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Directors Report of I G Petrochemicals Ltd.

Mar 31, 2015

Dear Members

The Directors hereby present the Twenty Sixth Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2015 :

1. FINANCIAL RESULTS Rs. in Lacs 2014-2015 2013-2014

Revenue from Operations (Gross) 29,727.37 132,153.75

Less: Excise duty 10,921.75 11,724.16

Revenue from Operations (Net) 18,805.62 120,429.59

Other Income 790.40 968.25

Total Revenue 19,596.02 121,397.84

Gross Profit 8692.85 7,016.76

Less:

Finance Cost 3,816.53 3,036.22

Depreciation and Amortisation expenses 1,639.36 1,803.34

Profit/(Loss) before exceptional item & Tax 3,236.96 2,177.20

Exceptional Item - Exchange Loss (Net) - 1,785.85

Profit/(Loss) before extraordinary item & Tax 3,236.96 391.35

Extraordinary item - Depreciation relating to earlier years 2,111.10 -

Profit before Tax 1,125.86 391.35

Tax Expenses:

Current Tax Net (MAT) 236.19 78.27

Profit for the year 889.67 313.08

Balance brought forward from previous year 18,007.70 17,694.62

Profit available for appropriations 18,897.37 18,007.70

Appropriations

Proposed Equity Dividend @ 10% 307.95 -

Tax on Equity Dividend 62.69 -

General Reserve 500.00 -

Depreciation in respect of Assets whose use 116.69

Surplus carried to the next year''s account 17,910.04 18,007.70

2. DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs. 1/- per equity share of Rs. 10/- each. The total outgo for the current year amounts to Rs. 370.64 Lacs, including dividend distribution tax of Rs. 62.69 Lacs (previous year - Nil).

During the year, the unclaimed interim dividend for the year 2007-2008 was transferred to the Investor Education and Protection Fund after giving due notice to the Members.

3. OPERATIONAL REVIEW

The Company''s expansion project was completed during September 2013 and had stabilized operations during the previous year. The Company delivered a solid performance and achieved a Net Sales Turnover from operations of Rs. 118,805.62 Lacs as against Rs. 120,429.59 Lacs for the previous year 2013-2014. The production was marginally lower due to closure of one of its Plant for change of Catalyst during September 2014. However the Profit before extraordinary item and Tax was substantially higher at Rs. 3236.96 Lacs as against Rs. 2177.20 Lacs in the previous year. After providing for arrears of Depreciation of Rs. 2111.10 Lacs for the previous years, the Net Profit during the year was Rs. 889.67 Lacs as against Rs. 313.08 Lacs during the previous year 2013-2014.

The operating margins were stable during the first half of the year. However due to steep fall in international crude oil prices since September 2014, all the downstream product prices plunged during the period which resulted in heavy inventory pile ups and losses during the third quarter of the year. The customers deferred their procurements till the crude oil prices stabilized during January 2015 and there were no imports during the period. However due to arrest of downfall of oil prices there was sudden reversal in trend with upward movement of oil prices, thereby pushing up prices of downstream petro products including Phthalic Anhydride (PA) prices. This led to steady price rise and heavy order position during the last quarter of the year thereby increasing the margins substantially.

The positive situation continues despite imports of PA as customers are still facing shortage of product and require to build up minimum inventory levels for their stable operations. The international markets are also picking up and the Company exports surplus stocks as and when available after meeting the domestic demand in India.

4. SHARE CAPITAL & FINANCE

4.1 Share Capital

The Paid-up Equity Share Capital of the Company as on 31st March, 2015 is Rs. 3079.81 Lacs. During the year under review, the Company has neither issued any shares nor granted stock options or sweat equity. As at 31st March, 2015 the Promoters and Persons Acting with Promoters hold 72.22% of equity capital of the Company.

4.2 Finance

The Company continues to focus on judicious management of its Working Capital requirements from Banks which were Rs. 371.20 Lacs (both fund based and non-fund based) during the year (previous year Rs. 228.23 Lacs). The Company had also availed Rupee Term Loan of Rs. 65 crores of which an amount of about Rs. 9.22 crores is converted into Foreign Currency loan and External Commercial Borrowings (ECB) of € 8.70 million outstanding as on 31st March 2015 for its PA-3 expansion project. There is continuous monitoring of the requirement of funds and the efforts to keep the interest outgo at the minimum.

