financial instruments by class are as follows:

b) Fair value measurements

The fair value of financial instruments as referred to in note above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

a) Level 1: Quoted prices for identical instruments in an active market-

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares..

b) Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs-

This level of hierarchy includes financial assets and liabilities, measured using inputs other than the quoted prices included within level 1 that are observables for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company’s derivative contracts.

c) Level 3: Inputs which are not based on observable market data -

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor they are based on available market data.

i) The fair values of investment in quoted investment in equity shares is based on the current bid price of respective investment as at the Balance Sheet date.

ii) The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates.

iii) The Company assessed that cash and bank balances, trade receivables, trade payables, short term borrowings and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

iv) Fair value of borrowings which have a quoted market price in an active market is based on its market price which is categorised as level 1. Fair value of borrowings which do not have an active market or are

unquoted is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar maturities which is categorised as level 2 in the fair value hierarchy.

v) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

vi) There have been no transfers between Level 1, level 2 and Level 3 for the years ended 31 December 2018 and 31 December 2017.

c) Derivative financial instruments

Derivative instruments used by the Company include forward exchange contracts and currency swaps. These financial instruments are utilised to hedge future transactions and cash flows and are subject to hedge accounting under Ind AS 109 “ Financial Instruments” to the extent possible. The Company does not hold or issue derivative financial instruments for trading purpose. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.

The following table sets out the fair value of derivatives held by the Company as at the end of each reporting period.

14. Financial Risk Management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk:

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

a) Market risk - Foreign currency exchange rate risk:

The Company enter into sale and purchase transactions and borrowings denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Company manages the risk from currency exposures for all major items through hedging mechanism primarily by use of forward exchange contracts.

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

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an decrease/ increase in the Company’s net profit before tax by approximately Rs.85.02 million for the year ended 31 December 2018 (31 December 2017Rs.45.01 million).

b) Market risk - Interest rate risk:

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs.

The Interest rate risk for the company is primarily mitigated by hedging through interest rate swaps which ensures fixed interest rate for the borrowed amount

Interest rate sensitivity analysis

The company manages its interest rate risk by entering into interest rate swap contracts to swap floating interest rates for fixed interest rates over the duration of its borrowings for all its foreign currency long term loans. As at 31 December 2018, for all the long term foreign currency loans, the company has an interest rate swap, wherein the floating interest rates are converted into fixed interest rates

The sensitivity analysis given below have been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

Profit for the year ended 31 December 2018 would increase/decrease by Rs. 7.50 Million (as at 31 December 2017 Rs. 12.50 Million).

Interest rate SWAP contracts

The company enters interest rate swaps to hedge interest rate risks. Under the interest rate swap contracts, the company exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the company to mitigate the risk of changing interest rates on the fair value of fixed rate debt.

The following tables details the movement in fair value and remaining terms of interest rate swap contracts at the end of the reporting period:

The interest rate swap contracts are settled on cash basis. The company settles the difference between the fixed and floating interest rate on a net basis. The fair value on this interest rate swap contracts are included in schedule “Other financial assets/liabilities - Mark to market on derivative contracts”. The net change in fair value of the Derivative Instruments (forward exchange contracts) during the current year ended 31 December 2018 is Rs. 158.96 Million, (as at 31 December 2017 Rs. 248.27 Million).

ii) Counter-party credit risk:

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, finance receivables, loans and advances and derivative financial instruments. Company regularly reviews the credit limits of the customers and takes action to reduce the risk. Further diverse and large customer bases also reduces the risk. All trade receivables are reviewed and assessed for default on quarterly basis.

The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.

iii) Liquidity risk:

Liquidity risk is the risk that the company will face in meeting its obligations associated with its financial liabilities. The Company follows a prudent and conservative policy for safeguarding liquidity. It regularly monitors the rolling cash flow forecasts to ensure its cash flows are arranged on an on-going basis to meet operational requirement. In line with this the Company has established adequate credit facilities with banks to cater to manage the liquidity requirement. Short-term and medium term liquidity are supported through the bank and intercompany borrowing at a competitive rates.

15. Segment information

a) Products and services from which reportable segments derive their revenues:

Information reported to the Chief Operating Decision Maker (CODM) for the purpose of resource allocation and assessment of segment performance is based on product and services. Accordingly, management of the company has chosen to organise the segment based on its products and services as follows;.

- Gases and Related Products

- Project Engineering

The company’s chief operating decision maker is the Managing Director.

Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

The company’s financing and income taxes are managed on a company level and are not allocated to operating segments.

Inter-segment revenue has been recognised at cost

b) Information about business segment

c) Other segment information

d) Revenue from major products

The Company operates predominantly within the geographical limits of India. In the company’s operations within India, there is no significant difference in the economic condition prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous year. Hence, disclosures on geographical segments are not applicable.

e) Information about major customers

Included in the revenue arising from direct sales of products and services of Rs. 21,909.20 million, (31 December 2017: Rs. 21,138.73 million) are revenues of approximately Rs. 7,694.61 million (31 December 2017: Rs. 7,838.86 million) which arose from the sale to company’s top two customers. No other single customer contributed 10% or more of the company’s revenue for both 2018 and 2017.

Notes:

i) Segment performance is reviewed by the CODM on the basis of profit or loss from continuing operations before other income and finance cost and tax expenses. Segment results reviewed by CODM also excludes income or expenses which are non recurring in nature or classified as exceptional.

ii) The accounting policies of the reportablesegments are same as of the companies accounting policies (Refer Note 2)

16. Information on Related Party Disclosure

A) List of Related Parties

i) Ultimate Holding Company

Linde Public Limited Company, Ireland (From 01 November 2018)

ii) Intermediate Holding Company

Linde Aktiengesellschaft, Germany (From 01 November 2018, Ultimate holding company upto 31 October 2018)

iii) Holding Company (entity having control over the Company)

The BOC Group Limited, United Kingdom

(Wholly owned Subsidiary of Linde Aktiengesellschaft, Germany)

iv) Fellow Subsidiaries and Joint Venture with whom transactions have taken place during the year

17. Leases

The following is the summary of future minimum lease rental payments under non-cancellable operating leases and finance leases entered into by the Company.

A. Operating leases as a lessor:

Significant leasing arrangements include lease of plant and machinery dedicated for use under long term arrangements for periods ranging between 12 to 20 years with renewal option. Receivable under long term arrangements involving use of dedicated assets are allocated between those relating to the right to use of assets on contractual terms and conditions. Any change in the allocation assumptions may have an impact on the lease assessment and/or lease classification.

B. Finance leases as a lessor:

Certain plant and machinery has been made available by the Company to the customers under a finance lease arrangement. The arrangements covers a substantial part of the economic life of the underlying asset and contain a renewal option on expiry. Receivables under long term arrangements involving use of dedicated assets are based on the underlying contractual terms and conditions. Any change in the assumptions may have an impact on lease assessment and/or lease classification.

Such assets given under the lease arrangement have been recognised, at the inception of the lease as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

The minimum lease receivable and the present value of minimum lease receivables in respect of arrangements classified as finance leases are as below:

C. Operating lease as a lessee:

Company has taken various residential and office premises under operating lease or leave and license agreements. There agreements are for period of 11 months to 3 years, cancellable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rental. Minimum lease payment charged during the year to the statement of profit and loss aggregated to Rs. 73.26 million ( 31 December 2017: Rs. 64.56 million)(Refer note 31).

18. Interest in Joint Venture

a) Details of the Company’s material joint venture at the end of the reporting period are as follows:

c) Company’s transaction with Bellary Oxygen Company Private Limited, being a related party during the year ended 31 December 2018 are disclosed under note 44

19. Dividends

The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the Company. On 19 February 2019 the Board of Directors of the Company have proposed a dividend of Rs. 1.50 per share in respect of the year ended 31 December 2018, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs.154.22 million inclusive of a dividend distribution tax of Rs. 26.29 million.

20. The financial statements were approved for issue by the Board of Directors on 19 February 2019.

---

Dec 31, 2017

1. Company Overview

Linde India Limited is a public company having Corporate Identity Number L40200WB1935PLC008184. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Company is primarily engaged in manufacture of industrial and medical gases and construction of cryogenic and non-cryogenic air separation plants.

The functional and presentation currency of the Company is Indian Rupee (“Rs.”).

As on 31 December 2017, Linde AG owns 75% of the ordinary shares of the company and has the ability to control the company’s operations.

The financial statement for the year ended 31 December 2017 were approved by the Board of directors and authorized for issue on 12 February 2018.

(a) Provision for asset restoration obligation

Provision is towards estimated cost to be incurred on dismantling of plants at the customers’ site upon expiry of the tenure of the contractual agreement with the customer. Such cost has been capitalised under plant and machinery.

(b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

(c) Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/commissioning dates of an individual project have exceeded or are likely to exceed the delivery/commissioning dates and/or on the deviation in contractual performance as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period)

(d) Provision for contingencies

Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

2. Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013 a CSR committee has been formed by the Company. The funds were utilised throughout the year on the activities which are specified in Schedule VII of the Act. The utilisation is done by way of direct contribution towards aforesaid activities.

3. Exceptional Items

Exceptional items represent severance and settlement payment for employees’ separation of Rs. 55.00 million (Previous year Rs.Nil)

4. Earnings per share

The following table reflects profit and shares data used in the computation of basic and diluted earnings per share.

5. Contingent liabilities

Contingencies:

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary.

The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable.