4.3 Deposits

The Company has not accepted deposits from the Public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

4.4 Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

5. CONTRIBUTION TO THE EXCHEQUER

The Company has contributed Rs. 15,654.03 Lacs to the Central and State exchequer by way of Excise Duty, Central Sales Tax, MVAT, VAT, Income Tax, Wealth Tax, Professional Tax and Customs Duty.

6. ECONOMIC SCENARIO AND OUTLOOK

The macro-economic situation of India improved during 2014 thereby helping the economy rise to 5.12% from 4.7% in the previous year. The proactive measures taken by the Government coupled with the falling oil prices has resulted in improving the wholesale and consumer price inflation to 4.12% and 7.4% from the previous year''s figures of 6.3% and 10.1% respectively. The agricultural growth was strong at 4.5% in 2014, however the slow pace of reforms, lack of impetus for infrastructure projects, high interest rates, sluggish industrial growth and tightening of fiscal policies adversely impacted the industrial sector.

The low economic growth appears to have bottomed out and a gradual increase in economic activity is expected in 2015. The medium term to long term prospects look positive in view of the Government''s determination to bring in reforms. For the year 2015, the economy is expected to grow at a higher rate than in 2014. The long term prospects for the economy is optimistic.

7. PA INDUSTRY - OPPORTUNITIES, CONCERNS AND FUTURE OUTLOOK

The Indian PA industry has an installed capacity of 340,000 MT and the domestic consumption during the calendar year 2014 was about 3,00,000 MT. The overall PA demand is estimated to grow at the rate of 8 % in 2015. With more thrust and investment in infrastructure segment the consumption is expected to grow. With the gradual reduction in fiscal deficits and consumer price index, it is expected that the interest rates would gradually come down which would stimulate demand in the consumer sector. The Company''s continued focus on cost reduction and increasing the sale of product and various other customer satisfaction initiatives should help in presenting an improved performance.

The business operations of the Company is exposed to general commercial risks viz. volatility in demand and supply, raw material prices, logistic issues, government policies, exchange rate risk, increasing in dumping of PA and other environmental and technical risks.

With the completion of expansion and stability achieved in production, the company is the largest producer of PA in India and amongst the top five producers of PA in the world. The integration of three units and advantages of economies of scale, the Company is one of the lowest cost producers of PA in the world which has helped in improving the profitability and hope to sustain in the years to come.

In view of the large production capacity the Company is exploring opportunities to de-risk its existing business by captive consumption of PA for certain value added products for further growth.

8. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

As part of its commitment towards being a responsible corporate citizen, the Company has continued its efforts seamlessly by initiating various measures as a part of its CSR by undertaking projects in the field of education, healthcare and livelihood in the areas where its major operations are carried out i.e. Taloja. The Company, from time to time, has also contributed to the NGO''s involved in the medical and child welfare schemes apart from the donations to the schools for purchase of education materials and computers. The contributions have been in accordance with Schedule VII of the Companies Act, 2013.

The Annual Report on CSR activities is annexed herewith as "Annexure A".

9. RISK MANAGEMENT

The Company manufactures a single product PA which is produced by consumption of single raw material Orthoxylene (OX) by oxidation route. Hence there are only the general business risks which are inherent to any business. The Board of Directors do a periodic assessment of risks through properly defined framework and its mitigation resulting in minimization of risks.

The key business risks identified by the Company and its mitigation plans are as under:

9.1 Operational/Price Risk:

The Company''s Plants operated uninterruptedly during the year except for minor technical interruptions and during the month of September/October for about four weeks for change of Catalyst. Also there was a steep fall in the international crude oil price from a high of about 115 US$ to 45 US$ during the period September 2014 to January 2015 due to which all the downstream petro products witnessed a sharp fall in their prices. The Company''s Plants are adequately insured viz. Fire Policy, Loss of Profit Policy, etc. The preventive and predictive maintenance activities are carried out on a day to day basis. The down time during shut downs is utilized for carrying out routine maintenance work. Also the Company maintained minimum inventory of raw materials and finished goods which helped in minimizing the loss due to steep fall in the petro products feedstock which was witnessed during that period.