Litigations:

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature, other than those described below.

a) Excise Duty and Service Tax

As at 31 December 2017, there were pending litigations for various matters relating to excise duty and service taxes involving demands of Rs. 31.73 millions (31 December 2016: Rs. 31.73 millions; 1 January 2016: Rs. 38.03 millions).

b) Sales Tax /VAT

The total sales tax demands that are being contested by the Company amounted to Rs. 394.97 millions; (31 December 2016: Rs. 277.43 millions ; 1 January 2016: Rs. 166.84 millions). The details of demand for more than Rs. 100 million are as follows:

As on 31 December 2017, Sales tax Authority have raised demand of Rs. 301.54 million for the period 2008-09 to 2013-14 (31 December 2016: Rs. 182 millions ; 1 January 2016: Rs. 86 millions) on account of non levy of sales tax for facility charges recovered from a customer for providing pipeline infrastructure at their premises. Company has contested the demand and currently the matter is at appellate stage.

c) Sales Tax liability transferred to a beneficiary

Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company had been transferred to an eligible beneficiary, at a discount, for which a bank guarantee had been provided by the beneficiary to ensure timely payment to the concerned authorities. The contingent liability for the same is amounted to Rs. 3.68 millions (31 December 2016: Rs. 3.68 millions; 1 January 2016: Rs. 9.20 millions).

d) Other claims

Other amounts for which the Company may contingently be liable aggregate to Rs. 4 millions (31 December 2016: Rs. 21.32 millions; 1 January 2016: Rs. 12.56 millions).

6. Employee Benefits

i) Defined Contribution Plan

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident fund, which is a defined contribution plan. The company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident fund for the year aggregated to Rs. 35.50 million (previous year Rs. 31.38 million). Further, provident fund administered through Company’s trust for certain employees (in accordance with Provident Fund Regulation) are in the nature of defined benefit obligations with respect to the yearly interest guarantee.

ii) Defined Benefit Plan Description of Plans

Retirement Benefit Plans of the Company include Gratuity, Pension and Provident Fund.

Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. Gratuity is funded through direct investment under BOC India Gratuity Fund.. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

Investments of Pension (Graded Staff Pension) for some employees are managed through Company managed trust. Provident Fund for most of the employees are managed through trust investments and for some employees through government administered fund.

Post retirement medical benefits

Under this unfunded scheme, employees of the Company receive medical benefits subject to certain limits on amounts of benefits, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. The Company accounts for the liability for post-retirement medical scheme based on an actuarial valuation.

Governance

The trustees of the trust fund are responsible for the overall governance of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. They are tasked with periodic reviews of the solvency of the fund and play a role in the long-term investment, risk management and funding strategy.

Investment Strategy

The Company’s investment strategy in respect of its funded plans is implemented within the framework of the applicable statutory requirements. The plans expose the Company to a number of actuarial risks such as investment risk, interest rate risk, longevity risk and inflation risk.

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government/high quality bond yields; 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.

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.

Inflation 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 Company has developed policy guidelines for the allocation of assets to different classes with the objective of controlling risk and maintaining the right balance between risk and long term returns in order to limit the cost to the Company of the benefits provided.

The sensitivity analysis above have been determined based on reasonable possible changes of the respective assumptions occurring at the end of the year and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the Balance Sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous year.

7. Capital management

The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company. The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short bank borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. Net debt includes interest bearing borrowings less cash and cash equivalents.

8. Financial Instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 (s).

a) Category-wise classification of Financial instrumnets

The carrying value and fair values of financial instruments by class are as follows:

b) Fair value measurements

The fair value of financial instruments as referred to in note above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

a) Level 1: Quoted prices for identical instruments in an active market-

This level of hierarchy includes financial assets that are measured by reference to qouted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares.

b) Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs-

This level of hierarchy includes financial assets and liabilities, measured using inputs other than the quoted prices included within level 1 that are observables for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company’s derivative contracts.

c) Level 3: Inputs which are not based on observable market data -

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor they are based on available market data.

i) The fair values of investment in quoted investment in equity shares is based on the current bid price of respective investment as at the Balance Sheet date.

ii) The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange forward rates.

iii) The Company assessed that cash and bank balances, trade receivables, trade payables, short term borrowings and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

iv) Fair value of borrowings which have a quoted market price in an active market is based on its market price which is categorised as level 1. Fair value of borrowings which do not have an active market or are unquoted is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar maturities which is categorised as level 2 in the fair value hierarchy.

v) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

vi) There have been no transfers between Level 1, level 2 and Level 3 for the years ended 31 December 2017, 31 December 2016 and 1 January 2016.

c) Derivative financial instruments

Derivative instruments used by the Company include forward exchange contracts and currency swaps. These financial instruments are utilised to hedge future transactions and cash flows and are subject to hedge accounting under Ind AS 109 “ Financial Instruments” to the extent possible. The Company does not hold or issue derivative financial instruments for trading purpose. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.

9. Financial Risk Management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk:

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

a) Market risk - Foreign currency exchange rate risk:

The Company enter into sale and purchase transactions and borrowings denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Company manages the risk from currency exposures for all major items through hedging mechansism primarily by use of forward exchange contracts.

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

A 10% appreciation/depreciation of the foreign currencies with respect to functional currency of the Company would result in an decrease/ increase in the Company’s net profit before tax by approximately Rs.45.01 million for the year ended 31 December 2017 (31 December 2016: Rs.33.05 million) and would result in an decrease/increase in the Company’s total equity by approximately Rs. 45.01 million for the year ended 31 December 2017 (31 December 2016: Rs.33.05 million and 1 January 2016: Rs.24.06 million)

b) Market risk - Interest rate risk:

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs.

The Interest rate risk for the company is primarily mitigated by hedging through interest rate swaps which ensures fixed interest rate for the borrowed amount.

Interest rate sensitivity analysis

The company manages its interest rate risk by entering into interest rate swap contracts to swap floating interest rates for fixed interest rates over the duration of its borrowings for all its foreign currency long term loans. As at 31 December 2017, for all the long term foreign currency loans, the company has an interest rate swap, wherein the floating interest rates are converted into fixed interest rates

The sensitivity analysis given below have been determined based on the exposure to interest rates at the end of the reporting period. For floating rate liabilities the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

Profit for the year ended 31 December 2017 would increase/decrease by Rs. 12.50 Million (as at 31 December 2016 Rs. 13.80 Million).

Interest rate SWAP contracts

The company enters interest rate swaps to hedge interest rate risks. Under the interest rate swap contracts, the company exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the company to mitigate the risk of changing interest rates on the fair value of fixed rate debt.

The interest rate swap contracts are settled on cash basis. The company settles the difference between the fixed and floating interest rate on a net basis. The fair value on this interest rate swap contracts are included in schedule “Other financial assets/liabilities - Mark to market on derivative contracts”. The net change in fair value of the Derivative Instruments (forward exchange contracts) during the current year ended 31 December 2017 is Rs. 3.10 Million, (as at 31 December 2016 -Rs. 8.21 Million; as at 1 January 2016 - Rs.0.20 Million).

ii) Counter-party credit risk:

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, finance receivables, loans and advances and derivative financial instruments. Company regularly reviews the credit limits of the customers and takes action to reduce the risk. Further diverse and large customer bases also reduces the risk. All trade receivables are reviewed and assessed for default on quarterly basis. The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high credit ratings.

iii) Liquidity risk:

Liquidity risk is the risk that the company will face in meeting its obligations associated with its financial liabilities. The Company follows a prudent and conservative policy for safegaurding liquidity. It regularly monitors the rolling cash flow forecasts to ensure its cash flows are arranged on an on-going basis to meet operational requirement. In line with this the Company has established adequate credit facilities with banks to cater to manage the liquidity requirement. Short-term and medium term liquidity are supported through the bank and intercompany borrowing at a competitive rates.

10. Segment information

a) Products and services from which reportable segments derive their revenues:

Information reported to the Chief Operating Decision Maker (CODM) for the puspose of resource allocation and assessment of segment performance is based on product and services. Accordingly, management of the company has chosen to organise the segment based on its products and services as follows;.

- Gases and Related Products

- Project Engineering

The company’s chief operating decision maker is the Managing Director.

Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

The company’s financing and income taxes are managed on a company level and are not allocated to operating segments.

Inter-segment revenue has been recognised at cost.

The Company operates predominantly within the geographical limits of India. In the company’s operations within India, there is no significant difference in the economic condition prevailing in the various states of India. Revenue from sales to customers outside India is less than 10% in the current and previous year. Hence, disclosures on geographical segments are not applicable.

b) Information about major customers

Included in the revenue arising from direct sales of products and services of Rs. 21,138.73 million, (year ended 31December 2016: Rs. 19,775.99 million) are revenues of approximately Rs. 7,838.86 million (year ended 31December 2016: Rs. 7,401.05 million) which arose from the sale to company’s top two customers. No other single customer contributed 10% or more of the company’s revenue for both 2017 and 2016.

Notes:

i) Segment performance is reviewed by the CODM on the basis of profit or loss from continuing operations before other income and finance cost and tax expenses. Segment results reviewed by CODM also excludes income or expenses which are non recuring in nature or classified as exceptional.

ii) The accounting policies of the reportable segments are same as of the compnaies accouting policies (Refer Note 2)

11. Information on Related Party Disclosure

A) List of Related Parties

i) Ultimate Holding Company (entity having control over the Company)

Linde AG, Germany

ii) Holding Company (entity having control over the Company)

The BOC Group Limited, United Kingdom (Wholly owned subsidiary of Linde AG)

iii) Fellow Subsidiaries and Joint Venture with whom transactions have taken place during the year

iv) Key Management Personnel of the Company

Mr. M Banerjee, Managing Director

Mr. Indranil Bagchi, Chief Financial Officer

Mr. P Marda, Asst Vice President & Company Secretary

12. Leases

The following is the summary of future minimum lease rental payments under non-cancellable operating leases and finance leases entered into by the Company.

A. Operating leases as a lessor:

Significant leasing arrangements include lease of plant and machinery dedicated for use under long term arrangements for periods ranging between 12 to 15 years with renewal option. Receivable under long term arrangements involving use of dedicated assets are allocated between those relating to the right to use of assets on contractual terms and conditions. Any change in the allocation assumptions may have an impact on the lease assessment and/or lease classification.