9.2 Exchange Rate Risk (raw material procurement and sale of finished goods):

The Company procures 75% of the raw material from local source at monthly Contract rate. The balance is either imported or bought domestically on spot basis. About 20% is exported and 80% is sold in DTA market. As Company procures 75% of its raw material requirement from local source, forex hedging is not required. As regards import of raw material, foreign exchange is booked whenever necessary. All the exports of goods are booked by forward cover. There is continuous monitoring of the price of Orthoxylene (raw material) and Phthalic Anhydride (finished goods) in the local and international markets due to fluctuation in prices.

9.3 Interest Rate Risk:

The Company has availed External Commercial Borrowings (ECB), Rupee Term Loans (RTL) and Working Capital Loans (WCL) for its project and working capital needs. Some of the RTL is converted to Foreign currency loan in order to save on interest cost. The loans are strictly repaid as per the repayment schedules. The Company reviews the loan position on regular basis to keep the interest cost at minimum levels.

9.4 Economic and Geo-political Risk:

The political situation and the Government policies viz. import duty, taxes etc. and the international situation have an impact on the overall corporate growth. The Government has Notified the Anti-dumping duty during December 2012 for a period of five years on Korea, Taiwan and Israel. Application is made to the Directorate General, Safeguards for extension of Safeguard Duty on PA. Also Writ Petition has been filed with the Hon''ble High Court, Delhi in the matter of Anti-Dumping duty on imports of PA from Korea, Taiwan and Israel. The Company keeps abreast with the domestic and international economic developments and works on the strategies favourable to it.

10. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Board has established a Vigil Mechanism Policy which would help identify and deal with instances of actual or suspected unethical behavior, etc., if any. The details of the vigil mechanism have been elaborated in the Corporate Governance Report and posted on the Company''s website www.igpetro.com.

11. DIRECTORS

On the basis of the the recommendation of the Nomination and Remuneration Committee, the Board of Directors have appointed Dr. Vaijayanti Pandit (DIN-06742237) as an Additional Director - Independent effective 30th March 2015. The Company has received a notice under Section 160 of the Companies Act, 2013 from a member signifying Dr. Vaijanti Pandit for the office of Director. In terms of Section 149 read with Section 152 of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of the Company and are not liable to retire by rotation. Accordingly it is proposed to appoint Dr. Vaijayanti Pandit as Independent Director of your Company for a term of five (5) consecutive years i.e. up to 29th March, 2020.

Shri M M Dhanuka retires by rotation and being eligible has offered himself for re-appointment.

The brief profile of the Directors seeking appointment/re-appointment has been given in the notice conveing the Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

11.1 Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the working of the Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

11.2 Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors and Senior Management personnel and determination of their remuneration. The Remuneration Policy forms part of the Corporate Governance Report.

11.3 Meetings

During the year four Board Meetings and an equal number of Audit Committee Meetings were convened and held. The details of the same are given in the Corporate Governance Report. The intervening gap between any two Meetings was within the period prescribed under the Companies Act, 2013.

12. DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Companies Act, 2013, we state:

a) that in the preparation of the annual financial statements for the year ended 31st March 2015, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2015 and of the profit of the Company for that year;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing/ detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

13. RELATED PARTY TRANSACTIONS

The Company has certain long term related party transactions which are on arm''s length basis and in the ordinary course of business. During the year under review, there were no related party transactions within the meaning of Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of the Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. The Board has framed a policy on Related Party Transactions which is hosted on the Company''s website www.igpetro.com.

14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

The Company received a boost when in respect of a case pending before the Supreme Court with regard to the valuation of Domestic Tariff Area (DTA) sales was decided in the Company''s favour. This Order absolves the Company of the contingent liabilities related to Excise and Customs duties to the extent of Rs. 128.75 Crores pending before the Supreme Court, disputes in appeals and show cause notices received from the concerned departments.

Other than the above there are no significant material orders passed by the Regulators/courts which would impact the going concern status of the Company and its future operations.