B. Finance leases as a lessor:

Certain plant and machinery has been made available by the Company to the customers under a finance lease arrangement. The arrangements covers a substantial part of the economic life of the underlying asset and contain a renewal option on expiry. Receivables under long term arrangements involving use of dedicated assets are based on the underlying contractual terms and conditions. Any change in the assumptions may have an impact on lease assessment and/or lease classification.

Such assets given under the lease arrangement have been recognised, at the inception of the lease as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

C. Operating lease as a lessee:

Company has taken various residential and office premises under operating lease or leave and license agreements. There agreements are for period of 11 months to 3 years, cancellable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rental. Minimum lease payment charged during the year to the statement of profit and loss aggregated to Rs. 64.56 million (previous year Rs. 45.43 million)

c) Company’s transaction with Bellary Oxygen Company Private Limited , being a related party during the year ended 31 December 2017 are disclosed under note 45

13. Ind AS 101 - “First Time Adoption of Indian Accounting Standards”

Transition to Ind AS - Reconciliation

The following reconciliations provide the explanation and qualification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101 “First Time Adoption of Indian Accounting Standards”.

(i) Reconciliation of total equity as at 1 January 2016 and 31 December 2016.

(ii) Reconciliation of total comprehensive income for the year ended 31 December 2016.

(iii) Reconciliation of statement of cash flows for the year ended 31 December 2016.

Previous GAAP figures have been reclassified/regrouped wherever necessary to confirm with the financial statements prepared under Ind AS.

Notes to reconciliations between IGAAP and Ind-AS

(A) Impact of computing the asset restoration obligation at present value

The Company under previous GAAP has recorded the provision for decommissioning liability and also recorded a corresponding asset. These were recorded at the value which the Company would incur at the end of the contract term. These costs have been recorded as per the provisions of Appendix A of IND AS 16 ‘Changes in Existing Decommissioning, Restoration and Similar Liabilities’. Under Ind AS, provisions are measured at discounted amount, if the effect of time value of money is material. The Company has discounted the provision for asset restoration liability to present value at the transition date resulting in the increase and decrease in the provision and asset values through equity as on 1 January 2016 and 31 December 2016. Consequently, the unwinding of discount has been recognised as a finance cost for the year ended 31 December 2016.

(B) Impact of measuring investments at fair value through other comprehensive income

Under previous GAAP, non-current investments were stated at cost less diminution in value which is other than temporary. However, under Ind AS, the investment in equity instruments [other than investment in subsidiaries, joint venture and associates] have been classified at Fair value through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition and all gains and losses on these investments needs to be recorded through OCI. On the date of transition to Ind AS, this investment was measured at its fair value which is higher than the cost as per the previous GAAP, resulting in an increase in the carrying amount of investment and corresponding increase in equity as on 1 January 2016 and 31 December 2016.

(C) Amortisation of leasehold land

Under previous GAAP, leasehold properties were presented as fixed assets and amortised over the period of lease. Under Ind AS, such properties have been classified as prepayments within non-current assets (current portion is presented as other current assets) and have been amortised over the period of lease.

(D) Reversal of proposed dividend and tax thereon

Under previous GAAP, dividends on equity shares (including tax thereon) recommended by board of directors after the end of the reporting period but before the financial statements were approved for issue were recognised in the financial statement as liability. Under Ind AS, such dividends (including tax thereon) are recognised when declared by the members in the a general meeting. The effect of this change is an increase in total equity as at 1 January 2016 and 31 December 2016.

(E) Impact on reclassification of arrangement containing leases (net of tax)

As per Ind AS 17, “Leases”, the Company has assessed certain long term arrangements, fulfilment of which is dependant on use of specified assets and where the Company has the right to control the use of such assets for being in the nature of a lease.

This resulted in certain arrangements being treated as a lease and classified as an operating/finance lease. The impact on total equity and profit and loss is on account of the difference in recognition under the lease accounting model as compared to those recognised under the previous GAAP.

(F) Impact on fair valuation of security deposits - asset/liability (net of tax)

In accordance with Ind AS 109, “Financial Instruments”, all the financial instruments have to be classified and measured as either at Amortised Cost, Fair Value through Other Comprehensive Income (FVTOCI) or Fair value through Profit and Loss (FVTPL) depending upon the Business model and the Cash flow characteristics. Under previous GAAP the security deposits given to vendors/taken from customers were recorded at the transaction value, however, under Ind AS, interest free deposits being a financial asset/liability is required to be recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The impact on total equity and statement of profit and loss is on account of change in measurement of the interest free deposits under Ind AS as compared to those recognised under previous GAAP.

(G) Impact of reversal of goodwill amortisation (net of tax)

Under previous GAAP, Goodwill were necessarily amortised. Under Ind AS, these Goodwill have been determined to have an indefinite useful life and have been recorded in the financials on the transition date. Accordingly, the amortisation thereof considered in the year ending 31 December 2016 has been reversed and corresponding impact has been given in total equity and statement of profit and loss.

(H) Re-classification of actuarial gains/(losses), arising in respect of employee benefit schemes to Other Comprehensive Income

Under previous GAAP, actuarial gains and losses were recognised in statement of profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in Other Comprehensive Income. Consequently, the tax effect of the same has also been recognised in Other Comprehensive Income instead of statement of profit or loss.

(I) Other Comprehensive Income (net of taxes)

The Company uses derivative financial instruments, such as forward contracts and swaps to hedge its foreign currency risks. Under previous GAAP, the net mark to market gains and losses on the outstanding portfolios of such instruments were recognised directly in reserves. Under Ind AS, these hedges are designated as cash flow hedge and the movement in the fair value of these derivatives are recognised in Other Comprehensive Income.

14. Dividends

The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the Company. On 12 February, 2018 the Board of Directors of the Company have proposed a dividend of Re. 1 per share in respect of the year ended 31 December, 2017, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 102.81 million inclusive of a dividend distribution tax of Rs. 17.53 million.

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Dec 31, 2016

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company.

Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

1. The details of employee benefits for the year ended 31

December 2016 on account of gratuity and pension which are funded defined employee benefit plans and provident fund which is an unfunded benefit plan are as under:

Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident fund, which is a defined contribution plan. The company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognized as an expense towards contribution to Provident fund for the year aggregated to Rs. 31.38 (Previous year Rs. 29.06). Further Provident fund administered through Company''s trust for certain employees (in accordance with Provident Fund Regulation) are in the nature of defined benefit obligations with respect to the yearly interest guarantee.

Defined benefit plan

The Company operates two post-employment defined benefit plans for gratuity and pension.

Notes

1. The Pension Expenses and Gratuity Expenses have been recognized in ''Contribution to Provident and other funds'' under Note 26 to the Statement of Profit and Loss Account.

2. The estimates of future salary increases, considered in actuarial valuations take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

3. The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect capital and optimized returns within acceptable risk parameters, the plan assets are well diversified.

4. The discount rate is based on the prevailing market yield on Government Securities as at the balance sheet date for the estimated terms of obligation.

5. Certain plant and machineries have been made available by the Company to the customers under a finance lease arrangement. Such assets given under a finance lease arrangement have been recognized, at the inception of the lease, as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

6. Details with respect to the above leased asset under finance lease arrangements in accordance with Accounting Standard 19 -''Leases''.

7. Company has taken various residential and office premises under operating lease or leave and license agreements. These agreements are for a period of 11 months to 3 years, cancellable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rentals. Minimum lease payment charged during the year to the statement of profit and loss aggregated to Rs. 41.98 (Previous year Rs. 55.57).

8. (i) Provision for taxation has been recognized with reference to the taxable profit for the year ended 31 December 2016 in accordance with the provision of the Income tax Act, 1961. The ultimate tax liability for the assessment year 2017-2018 will be determined on the basis of total income for the year ending on 31 March 2017.

9. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Section 92-92F of the Income - Tax Act, 1961. Since the law requires the existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of the domestic and international transactions entered into with the associated enterprises during the assessment year and expects such records to be in existence latest by due date as required under law. The management is of the opinion that its domestic and international transaction are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

10. During the year the company has recognized Rs. 30.07 (previous year 5.47) as MAT credit entitlement and the same has been carried forward having regard to the trend of profitability and future projections. Management is of the opinion that the company will pay normal income tax during the period for which the MAT credit can be carried forward for setoff against the normal tax liability.

11. Deferred tax release of Rs. 220.61 during the previous year includes Rs. 253.26 arising from tax benefit on investment allowance availed as per Section 32AC of the Income Tax Act, 1961.

12. The Company is exposed to foreign currency fluctuations on payables as well as receivables. The payables are for purchases of fixed assets and spares and services provided by foreign vendors, while receivables are for cash flow from foreign projects and reimbursements of expenses. The Company limits the effects of foreign exchange rate fluctuations by following established risk management policies including the use of derivatives. The Company enters into derivative financial instruments, where the counterparty is primarily a bank.

The Company hedges against foreign exchange risks for future transactions which are highly probable.

The Company uses interest rate swaps to hedge the exposure to changes in interest outflows as a result of interest rate changes. If the hedge is deemed to be effective, the carrying amount of the hedged item is adjusted for changes in the fair value attributable to the hedged risk.

As explained in note 1(q) above, the Company has designated the following derivative contracts with banks:

13. Principal and interest swap as hedges of foreign currency borrowing facilities aggregating USD 40.62 million (previous year USD 40.62 million) equivalent to Rs. 2,500.00 (previous year Rs. 2,500.00) available to the Company at variable interest rates based on LIBOR. The principal and interest rate swap pertaining to borrowings aggregating to Rs 1,695.48 (previous year Rs 1,651.89) and Rs 1,064.78 (previous year Rs 1,037.43) will mature in the year 2017 and 2018 respectively, based on the remaining period as of the balance sheet date.

14. Further the Company has entered into certain firm commitments for purchase of Euro Nil (previous year Euro 0.90 million) and sale of USD 8.98 million (previous year USD 6.39 million) & Euro 0.04 million (previous year Euro Nil million).

The foreign exchange forward contracts mature between 1 - 24 months. The following table analysis of the derivative financial instruments into relevant maturity groupings based on the remaining period of the Balance Sheet date:

Rs. 170.19 (net of deferred tax Rs. 90.10) [Previous year Rs. 123.80 (net of deferred tax Rs. 65.55)] being the translation loss on foreign currency borrowings drawn down till the year-end and Rs. 129.86 (net of deferred tax Rs. 68.69) [Previous year Rs. 74.17 (net of deferred tax Rs. 39.22)] being the portion of gain arising from changes in fair values of the swap contracts referred to in point (a) above that are determined to be effective hedge of the aforesaid foreign currency borrowing facilities at variable interest and the related hedged transaction expected to occur in future have been recognized in translation and hedging reserve in shareholders'' funds.

Further, the translation gain on the forward covers for firm commitments which are determined to be effective hedge of foreign currency payables and receivables referred in point (b) above aggregating to Rs. 5.37 (net of deferred tax Rs. 2.84) [Previous year Rs. 7.23 (net of deferred tax Rs. 3.83)] has been recognized in translation & hedging reserve in shareholders'' funds. Further, amounts aggregating to Rs.

15. representing loss on rollover of derivative instrument has been recycled from Translation & Hedging Reserve and added to carrying amount of tangible fixed assets during the year.

16. The company had restructured two of its existing ECB''s availed from Linde AG during the previous year. The company had transferred net gain of Rs. 86.95 million from "Translation and hedging reserves" to the Statement of Profit and Loss on account of cancellation of cross-currency cum interest-rate swaps during the previous year.

The aforesaid gain had been included under "Other income".

17.. Exceptional item during the previous year represents separation cost of employees on account of a Voluntary Retirement Scheme launched by the Company.

18.. Corporate social responsibility

As per Section 135 of the Companies Act, 2013 a CSR committee has been formed by the Company. The funds are utilized throughout the year on the activities which are specified in Schedule VII of the Act.

The utilization is done by way of direct contribution towards aforesaid activities.

19. Segment information in accordance with Accounting Standard 17.

20. Determination of segment information is based on the organizational and management structure of the Company and its internal financial reporting system. The Company business segments namely ''Gases and Related Products'' and ''Project Engineering'' have been considered as primary segments for reporting format. Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

21. The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

22. Inter-segment revenue has been recognized at cost.

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Dec 31, 2014

1. Company overview

Linde India Limited is a public company. It is incorporated under the Companies Act, 1956 and its shares are listed on the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and Calcutta Stock Exchange Limited (CSE). The Company is primarily engaged in manufacture of industrial and medical gases and construction of cryogenic and non cryogenic air separation plants.

2. Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

Consequent upon the offer for sale through the stock exchange mechanism on 17 May 2013 made by The BOC Group Limited, a member of The Linde Group, the promoter shareholding in the Company was reduced from 89.48% to 75% in compliance with minimum public shareholding requirement under the Listing Agreement.

* Against the above loan the Company has designated principal and interest swap contracts with a bank as hedges of foreign currency borrowing facilities aggregating Euro 82.20 million (previous year Euro 1 03.40 million) equivalent to Rs. 5,268.39 (previous year Rs. 6,632.83 ). Also refer note 42

** Against the above loan the Company has designated interest rate swap contract with banks as hedges of floating interest rate facilities. Also refer note 42

# Against the above loan the Company has designated principal and interest swap contracts with a bank as hedges of foreign currency borrowing facilities aggregating USD 41.79 million (previous year USD 16.84 million) equivalent to Rs. 2,499.99 (previous year Rs. 1,000 ). Also refer note 42

3. a) Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/commissioning dates of an individual project have exceeded or are likely to exceed the delivery/commissioning dates and/or on the deviation in contractual performance as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

c) Provision for contingencies

Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

d) Provision for dismantling costs

Provision is towards estimated cost to be incurred on dismantling of plants at the customers'' site upon expiry of the tenure of the contractual agreement with the customer. Such cost has been capitalised under plant and machinery.

* Includes revaluation on building Rs. 11.46 (previous year Rs. 14.08) done by an external valuer on 30 September 1966 and 1 October 1980

** Includes borrowing costs aggregating Rs. 497.92 (previous year Rs. 1,656.49) net of interest income on surplus funds which was not immediately utilised and invested in fixed deposit Rs. Nil (previous year Rs. 39.75) Capital work in progress Includes impairment balance of Rs. 151.96 (previous year Rs. 30.10)

*** The impairment loss in the current year represents the writedown in value of certain assets to the extent of Rs. 121.85 million

# The Company had acquired business of manufacture and distribution of medical and industrial gases both in liquid and compressed form during the previous year. The assets acquired under such arrangement includes plant and machinery and vehicles aggregating to Rs. 85.90 and Rs. 2.46

## 1, 1/2% debentures of Rs. 220,930 and 16,996 ordinary shares of Rs. 10 each represents right to use flat as at the year end. Investments in such securities had been reclassified during the previous year from non current investment under note 13

4. Interest in joint venture

a) The Company does not have a subsidiary and is not required to present consolidated financial statements under Accounting Standard 21 - "Consolidated Financial Statements" prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended). Interest in Joint-venture has been accounted for as a long term investment in these financial statements. The details as per Accounting Standard 27 - "Financial Reporting of Interest in Joint Ventures" as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended) are disclosed regarding the assets, liabilities, income and expenses of the joint venture company as additional information to the users of the financial statements.

5. Commitments

Estimated Capital commitments (net of advance) not provided for Rs. 903.69 (Previous Year Rs. 2,692.71)

6. Contingent liabilities not provided for

in Rupees million Year ended Year ended 31 Dec. 2014 31 Dec. 2013

a) Excise duty and service tax matters * 38.03 38.03

b) Other excise matters ** - -

c) Sales tax matters * 111.34 107.41

d) Guarantee given by the Company - 64.60

e) Sales tax liability transferred to a beneficiary *** 27.60 27.60

f) Bills discounted 59.05 34.20

g) Other claims 16.66 15.39

* Excludes disputed matters in view of favourable appellate decisions on similar issues.

** Cryogenic vessels for gases were cleared from one factory for captive installation to the other factory of the Company. The Company is contesting the Department''s allegation that the assessable value of such inter unit transfer was not calculated as per the principles of Cost Accounting Standards-4 (CAS-4). As per the view of the management based on the facts of the case and document available, the liability would not devolve on the Company.

*** Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company had been transferred to an eligible beneficiary, at a discount, for which a bank guarantee had been provided by the beneficiary to ensure timely payment to the concerned authorities.

7. Notes:

a. The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.

b. The pension expenses and gratuity expenses have been recognised in ''contribution to Provident and other funds'' under Note 26.

c. The estimates of future salary increases, considered in actuarial valuations take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

a) Certain plant and machineries have been made available by the Company to the customers under a finance lease arrangement. Such assets given under a finance lease arrangement have been recognised, at the inception of the lease, as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

8. Company has taken various residential and office premises under operating lease or leave and license agreements. These agreements are for a period of 11 months to 3 years, cancellable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rentals. Minimum lease payment charged during the year to the statement of profit and loss aggregated to Rs. 71.39 (Previous year Rs. 70.44).

9. i) Provision for taxation has been recognised with reference to the taxable profit for the year ended 31 December 2014 in accordance with the provision of the Income tax Act, 1961. The ultimate tax liability for the assessment year 2015-2016 will be determined on the basis of total income for the year ending on 31 March 2015.

ii) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Section 92-92F of the Income tax Act, 1961. Since the law requires the existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of the domestic and international transactions entered into with the associated enterprises during the assessment year and expects such records to be in existence latest by due date as required under law. The management is of the opinion that its domestic and international transaction are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

iii) During the year the Company has recognised Rs. 8.14 (previous year 247.02) as MAT credit entitlement and the same has been carried forward having regard to the trend of profitability and future projections. Management is of the opinion that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability.

10. As explained in note 1(q) above, the Company has designated the following derivative contracts with banks: i)

a) Principal and interest swap as hedges of foreign currency borrowing facilities aggregating Euro 82.20 million (previous year Euro 103.40 million) and USD 41.79 million (previous year USD 16.84 million) equivalent to Rs. 7,768.38 (previous year Rs. 7,632.83) available to the Company at variable interest rates based on LIBOR. The principal and interest rate swap pertaining to borrowings aggregating to Rs. 3,096.27 (previous year Rs. 4,435.12), Rs. 4,745.26 (previous year Rs. 4,350.16) and Rs. 1,061.20 (previous year Rs. 1,040.57) will mature in the year 2016, 2017 and 2015 respectively, based on the remaining period as of the balance sheet date.

b) Interest swaps as hedge of floating interest rate to fixed interest on a term loan of Rs. Nil (previous year Rs. 1,000.00). The interest swap has matured in the year 2014.

c) Further the Company has entered into certain firm commitments for purchase of Euro 0.90 million (previous year Euro 8.40 million) and sale of USD Nil (previous year USD 4.56 million).

Rs. 748.78 (net of deferred tax Rs. 385.57) [Previous year Rs. 1,447.61 (net of deferred tax Rs. 745.41)] being the translation loss on foreign currency borrowings drawn down till the year-end and Rs. 772.53 (net of deferred tax Rs. 397.79) [Previous year Rs. 1,709.76 (net of deferred tax Rs. 880.39)] being the portion of gain arising from changes in fair values of the swap contracts referred to in point (a) above that are determined to be effective hedge of the aforesaid foreign currency borrowing facilities at variable interest and the related hedged transaction expected to occur in future have been recognized in translation and hedging reserve in shareholders'' funds.