15. AUDITORS

15.1 Statutory Auditors

The Statutory Auditors, M/s. Hariharan & Co. Chartered Accountants, Bengaluru (Firm''s Registration No. 001083S) retire at the ensuing Annual General Meeting and are eligible for re-appointment for the financial year 2015-2016. The Company has obtained a written confirmation from M/s. Hariharan & Co. to the effect that they are eligible for re-appointment and that their re-appointment, if made, would be in conformity with the limits specified in Section 141 of the Companies Act, 2013. As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI).

Your Directors recommend their re-appointment as the Statutory Auditors to hold office for a term of two consecutive years from the conclusion of this Annual General Meeting (AGM) until the conclusion of the 28th AGM of the Company to be held in the year 2017 subject to the ratification of their appointment at the next AGM to be held in the year 2016.

Observations made by the auditors under "Emphasis of Matter" has been dealt with in Note No. 23 regarding certain disputed excise duty and custom duty matters amounting to Rs. 6383.84 Lacs ( Previous Year Rs. 7672.89 Lacs) pending before the Honourable Supreme Court.

15.2 Appointment of Joint Statutory Auditor

M/s ASA & Associates LLP Chartered Accountants, Mumbai (Firm Registration No. 009571N/N500006) have been appointed as Joint Statutory Auditors of the Company for the financial year 2015-16 and to hold office, subject to the approval of the members, for a term of five consecutive years i.e. until the conclusion of the AGM to be held in the year 2020 (subject to the ratification of their appointment at each AGM).

The Joint Statutory Auditor have signified their assent and confirmed their eligibility in terms of the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and that they hold a valid certificate issued by the Peer Review Board of the ICAI.

Your Directors recommend their appointment as Joint Statutory Auditors for the financial year 2015-16 to hold office for a term of five consecutive years i.e. until the conclusion of AGM of the Company to be held in the year 2020 subject to the ratification of their appointment at each AGM.

15.3 Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company in respect of Phthalic Anhydride is required to be audited. Your Directors had, on the recommendation of the Audit committee, appointed M/s. Krishna S & Associates, Cost Accountant, Mumbai, to audit the cost records of the Company for the financial year 2015-2016 at a remuneration of Rs. 40,000/-. As required under the Companies Act, 2013, members approval is sought for the remuneration payable to the Cost Auditor.

15.4 Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Makar and M Joshi & Associates, a firm of Company Secretaries in Practice to conduct the Secretarial Audit and their Report on the Secretarial Audit for the financial year 2014-15 is annexed herewith as "Annexure B".

16. LISTING OF SHARES

Your Company''s shares are listed on BSE under Scrip Code No. 500199 and the NSE under the symbol "IGPL"''. The ISIN code is INE 204A01010.

17. ISO 9001: (2008) AND ISO 14001 (2004) CERTIFICATION

Your Company continued to be certified under ISO 9001 : (2008) for quality management systems and ISO 14001 : (2004) for environment management systems by Beaureu Veritas as per their prescribed standards.

18. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company''s Auditors confirming compliance forms an integral part of this Report.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure C".

20. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual return in Form MGT-9 is annexed herewith as "Annexure D".

21. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office/ Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard..

22. ACKNOWLEDGEMENTS

Your Directors sincerely thank the Central and State Government Departments and various Organizations for their continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for their excellent support. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board

Place : Mumbai M M Dhanuka Date : 10th July 2015 Chairman


Mar 31, 2014

The Members

The Directors hereby present the Twenty Fifth Annual Report together with Audited Accounts of the Company for the year ended 31st March 2014:

1. FINANCIAL RESULTS Rs. in Lacs

2013-2014 2012-2013

Revenue from Operations (Gross) 132,153.75 106,718.64

Less: Excise duty 11,724.16 9,684.73

Revenue from Operations (Net) 120,429.59 97,033.91

Other Income 968.25 528.37

Total Revenue 121,397.84 97,562.28

Gross Profit 7,016.76 6,197.08

Less:

Finance Cost 3,036.22 1,667.29

Depreciation and Amortisation Expenses 1,803.34 1,375.02

Profit/(Loss) before exceptional item & Tax 2,177.20 3,154.76

Exceptional Item – Exchange Loss (Net) 1,785.85 --

Profit/(Loss) before extraordinary item & Tax 391.35 3,154.76

Extraordinary item – Depreciation relating to earlier years -- 2,765.78

Profit before Tax 391.35 388.98

Tax Expenses:

Current Tax Net (MAT) 78.27 79.68

Tax provision for earlier year -- 1.41

Profit for the year 313.08 307.89

Balance brought forward from previous year 17,694.62 17,386.73

Profit available for appropriation 18,007.70 17,694.62

2. DIVIDEND

The Directors do not recommend any dividend in order to conserve resources.

3. OPERATIONAL REVIEW

The expansion project of 50,000 MT was completed during September 2013 thereby increasing the total production capacity to 1,66,110 MT. The Company delivered sustainable performance and achieved a production of 1,28,076 MT. for the year 2013-2014 as compared to 1,06,662 MT. during the previous year 2012-2013. The production was marginally lower due to closure of one of its Plant for change of Catalyst. The Net Sales Turnover from operations was Rs. 120,429.59 Lacs as against Rs. 97,033.91 Lacs for the previous year 2012 -2013, an increase of 24.11 % over the previous year. Net Profit during the year was Rs. 313.08 Lacs as against Rs. 307.89 Lacs during the previous year 2012-2013

The operating margins were stable during most part of the year. However due to significant movement and volatility in value of Indian Rupee against US Dollar the Company suffered foreign exchange loss to the tune ofRs. 1,785.85 Lacs which affected the performance and profitability of the Company. The crude oil prices remained high during the first three quarters due to which the raw material prices were high. However the last quarter witnessed easing of raw material prices due to which the margins were better and are expected to remain so.

In view of the increased production due to expansion, the Company has increased the export sales which helps in hedging the volatility of the Rupee. The international markets are gradually picking up and the realizations are better compared to the previous years

The Company continues to avail the Working Capital limits from various banks of around Rs. 288 crores (both fund based and non-fund based) during the year (Previous year Rs. 170 crores). The Company has also availed Rupee Term Loan of Rs. 65 crores (Previous year Rs. 41 crores) from Banks and External Commercial Borrowings (ECB) of EURO 11.329 million (Previous year EURO 10.140 million) as project finance to fund the PA-3 project which was completed during September 2013.

4. CONTRIBUTION TO THE EXCHEQUER

The Company has contributed Rs. 17475.26 Lacs to the Central and State Exchequer by way of Excise Duty Sales Tax (including Surcharge), Income Tax, Wealth Tax, Professional Tax and Customs Duty.

5. OPPORTUNITIES, CONCERNS AND FUTURE OUTLOOK

The global economic slowdown that started a few years ago increased the complexity and volatility in the environment. Even though the Indian economy was able to sustain the growth momentum during that year, the stress on the economy had started to show during 2011. In subsequent years the growth rate for GDP continued to slide even lower. Various factors, both internal and external have contributed to this including the political environment, high fiscal deficit, consistently high inflation, and volatility in currency.

The environment continued to remain challenging during the year. Despite a good monsoon the manufacturing indices declined. Commodity prices continued peaking with food inflation hitting all time highs, resulting in high overall inflation Rupee depreciated significantly before reviving a little, and the consumer sentiment remained subdued as well. These are the areas of serious concern but the general consensus remains optimistic about long term growth. The Government and the Reserve Bank managed to control the exchange rate fluctuation to some extent with appropriate monetary and fiscal policies during the latter part of the year. The economic potential of India remains promising. The current state of economic and social turmoil in the country indicates a desire for balanced growth. We hope that the transformation will lead to greater stability and future growth, thereby strengthening and unlocking India''s economic potential

The business operations of the Company are susceptible to risks which are inherent to any petrochemical business as well as to those inherent to international operations. Apart from these, there is always an exposure to general commercial risks which accrue to any commercial organization. The PA industry in particular continues to remain under severe pricing pressures, high raw material costs, volatility in demand and supply, government policies, exchange rate risk, increase in dumping of PA into the country and other technical and environmental risks. The Board of Directors do a periodic assessment of the risks through a means of properly defined framework resulting in minimization of risk involved

The Company''s expansion project of 50,000 MT was completed during the year and commercial production commenced during September 2013. In view of the same the Company is the largest producer of PA in India and one of the largest in the world. Due to the integration of three units at one place by optimum utilization of existing facilities and the advantages of economies of scale, the Company would be one of the lowest cost producers of PA in the world. In view of the increased production and reduction in costs the performance of the Company will improve in the years to come.