Rs. Nil (net of deferred tax Rs. Nil) [previous year Rs. 0.60 (net of deferred tax Rs. 0.30)] being the portion of gain arising from changes in fair values of the swap contracts referred in point (b) above that are determined to be effective hedge of the aforesaid floating interest rate facilities and the related hedged transaction expected to occur in future have been recognized in translation and hedging reserve in shareholders'' funds.

Further, the translation loss on the forward covers for firm commitments which are determined to be effective hedge of foreign currency payables and receivables referred in point (c) above aggregating to Rs. 2.08 (net of deferred tax Rs. 1.07) [Previous year gain of Rs. 40.46 (net of deferred tax Rs. 20.93)] has been recognised in translation & hedging reserve in shareholders'' funds.

(ii) Hedged transaction aggregating to Rs. Nil [previous year Rs. 342.34 (equivalent to USD 6.29 million)] which was no longer expected to occur, the net cumulative gain or loss recognized in shareholders'' funds had been transferred to the Statement of Profit and Loss for the year aggregating to Rs. Nil (previous year Rs. 49.05).

(iii) Pursuant to the ICAI''s announcement in March 2008, the Company had opted for early adoption of Accounting Standard 30 "Financial Instruments: Recognition and Measurement" issued by the ICAI in the year ended 31 December 2009. Accordingly, the Company during the year 1 January 2014 to 31 December 2014 has recognised net loss of Rs. 426.51 under ''Translation and hedging reserves'', representing net exchange gain on borrowings aggregating to Rs. 1,058.69 and mark to market loss of Rs. 1,485.20 arising from changes in fair value of principal and interest rate swaps, forward contracts against firm commitments, which qualify for hedge accounting being effective hedges.

11.

In the previous year, the Company has sold factory land and structures situated at Ahmedabad and a profit of Rs. 502.70 arising from sale of such land has been shown as exceptional item.

12.

Segment information in accordance with Accounting Standard 17 prescribed by the Companies (Accounting Standards) Rule, 2006 (as amended).

a) Determination of segment information is based on the organisational and management structure of the Company and its internal financial reporting system. The Company business segments namely ''Gases and Related Products'' and ''Project Engineering'' have been considered as primary segments for reporting format. Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable on a reasonable basis to each of the segments, have been disclosed as unallocable.

b) The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

c) Inter-segment revenue has been recognised at cost.

Dividend warrants of certain non-resident shareholders send to their bankers in India have been excluded.

13. Expenses are net of reimbursement received for salary, travel and other expenses aggregating Rs. 113.50 (previous year Rs. 109.65).

---

Dec 31, 2013

1. interest in joint venture

a) The Company does not have a subsidiary and is not required to present consolidated financial statements under Accounting Standard 21 - "Consolidated Financial Statements" prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended). Interest in joint- venture has been accounted for as a long term investment in these financial statements. The details as per Accounting Standard 27 - "Financial Reporting of Interest in joint Ventures" as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended) are disclosed regarding the assets, liabilities, income and expenses of the joint venture company as additional information to the users of the financial statements.

b) The Company''s interest, as a venture, in a jointly controlled entity (incorporated joint Venture) is:

c) Company''s transactions with Belloxy, being a related party, during the year ended 31 December 2013 are disclosed under note 45.

2. Estimated Capital commitments (net of advance) not provided for Rs. 2,692.71 million (Previous Year Rs. 3,647.89 million)

3. Contingent liabilities not provided for

in Rupees million Year ended Year ended 31 Dec. 2013 31 Dec. 2012

a) Excise duty and service tax matters'' 38.03 38.03

b) Other excise matters - -

c) Sales tax matters- 107.41 54.14

d) Guarantee given by the Company 64.60 184.81

e) Sales tax liability transferred to a beneficiary- 27.60 27.60

f) Bills discounted 34.20 56.41

g) Other claims HIT 15.39 21.69

* Excludes disputed matters in view of favorable appellate decisions on similar issues.

" Cryogenic vessels for gases were cleared from one factory for captive installation to the other factory of the Company. The Company is contesting the Department''s allegation that the assessable value of such inter unit transfer was not calculated as per the principles of Cost Accounting Standards-4 (CAS-4). As per the view of the management based on the facts of the case and document available, the liability would not devolve on the Company.

*" Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company had been transferred to an eligible beneficiary, at a discount, for which

a bank guarantee had been provided by the beneficiary to ensure timely payment to the concerned authorities.

4.a) certain plant and machineries have been made available by the Company to the customers under a finance lease arrangement. Such assets given under a finance lease arrangement have been recognised, at the inception of the lease, as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

b) Details with respect to the above leased asset under finance lease arrangements in accordance with Accounting Standard 19 -''Leases'' as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended).

5.Company has taken various residential and office premises under operating lease or lease and license agreements. These agreements are for a period of 11 months to 3 years, cancellable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rentals. Minimum lease payment charged during the year to the statement of profit and loss aggregated to Rs. 70.44 million (Previous year Rs. 67.15 million).

6.i) Provision for taxation has been recognised with reference to the taxable profit for the year ended 31 December 2013 in accordance with the provision of the Income tax Act, 1961. The ultimate tax liability for the assessment year 2014-2015 will be determined on the bas,s of total income for the year ending on 31 March 2014.

ii) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Section 92-92F of the Income - Tax Act, 1961. Since the law requires the existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation of the domestic and international transactions entered into with the associated enterprises during the assessment year and expects such records to be in existence latest by due date as required under law. The management is of the opinion that its domestic and international transaction are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

iii) During the year the company has recognised Rs. 247.02 million (previous year 211.88 million) as MAT credit entitlement and the same has been earned forward having regard to the trend of profitability and future projections. Management is of the opinion that the company will pay normal income tax during the period for which the MAT credit can be earned forward for setoff against the normal tax liability.

7.As explained in note 1(q), the Company has designated the following derivative contracts with the banks:

i)a) Principal and interest swap as hedges of foreign currency borrowing facilities aggregating Euro103.40 million (previous year Euro 115.60 million) and USD 16.84 million (previous year nil) equivalent to Rs. 7,632.83 million (previous year Rs. 7,413.83 million) available to the Company at variable interest rates based on LIBOR. The principal and interest rate swap aggregating to Rs. 4,435.12 million (previous year Rs. 4,209.30 million), Rs. 4,350.16 million (previous year Rs. 4,180.27 million) and Rs. 1,040.57 million (previous year nil) will mature in the year 2016 and 2017 and 2015 respectively, based on the remaining period as of the Balance Sheet date.

b) interest swaps as hedge of floating interest rate to fixed interest on a term loan of Rs. 1,000.00 million (previous year Rs. 1,000.00 million). The interest swap will mature in the year 2014 based on the remaining period as of the balance sheet date.

c) Further the Company has entered into certain firm commitments for purchase of Euro 8,401 thousands (previous year Euro 33,693 thousands) and USD Nil (previous year USD 1,010 thousands) and sale of USD 4,557 thousands (previous year USD 6,557 thousands).

The foreign exchange forward contracts mature between 1 - 24 months. The following table analysis of the derivative financial instruments into relevant maturity groupings based on the remaining period of the Balance Sheet date:

Rs. 1,447.61 million (net of deferred tax Rs. 745.41 million) [Previous year Rs. 659.27 million (net of deferred tax Rs. 316.63 million)] being the translation loss on foreign currency borrowings drawn down till the year- end and Rs. 1,709.76 million (net of deferred tax Rs. 880.39 million)

[Previous year Rs. 648.37 million (net of deferred tax Rs. 311.40 million)] being the portion of gam arising from changes in fair values of the swap contracts referred to in point (a) above that are determined to be effective hedge of the aforesaid foreign currency borrowing facilities at variable interest and the related hedged transaction expected to occur in future have been recognized in translation and hedging reserve in shareholders'' funds.

Rs. 0.60 million (net of deferred tax Rs. 0.30 million) [previous year (Rs 9.75 million) (net of deferred tax (Rs. 4.69 million)] being the portion of gain/(loss) arising from changes in fair values of the swap contracts referred in point (b) above that are determined to be effective hedge of the aforesaid floating interest rate facilities and the related hedged transaction expected to occur ,n future have been recognized in translation and hedging reserve in shareholders'' funds.

Further, the translation gam on the forward covers for firm commitments which are determined to be effective hedge of foreign currency payables and receivables referred in point (c) above aggregating to Rs. 40.46 million (net of deferred tax Rs. 20.93 million) [Previous year Rs. 13.32 million (net of deferred tax Rs. 6.40 million)] has been recognised in translations hedging reserve in shareholders'' funds.

i) Hedged transaction aggregating to Rs. 342.34 million (equivalent to USD 6.29 million) [previous year Rs. 148.99 million (equivalent Euro 2.15 million) which is no longer expected to occur, the net cumulative loss recognized in shareholders'' funds is now transferred to the Statement of Profit and Loss for the year aggregating to Rs. 49.05 million (previous year Rs. 8.14 million)

8.During the year, the Company has sold factory land and structures situated at Ahmadabad and a profit of Rs. 502.70 million arising from sale of such land has been shown as exceptional item. In the previous year, the Company had sold factory land situated at Vizag and Bangalore and a profit of Rs. 718.62 million arising from sale of such lands were shown as exceptional item.

9.Segment information in accordance with Accounting Standard 17 prescribed by the Companies (Accounting Standards) Rule, 2006 (as amended).

a) Determination of segment information is based on the organisational and management structure of the Company and its internal financial reporting system. The Company business segments namely ''Gases and Related Products'' and ''Project Engineering'' have been considered as pnmary segments for reporting format. Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallowable.

b) The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

c) inter-segment revenue has been recognised at cost.

10.information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures prescribed by the Companies (Accounting Standards) Rules,2006 (as amended).

A) List of Related Parties

i) Ultimate Holding Company (entity having control over the Company) Linde AG, Germany

ii) Holding Company (entity having control over the Company)

The BOC Group Limited, United Kingdom (Wholly owned Subsidiary of Unde AG)

iii) Fellow Subsidiaries and joint Venture with whom transactions have taken place during the year

iv) Key Management Personnel of the Company

Mr. S Menon, Managing Director till 29 July 2013

Mr.M Banerjee, Managing Director from 30 July 2013

Dividend warrants of certain non -resident shareholders send to their bankers in India have been excluded.

11. Expenses are net of reimbursement received aggregating Rs. 109.65 million (previous year Rs. 59.60 million).

12. Figures for the previous year has been regrouped/rearranged where necessary.

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Dec 31, 2012

Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Compa- ny''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid- up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

a) Provision for liquidated damages

Liquidated damages are provided based on contractual terms when the delivery/commissioning dates of an individual project have exceeded or are likely to exceed the delivery/commissioning dates and/or on the deviation in contractual performance as per the res- pective contracts. This expenditure is expected to be incurred over the respective contractual terms up to closure of the contract (including warranty period).

Estimated amount of Liquidated Damages (LD) for the Project Enginee- ring Division are reduced from contract revenue on all ongoing contracts.

Such LDs were recorded as a charge to the Statement of Profit and Loss till year ended 31 December 2010. Accordingly provision for LD on such contracts were reversed and recorded as prior period adjustments under "liabilities written-back" with appropriate adjustment to "gross sales" and "billing in excess over cost and profit" in the previous year aggregating to Rs. 125.04 million.

LD aggregating to Rs. 157.46 million were not reduced from contract revenue on certain contracts since no corresponding contract revenue were recognised from those projects in the current and previous year.

b) Provision for warranties

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

c) Provision for contingencies

Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in res- pect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

d) Provision for dismantling costs

Provision is towards estimated cost to be incurred on dismantling of plants at the customers'' site upon expiry of the tenure of the con- tractual agreement with the customer. Such cost has been capitalised under plant and machinery.

1. Interest in joint venture

a) The Company does not have a subsidiary and is not required to pre- sent consolidated financial statements under Accounting Standard 21 - "Consolidated Financial Statements" prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended). Interest in Joint- venture has been accounted for as a long term investment in these financial statements. The details as per Accounting Standard 27 - "Financial Reporting of Interest in Joint Ventures" as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended) are disclosed regarding the assets, liabilities, income and expenses of the joint venture company as additional information to the users of the financial statements.

b) Company''s transactions with Bellary oxygen limited, being a related party, during the year ended 31 December 2012 are disclosed in note 44 below.

2. Estimated capital commitments (net of advance) not provided for Rs. 3,647.89 million (previous year Rs. 536.24 million).

3. Contingent liabilities not provided for

Year ended Year ended in rupees million 31 Dec.2012 31 Dec.2011

a) Excise duty & service tax matters* 38.03 37.92

b) Other excise matters** - -

c) Sales tax matters* 54.14 31.93

d) Guarantee given by the Company 184.81 308.02

e) Sales tax liability transferred to a beneficiary*** 27.60 27.60

f) Bills discounted 56.41 11.65

g) Other claims 21.69 19.65

* Excludes disputed matters in view of favourable appellate decisions on similar issues.

" Cryogenic vessels for gases were cleared from one factory for captive installation to the other factory of the Company. The Company is contesting the Department''s allegation that the assessable value of such inter unit transfer was not calculated as per the principles of Cost Accounting Standards-4 (CA5-4). As per the view of the management based on the facts of the case and document available, the liability would not devolve on the Company.

Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company had been transferred to an eligible beneficiary, at a discount, for which a bank guarantee had been pro- vided by the beneficiary to ensure timely payment to the concerned authorities.

Notes:

a) The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario. In order to protect capital and optimise returns within acceptable risk parameters, the plan assets are well diversified.

b) The pension expenses and gratuity expenses have been recognised in "Provident fund and employee benefit expenses" under note 26.

c) The estimates of future salary increases, considered in actuarial valuations take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

a) Certain plant and machineries have been made available by the Company to the customers under a finance lease arrangement. Such assets given under a finance lease arrangement have been recognised, at the inception of the lease, as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

b) Details with respect to the above leased asset under finance lease arrangements in accordance with Accounting Standard 19 - "Leases" as prescribed by the Companies (accounting standards) Rules, 2006 (as amended).

Company has taken various residential and office premises under operating lease or leave and license agreements. These agreements are for a period of 11 months to 3 years, cancelable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rent- als. Minimum lease payment charged during the year to the Statement of Profit and Loss aggregated to Rs. 67.15 million (previous year Rs. 51.29 million).

4. a) Provision for taxation has been recognised with reference to the tax- able profit for the year ended 31 December 2012 in accordance with the provision of the Income Tax Act, 1961. The ultimate tax liability for the assessment year 2013-2014 will be determined on the basis of total income for the year ending on 31 March 2013.

b) The Company has established a comprehensive system of mainte- nance of information and documents as required by the transfer pric- ing legislation under Section 92-92F of the Income Tax Act, 1961. Since the law requires the existence of such information and docu- mentation to be contemporaneous in nature, the Company is in the process of updating the documentation of the international transac- tions entered into with the associated enterprises during the assess- ment year and expects such records to be in existence latest by due date as required under law. The management is of the opinion that its international transaction are at arm''s length so that the aforesaid leg- islation will not have any impact on the financial statements, particu- larly on the amount of tax expense and that of provision for taxation.

c) During the year the company has recognised Rs. 211.88 million as MAT credit entitlement and the same has been carried forward having regard to the trend of profitability and future projections. Management is of the opinion that the company will pay normal income tax during the period for which the MAT credit can be carried forward for setoff against the normal Tax liability.

As explained in note 1 (o) above, the Company has designated the following derivative contracts with banks:

a) Principal and interest swap as hedges of foreign currency borrowing facilities aggregating EUR 115.60 million (previousyear EUR 122.00 million) equivalent to Rs. 8,389.57 million (previous year Rs. 8,380.30 million) available to the Company at variable interest rates based on LIBOR. The principaland interest rate swap aggregating to Rs. 4,209.30 million (previous year Rs. 3,984.08 million) and Rs. 4,180.27 million (previous year Rs. 4,396.22 million) will mature in the year 2016 and 2017 respectively, based on the remaining period as of the balance sheet date.

b) Interest swaps as hedge of floating interest rate to fixed interest on a term loan of Rs. 1,000.00 million (previous year Rs. Nil). The interest swap will mature in the year 2014 based on the remaining period as of the balance sheet date.

c) Further the Company has entered into certain firm commitments for purchase of EUR 33,693 thousands (previous year EUR 3,977 thousands) and USD 1,010 thousands (previous year USD Nil) and sale of USD 6,557 thousands (previous year USD 3,575 thousands).

The foreign exchange forward contracts mature between 1 -24 months. The following table analysis of the derivative financial instruments into rel- evant maturity groupings based on the remaining period of the balance sheet date:

Rs. 659.27 million (net of deferred tax Rs. 316.63 million) [previous year Rs. 386.27 million (net of deferred tax Rs. 185.52 million)] being the trans- lation loss on foreign currency borrowings drawn down till the year-end and Rs. 648.37 million (net of deferred tax Rs. 311.40 million) [previous year Rs. 397.22 mill lion (net of deferred tax Rs. 190.78 million)] being the portion of gain arising from changes in fair values of the swap contracts referred to in point a) above that are determined to be effective hedge of the afore- said foreign currency borrowing facilities at variable interest and the related hedged transaction expected to occur in future have been recognized in translation and hedging reserve in shareholders'' funds.

Rs. 9.75 million (net of deferred tax Rs. 4.69 million) (previous year Rs. Nil) being the portion of loss arising from changes in fair values of the swap con- tracts referred in point b) above that are determined to be effective hedge of the aforesaid floating interest rate facilities and the related hedged trans- action expected to occur in future have been recognized in translation and hedging reserve in shareholders'' funds.

Further, the translation gain on the forward covers for firm commitments which are determined to be effective hedge of foreign currency payables and receivables referred in point c) above aggregating to Rs. 13.32 million (net of deferred tax Rs. 6.40 million) [previous year Rs. 8.57 million (net of deferred tax Rs. 4.12 million)] has been recognised in translation & hedging reserve in shareholders'' funds.

B. Hedged transaction aggregating of Rs. 148.99 million (equivalent to EUR 2.15 million) [previous year Rs. Nil (equivalent EUR Nil) which is no longer expected to occur, the net cumulative loss recognized in shareholders'' funds is now transferred to the Statement of Profit and Loss for the year aggregating to Rs. 8.14 million (previous year Rs. Nil).

5. During the year, the Company has sold factory land situated at Vizag and Bangalore and a profit of Rs. 718.62 million arising from sale of such land has been shown as exceptional item.

6. Segment information in accordance with Accounting Standard 17 prescribed by the Companies (Accounting Standards) Rule, 2006 (as amended).

a) Determination of segment information is based on the organisational and management structure of the Company and its internal financial report- ing system. The Company business segments namely "Gases and Related Products" and "Project Engineering" have been considered as primary segments for reporting format. Segment revenue, results, assets and lia- bilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Rev- enue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reason- able basis to each of the segments, have been disclosed as unallocable.

b) The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

c) Inter-segment revenue has been recognised at cost.

Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended).