The Company is exploring to add certain value added products to captively utilize the large production capacities to de-risk the existing business and fuel growth

6. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 the Company has constituted the Corporate Social Responsibility (CSR) Committee of Directors comprising of Shri Rajesh Muni (Independent Director) as Chairman and Shri M M Dhanuka and Shri J K Saboo as other Members.

The terms of reference:

The Company''s CSR Policy shall ensure the following -

a) To identify core areas where social activities are required to be done i.e. eradicating hunger, poverty and malnutrition promoting preventive health care and sanitation and making available safe drinking water.

b) promoting education among children, women, elderly, and the differently abled and livelihood enhancement projects.

c) rural development projects.

7. LISTING OF SHARES

Your Company''s shares are listed on the Bombay Stock Exchange (BSE) under Scrip Code No. 500199 and National Stock Exchange Ltd. (NSE) under the symbol "IGPL". The ISIN code is INE 204A01010

8. ISO 9001 : (2008) AND ISO 14001 (2004) CERTIFICATIONS

Your Company continued to be certified under ISO 9001 : (2008), for quality management systems, and ISO 14001: (2004) for environment management systems, by Beaureu Veritas as per their prescribed standards.

9. DIRECTORS

Shri M M Dhanuka retires by rotation and being eligible has offered himself for reappointment.

Shri P H Ravikumar was co-opted on the Board w.e.f. 30th October 2012 due to the casual vacancy created by resignation of Shri Premjit Singh Marwah. In terms of Section 161 of the Companies Act, 2013, Shri P H Ravikumar would have held office up to the date of the ensuing Annual General Meeting and accordingly, the term of Shri P H Ravikumar as a Director appointed in casual vacancy will expire at the ensuing Annual General Meeting. Shri P H Ravikumar is being appointed as the Director of your Company at the ensuing Annual General Meeting.

In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent directors can hold office for a term of up to five (5) consecutive years on the Board of your Company and are not liable to retire by rotation. Accordingly, it is proposed to appoint Shri P H Ravikumar, Shri Rajesh Muni and Dr. A K A Rathi as Independent Directors of your Company up to five (5) consecutive years for the term up to the conclusion of the 30th Annual General Meeting of the Company in the calendar year 2019

Shri J K Saboo, Executive Director is being re-appointed for a further period of three (3) years in the forthcoming Annual General Meeting of the Company.

10. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

a) in the preparation of the annual accounts, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2014 and of the profit of the Company for that year;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under section 217(1)(e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, information on conversation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

12. PARTICULARS OF EMPLOYEES

There is no employee drawing the requisite remuneration, in terms of section 217(2A) of the Companies Act, 1956

13. CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance, along with Auditors'' Certificate on its compliance, forms a part of this Annual Report.

14. AUDITORS AND AUDITOR''S REPORT

The Company''s Auditors, M/s. Hariharan & Company, Chartered Accountants, Bengaluru (Firm''s Registration No.001083S) retire at the ensuing Annual General Meeting and are eligible for reappointment for the financial year 2014-15. As per the requirement of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Hariharan & Company that their appointment, if made, would be in conformity with the limits specified in the said Section. Your Directors commend their appointment for the ensuing year.

Observations made in para ''Basis for qualified opinion'' has been dealt with in Note 5 - Fixed Assets, Note No. 4.

15. COST AUDITORS

As per the requirements with the Central Government and pursuant to the provisions of section 233B of the Companies Act, 1956 your Company has been carrying out an audit of cost records relating to Phthalic Anhydride.