A. List of related parties

a) Ultimate Holding Company (entity having control over the Company)

Linde AG, Germany

b) Holding Company (entity having control over the Company)

The BOC Group Limited, United Kingdom (Wholly owned Subsidiary of Linde AG)

c) Fellow subsidiaries and Joint Venture with whom transactions have taken place during the year:

d) Key Management Personnel of the Company

Mr S Menon, Managing Director

Dividend warrants of certain non-resident shareholders send to their bankers in India have been excluded.

7. Expenses are net of reimbursement received aggregating Rs. 59.60 million (previous year Rs. 53.21 million).

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Dec 31, 2010

(i) Interest in Joint Venture

A) The Company does not have a subsidiary and is not required to present consolidated financial statements under Accounting Standard 21 "Consolidated Financial Statements" prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended). Interest in Joint-venture has been accounted for as a long term investment in these financial statements. The details as per Accounting Standard 27 "Financial Reporting of Interest in Joint Ventures" as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended) are disclosed regarding the assets, liabilities, income and expenses of the joint venture company as additional information to the users of the financial statements.

b) Estimated Capital commitments (net of advance) not provided for Rs. Nil (Previous year Rs Nil)

c) Contingent Liabilities not provided for Rs Nil (Previous year Rs Nil)

d) Companys transactions with Belloxy, being a related party, during the year ended 31 December 2010 are disclosed in Note (xxiv) below.

(ii) Contingent Liabilities not provided for:

Year ended Year ended 31 Dec 2010 31 Dec 2009

a) Excise Duty matters* 32,087 41,339

b) Other Excise matters*** — —

c) Sales Tax matters* 35,907 54,862

d) Guarantees given by the Company 420,821 594,669

e) Sales Tax Liability transferred to a beneficiary ** 27,600 27,600

f) Bills Discounted 12,310 3,834

g) Other claims 22,636 25,875

*Excludes disputed matters in view of favourable appellate decisions on similar issues.

** Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company has been transferred to an eligible beneficiary, at a discount, for which a bank guarantee had been provided by the beneficiary to ensure timely payment to the concerned authorities.

*** The Company had cleared cryogenic vessels for gases from one factory to the other used for captive consumption. The department alleged that the assessable value of such inter unit transfer was not calculated as per the principles of Cost Accounting Standards-4 (CAS-4). The Company is of the view that based on the facts of the cases and documents available with the Company, the liability would not devolve on the Company.

(iii) There are no Micro and Small Enterprises, to whom the Company owes dues, that are outstanding for more than 45 days as at 31 December, 2010. 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 confirmations received from vendors, suppliers, etc in response to intimation in this regard sent by the Company to such parties.

(vii) Loans and Advances recoverable in cash or in kind or for value to be received (Schedule 11) include:-

(a) Rs. 1,099 (Previous Year Rs. 1,045) being interest free loans (car loan, furniture loan and education loan) to various employees which are recovered from their remuneration in accordance with relevant repayment schedule contained in the relevant schemes/specific approvals.

(b) The above includes Rs Nil (Previous Year Rs. Nil) due from an Officer of the Company; [Maximum amount due during the year Rs Nil (Previous Year Rs.23)].

(c) Rs 250,000 (Previous Year Rs. 250,000) being long term advance to Joint Venture Company [Also refer note (xxiv) below] for purchase of gases in future.

(iv) Prepaid expenses in Schedule 10 include: Rs. 10,540 (Previous Year Rs. 11,880) towards rent adjustable over a period of 20 years from April 1998.

(v) a) Certain plant and machineries have been made available by the Company to the customers under a finance lease arrangement. Such assets given under a finance lease arrangement have been recognised, at the inception of the lease, as a receivable at an amount equal to the net investment in the lease. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease.

b) Details with respect to the above leased asset under finance lease arrangements in accordance with Accounting Standard 19 -Leases as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended).

(vi) The Company has taken various residential and office premises under operating lease or leave and license agreements. These agreements are for a period of 11 months to 3 years, cancelable during the life of the contract at the option of both the parties and do not contain stipulation for increase in lease rentals. Minimum lease payment charged during the year to the profit and loss account aggregated to Rs. 20,250 (Previous Year Rs. 21,088).

(a) Provision for Liquidated damages

Liquidated damages are provided based on contractual terms when the delivery / commissioning dates of an individual project have exceeded or are likely to exceed the delivery / commissioning dates and / or on the deviation in contractual performance as per the respective contracts. This expenditure is expected to be incurred over the respective contractual terms upto closure of the contract (including warranty period).

(b) Provision for warranty

Warranty costs are provided based on a technical estimate of the costs required to be incurred for repairs, replacement, material cost, servicing and past experience in respect of warranty costs. It is expected that this expenditure will be incurred over the contractual warranty period.

(c) Provision for Contingencies

Provision is towards known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other levies in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

(vii) Information in accordance with the requirements of the Revised Accounting Standard 7 on Construction Contracts as prescribed by the Companies (Accounting Standards) Rules, 2006 (as amended).

(viii) Provision for taxation has been recognised with reference to the taxable profit for the year ended 31 December 2010 in accordance with the provision of the Income tax Act, 1961. The ultimate tax liability for the assessment year 2011 -2012 will be determined on the basis of total income for the year ending on 31 March 2011.

(ix) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. The management is of the opinion that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

(x) As explained in note (i) (m) above, the Company has designated principal and interest swap contracts with a bank as hedges of foreign currency borrowing facilities aggregating Euro 122,000 thousand (Previous Year Euro 58,000 thousand) equivalent to Rs 7,808,967 (Previous Year Rs. 3,857,607) available to the Company at variable interest rates based on LIBOR.

Rs. 244,611 (net of deferred tax Rs.121,683) [Previous Year Rs 1,476] being the translation gain on foreign currency borrowings drawn down till the year-end and Rs. 472,834 (net of deferred tax Rs.235,214) [Previous Year Rs 54,094 (net of deferred tax 27,095)] being the portion of loss arising from changes in fair values of the aforesaid swap contracts that are determined to be effective hedge of the aforesaid foreign currency borrowing facilities at variable interest and the related hedged transaction expected to occur in future have been recognized in Translation and Hedging Reserve in Shareholders Funds. The loss so recognized in the Translation and Hedging Reserve will be transferred to the Profit and Loss Account on occurrence of the hedged transaction.

Further ,the translation loss on the forward covers for firm commitments which are determined to be effective hedge of foreign currency payables aggregating to Rs. 153,624 (net of deferred tax Rs 76,421) [Previous Year Rs 111,461 (net of deferred tax Rs. 57,394)] has been recognised in Translation & Hedging Reserve in Shareholders Funds. The loss so recognised in translation/hedging reserve would be transferred to profit and loss account upon occurrence of the hedged transaction.

(xi) Segment information in accordance with Accounting Standard 17 prescribed by the Companies (Accounting Standards) Rule,2006 (as amended).

a) Determination of segment information is based on the organisational and management structure of the Company and its internal financial reporting system. The Company business segments namely Gases and Related Products and Project Engineering have been considered as primary segments for reporting format. Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable basis to each of the segments, have been disclosed as unallocable.

b) The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

c) Inter-segment revenue has been recognised at cost.

(xii) Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures issued by the Companies (Accounting Standards) Rules,2006 (as amended). A) List of Related Parties

i) Ultimate Holding Company (entity having control over the Company)

LindeAG ii) Holding Company (entity having control over the Company) The BOC Group Limited (Wholly owned Subsidiary of Linde AG)

iii) Fellow Subsidiaries and Joint Venture with whom transactions have taken place during the year (a) Located outside India

Fellow Subsidiary Country

BOC Bangladesh Limited Bangladesh

Chemogas NV Belgium

BOC (China) Holdings Company Limited China

Linde Electronics & Speciality Gases (Suzhou) Company Limited China

Linde Gas (Ningbo) Limited China

Linde CryoPlants Limited England

Cryostar SAS France

Hong Kong Oxygen & Acetyene Company Limited Hong Kong

Linde Gas Hungary Company Limited Hungary

Linde Japan Limited (earlier named as Linde Electronics Gas Japan Limited) Japan

BOC Kenya Limited Kenya

MOX-Linde Gases Sdn Bhd (formerly known as MOX Gases Sdn Bhd) Malaysia

Malaysian Oxygen Berhad Malaysia

Linde Philippines Inc (formerly known as Consolidated Industrial Gases Inc) Philippines

Linde Gas Singapore Pte Limited Singapore

Linde Gas Asia Pte Limited Singapore

African Oxygen Limited (Afrox) South Africa

Linde Electronics South Africa (Pty) Limited South Africa

Cryo Aktiebolag Sweden

BOC Lienhwa Industrial Gases Company Limited Taiwan

Thai Industrial Gases Public Company Limited Thailand

BOC Process System United Kingdom

BOC Limited United Kingdom

Linde Global Helium (A division of Linde Gas North America, L.L.C) United States of America

Linde North America, Inc. United States of America

Linde Gas North America LLC E&S Gas United States fsof America

(b) Located in India Fellow Subsidiary

Linde Global Support Services Private Limited Linde Engineering Private Limited

Joint Venture

Bellary Oxygen Company Private Limited

iv) Key Management Personnel of the Company

Mr S Menon, Managing Director

Late K Roy, Finance Director (till 1st August 2010)

(xiii) Expenses are net of reimbursements received aggregating Rs. 39,959 (Previous Year Rs. 164,470) (xxxvi) Previous years figures have been rearranged/ regrouped where considered necessary to conform to current years presentation. Significant regroupings in the current year includes the reclassification of Provision for liquidated damages and Provisions for warranties from Current Liabilities to Provisions in the Balance Sheet to facilitate an appropriate comparison and disclosures thereof in the books of accounts. There is however, no impact on Profit.