The Company has appointed M/s. Krishna S & Associates, Cost Accountants, Mumbai, as Cost Auditors to audit the cost accounts of the Company for the financial year 2014-15

The Cost Audit Report for the financial year 2012-13 was filed with the Ministry of Corporate Affairs on 27th September 2013

16. ACKNOWLEDGEMENT

The Board expresses its sincere gratitude to the shareholders, Bankers, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

For and on behalf of the Board

Place : Mumbai M M Dhanuka

Date : 22nd May 2014 Chairman


Mar 31, 2013

To The Members

The Directors hereby present the Twenty Fourth Annual Report, together with Audited Accounts of the Company for the year ended 31st March 2013:

1. FINANCIAL RESULTS

Rs.in Lacs

2012-2013 2011-2012

Revenue from Operations (Gross) 106,718.64 95.537.44

Less: Excise duty 9,684.73 6,930.24

Revenue from Operations (Net) 97,033.91 88,607.20

Other Income 528.37 389.32

Total Revenue 97,562.28 88,996.52

Gross Profit 6,197.08 4,614.96

Less:

Finance Cost 1,667.29 1,464.94

Depreciation and Amortisation Expenses 1,375.02 1,490.18

Profit/(Loss) before extraordinary item & Tax 3,154.76 1,659.84

Extraordinary item - Depreciation relating to earlier years 2,765.78

Profit before Tax 388.98 1,659.84 Tax Expenses:

Current Tax Net (MAT) 79.68 330.81

Tax provision for earlier year 1.41

Profit for the year 307.89 1,329.03

Balance brought forward from previous year 17,386.73 16,057.70

Profit available for appropriation 17,694.62 17,386.73



2. DIVIDEND

The Directors do not recommend any dividend in order to conserve resources.

3. OPERATIONAL REVIEW

The Company has delivered a sustainable and healthy performance during the year with Gross Revenue from Operations - crossing the ONE THOUSAND CRORE MARK amounting to Rs. 1,067.18 Crores as against t 955.37 Crores during the previous year 2011-2012 recording a growth of 11.70%. The production of Phthalic Anhydride (PA) was 1,06,662 MT at 91.86% during the year, as against 1,15,673 MT at 99.62% during 2011-2012. The production was marginally less during the year due to closure of Plants on a couple of occasions. Net Profit before extraordinary item was higher at Rs. 3,154.76 Lacs as against Rs. 1,659.84 Lacs in the previous year 2011- 2012. The Net Profit after extraordinary item was Rs. 307.89 Lacs.

The operating margins increased during first half of the year on account of improved realizations due to healthy growth in the domestic market as imports become dearer due to Safeguard duty from January 2012 for one year. However due to high international crude oil prices the downstream products including the raw material prices rose to exponential heights and the margins for PA saw declining trends especially during the third quarter of the year. Though there is some easing of raw material prices the current situation remains sluggish due to huge dumping of PA from Korea, Israel, Taiwan and other countries.

The export market remains subdued though there are some signs of the international markets gradually picking up.

In furtherance to the efforts taken by the PA manufacturers association for making representation to the Government for imposing anti-dumping duty, the Government has during December 2012 implemented the anti-dumping duty for a period of five years on PA originating/exported from Korea RR Taiwan and Israel.

The Company has sold 1,06,065 MT of PA during the year, of which 82,982 MT is sold in DTA, 12,641 MT in exports and 10,442 MT in deemed exports. The Company sells nearly 75% in the local market and rest is sold in export and deemed export market.

The Company continues to avail the Working Capital limits from various banks of around Rs. 170 Crores (both fund based and non-fund based) during the year,

4. CONTRIBUTION TO THE EXCHEQUER

The Company has contributed Rs. 16,405 Lacs to the Central and State exchequer by way of Excise Duty, Sales Tax (including Surcharge), Income Tax, Wealfh Tax, Professional Tax and Customs Duty.

5. OPPORTUNITIES, CONCERNS AND FUTURE OUTLOOK

The Indian economic environment during, the year has been tough and the growth has moderated due to various internal and external factors. The uncertainty and recessionary trends in the global economies has affected and compounded the complexity in the domestic environment. The GDP growth rate remained positive despite of economic sentiment remaining subdued on account of widening fiscal deficit, spiraling inflation and high interest rates. The emerging focus on corruption issues has further dampened the sentiments. These are the areas of serious concern but the general consensus remains optimistic about the long term growth.