---

Dec 31, 2009

(i) Interest in Joint Venture

a) The Company does not have a subsidiary and is not required to present consolidated financial statements under Accountins Standard 21 - "Consolidated Financial Statements" prescribed by the Companies (Accountins Standards) Rules, 2006. Accordinsly the Company is not required under Accountins Standard 27 - "Financial Reporting of Interest in Joint Ventures" as prescribed by the Companies (Accountins Standards) Rules, 2006 to consolidate its share of assets, liabilities, income and expenses in Joint Venture Company. Such interest has been accounted for as a Ions term investment in these financial statements. The details resardins the assets, liabilities, income and expenses of the joint venture company is being provided below as additional information to the users of the financial statements.

b) Companys transactions with Belloxy, being a related party, during the year ended 31 December 2009 are disclosed in Note (xxiv) below.

(ii) Estimated Capital commitments (net of advance) not provided for Rs. 939,240 (Previous year - Rs. 2,588,786).

(iii) Contingent Liabilities:

Claims against the Company in respect of taxes, duties etc. not acknowledged as debts are estimated as below.-

Year ended Year ended 31 Dec 2009 31 Dec 2008

a) Excise Duty matters * 41,339 65,860

b) Other Excise matters*** - -

c) Sales Tax matters * 54,862 46,432

d) Guarantees given by the Company 594,669 11,400

e) Other guarantees - 5,122

f) Sales Tax Liability transferred to a beneficiary** 27,600 27,600

g) Bills Discounted 3,834 14,030

h) Other claims 25,875 11,476

* Excludes disputed matters in view of favourable appellate decisions on similar issues.

** Pursuant to an approved scheme of Government of Maharashtra, certain Sales Tax Liabilities of the Company has been transferred to an eligible beneficiary, at a discount, for which a bank guarantee had been provided by the beneficiary to ensure timely payment to the concerned authorities.

*** The Company had cleared cryogenic vessels for gases from one factory to the other used for captive consumption. The department alleged that the assessable value of such inter unit transfer was not calculated as per the principles of Cost Accounting Standards-4 (CAS-4). The CESTAT has set aside the matter in the current year and has remanded the cases for fresh decision on the question of valuation as per CAS-4 to original authority. The Company is of the view that based on the facts of the cases and documents available with the Company, the liability would not devolve on the Company.

(iv) There are no Micro and Small Enterprises, to whom the Company owes dues, that are outstanding for more than 45 days as at 31 December, 2009. 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 confirmations received from vendors, suppliers, etc in response to intimation in this regard sent by the Company to such parties.

(v) Loans and Advances recoverable in cash or in kind or for value to be received (Schedule 11) include:-

(a) Rs. 1,045 (Previous Year Rs. 1,077) being interest free loans (car loan, furniture loan and education loan) to various employees which are being recovered from their remuneration in accordance with repayment schedule contained in the relevant schemes/specific approvals.

(b) The above includes Rs Nil (Previous Year Rs. 23) due from an Officer of the Company; [Maximum amount due during the year Rs 23 (Previous Year Rs.63)].

(c) Rs 250,000 (Previous Year Rs. 250,000) being long term advance to Joint Venture company [Also refer note (xxiv) below] for purchase of gases in future.

(vi) Prepaid expenses in Schedule 10 include.- Rs. 11,880 (Previous Year Rs. 13,320) towards rent adjustable over a period of 20 years from April 1998.

(vii) a) Durins the year, certain plant and machinery have been made available by the Company to a customer under a finance lease arransement. Such assets siven under a finance lease arransement have been recognised, at the inception of the lease, as a receivable at an amount eo;ual to the net investment in the lease. Gain of Rs. 35,497 being the excess of net investment in the lease over the aggregate of written down value of leased assets Rs. 112,242, has been recognised as an exceptional item in these financial statements. The finance income arising from the lease is being allocated based on a pattern reflecting constant periodic return on the net investment in the lease. The lease arrangement is for a period of 15 years which may be extended for such further period and on such terms and conditions as the parties may mutually agree.

(viii) The Company has taken various residential and office premises under operating lease or leave and license agreements. These agreements are for a period of 11 months to 3 years, cancelable during the life of the contract at the option of both the parties and does not contain stipulation for increase in lease rentals. Minimum lease payment charged during the year to the profit and loss account aggregated to Rs. 21,088 (Previous Year Rs. 24,432).

(ix) Provision for Contingencies

(a) Excise and sales tax cases relate to those that are pending before various adjudicating Authorities for a considerable period of time and where based on decision in similar cases / counsels opinion, management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

(b) Other provisions are towards various legal cases pending against the Company and contractual obligation in respect of which management believes that there are present obligations and the settlement of such obligations are expected to result in outflow of resources, to the extent provided for.

(x) Provision for tax has been recosnised with reference to the taxable profit for the year ended 31 December 2009 in accordance with the provision of the Income tax Act, 1961. The ultimate tax liability for the assessment year 2010-2011 will be determined on the basis of taxable income for the year endins on 31 March 2010.

(xi) The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricins lesislation under Sections 92-92F of the Income-tax Act, 1961. The manasement is of the opinion that its international transactions are at arms lensth so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

(xii) As explained in note (i) (m) above, the Company has designated principal and interest swap contracts with a bank as hedges of foreign currency borrowing facilities aggregating Euro 58 million (equivalent to Rs. 3,857,607) available to the Company at variable interest rates based on LIBOR.

Rs. 1,476 being the translation gain on foreign currency borrowings drawn down till the year-end and Rs. 54,094 (net of deferred tax Rs. 27,095) being the portion of loss arising from changes in fair values of the aforesaid swap contracts that are determined to be effective hedge of the aforesaid foreign currency borrowing facilities at variable interest and the related hedged transaction expected to occur in future have been recognized in Translation and Hedging Reserve in Shareholders Funds. The loss so recognized in the Translation and Hedging Reserve will be transferred to the Profit and Loss Account on occurrence of the hedged transaction.

Further ,the translation loss on the forward covers for firm commitments which are determined to be effective hedge of foreign currency payables aggregating to Rs. 111,461 (net of deferred tax Rs. 57,394) for the year ended 31 December 2009 has been recognised in translation & hedging reserve in shareholders funds. The loss so recognised in translation/ hedging reserve would be transferred to profit and loss account upon occurrence of the hedged transaction.

Had the Company continued to recognize loss arising from changes in fair values of the aforesaid swap/forward contracts and loss arising from year-end translation of foreign currency borrowings drawn down in accordance with Accounting Standard 11 - "The effects of Changes in Foreign Exchange Rates" prescribed by the Companies (Accounting Standard) Rules 2006 and notification issued by the Institute of Chartered Accountants of India on 29 March 2008 respectively, loss on foreign exchange fluctuations during the year would have been higher by Rs. 248,568 and profit after tax would have been lower by Rs. 164,079.

(xiii) Segment information in accordance with Accounting Standard 17 prescribed by the Companies ( Accounting Standards) Rule,2006.

a) Determination of segment information is based on the organisational and management structure of the Company and its internal financial reporting system. The Company business segments namely Gases and Related Products and Project Engineering have been considered as primary segments for reporting format. Segment revenue, results, assets and liabilities include the respective amounts that are directly attributable to or can be allocated on a reasonable basis to each of the segments. Revenue, expenses, assets and liabilities which relate to the enterprise as a whole and are neither attributable to nor can be allocated on a reasonable oasis to each of the segments, have been disclosed as unallocable.

b) The Company operates predominantly within the geographical limits of India, accordingly secondary segments have not been considered.

c) Inter-segment revenue has been recognised at cost.

(xiv) Information in accordance with the requirements of Accounting Standard 18 on Related Party Disclosures as prescribed by the Companies (Accounting Standards) Rules, 2006. A) List of Related Parties

i) Ultimate Holding Company (entity having control over the Company)

Linde AG

ii) Holding Company (entity having control over the Company)

The BOC Group Limited

(Wholly owned Subsidiary of Linde AG)

iii) Fellow Subsidiaries and Joint Venture with whom transactions have taken place during the year

(a) Located outside India

Fellow Subsidiary Country

BOC Australia Pty Limited Australia

BOC Bangladesh Limited Bangladesh

Chemogas N.V Belgium

Linde Electronics & Speciality Gases (Suzhou) Company Limited China

Linde Gas (Ningbo) Ltd. China

BOC China Holdings Company Limited China

Cryostar Sas France

MAPAG Valves GmbH Germany

Hong Kong Oxygen & Acetylene Co Limited Hong Kong

Linde Gas Hungary Co. Limited Hungary

Linde Electronics Gases Japan Limited Japan

BOC Kenya Limited Kenya

Mox Gases Sdn Berhad Malaysia

Consolidated Industrial Gases Inc Philippines

Linde Gas Asia Pte Limited Singapore

Linde Gas Singapore Pte. Limited Singapore

Afrox South Africa

Linde Electronics South Africa (Pty) Limited South Africa

Aga-Cryo Ab Sweden

Thai Industrial Gases Public Co Limited Thailand

BOC Limited United Kingdom

Linde Cryoplants United Kingdom

BOC Process System United Kingdom

BOC Gases, US United States of America

BOC Inc. United States of America

Spectra Gases, Inc. United States of America

Linde BOC Process Plants Lie United States of America

Linde Electronics Limited United States of America

(b) Located in India Fellow Subsidiary

Linde Global Support Services Private Limited Linde Process Technology India Private Limited Linde Engineering Private Limited

Joint Venture

Bellary Oxygen Company Private Limited

iv) Key Management Personnel of the Company

S Menon, Managing Director (with effect from 23 October 2008) K Roy, Finance Director (with effect from 23 February 2009) E R Raj Narayanan, Managing Director (till 30 April 2008)

(xv) Expenses are net of reimbursements received asgresatins Rs. 164,470 (Previous Year Rs. 129^030)

(xvi) Previous years figures have been rearranged/ regrouped where considered necessary to conform to current years presentation.