The Company anticipates that the growth rates will show steady recovery and the momentum will revive soon. The Governments thrust on infrastructure development continues with the result that the construction industry and all the related industries should grow steadily. PA is the raw material for various industries, such as paints, PVC, plasticizers, resins, transportation, construction and marine, plastic products, textile dyes, printing inks and other chemicals. The major demand for PA is in the western and northern India as the users are clustered in these areas. The Company has the advantage of procuring raw material and selling finished goods in this area due to which the conversion cost is one of the lowest in the world.

The Company''s expansion project for increase in capacity by 50,000 MT. is progressing as per schedule and the commencement of commercial production of the Plant is expected during the second quarter-of the current financial year 2013-2014. After expansion the Company would be the largest producer of PA in India and one of the largest in the world at a single location. It would be one of the lowest cost producers of PA in the world and the profitability is expected to considerably improve due to optimum utilization of the existing facilities.

As a forward integration measure the Company is looking to add certain value added products to captively utilize the large capacities which would be available after expansion to fuel growth and help in derisking the existing business.

6. CORPORATE SOCIAL RESPONSIBILITY

A strong pillar of the Company''s foundation, its Social Responsibility initiatives are focused on activities related to customers, employees, shareholders, communities and the environment in all aspects of its operations. The Company goes beyond the requirements of applicable environmental laws through:

- Optimizing usage of Raw Material and Chemicals

- Conserving Power arid Water

- Adopting preventive measures to reduce waste and air emissions

- Waste minimization

- Ensuring a safe working environment

- Employee education on environment issues

- Educating suppliers & buyers to become environmentally responsible

Aforestation and Rain Water Management: The manufacturing site at Taloja, Maharashtra has good aforestation and green belts.

ISO 14001 (2004): Environment Management System certification acquired by the Company is an endorsement of its continuous and relentless environmental initiatives.

The Company encourages its employees to contribute to their communities in a manner of their choice.

7. LISTING OF SHARES

Your Company''s shares are listed on the Bombay Stock Exchange (BSE) under Scrip Code No. 500199 and National Stock Exchange Ltd. (NSE) under the symbol "IGPC. The ISIN code is INE204A01010.

8. ISO 9001 : (2008) AND ISO 14001 (2004) CERTIFICATIONS

Your Company continued to be certified under ISO 9001 : (2008), for quality management systems, and ISO 14001: (2004), for environment management systems, by Beaureu Veritas as per their prescribed standards.

9. DIRECTORS

Shri Premjit Singh resigned from the directorship of the Company. The Directors wish to place on record their appreciation of the valuable services rendered by Shri Premjit Singh during his long association as Director of the Company.

Shri P H Ravikumar has been appointed as a Director in the casual vacancy caused by the resignation of Shri Premjit Singh.

Shri Rajesh Mu''ni retires by rotation and, being eligible, has offered himself for reappointment.

10. DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

a) in the preparation of the annual accounts, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31si March 2013 and of the profit of the Company for that year;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under section 217(1 )(e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, information on conversation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

12. PARTICULARS OF EMPLOYEES

There is no employee drawing the requisite remuneration, in terms of section 217(2A) of the Companies Act, 1956.

13. CORPORATE GOVERNANCE

In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance, along with Auditors'' Certificate on its compliance, forms a part of this Annual Report.

14. AUDITORS AND AUDITOR''S REPORT

The Company''s Statutory Auditors, M/s, Hariharan & Co., Chartered Accountants, Bengaluru retire at the forthcoming Annual General Meeting and are eligible for reappointment. Your Directors recommend their appointment for the ensuing year.

Observations made in paragraphs 4(vi) have been dealt with in Schedule 5 - Fixed Asgets Note No. 4(b).

15. COST AUDITORS

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and with the prior approval of the Central Government, Mr. Krishna S (Membership No. 27415), Practising Cost Accountant, Mumbai has been appointed to conduct audit of cost records of Phthalic Anhydride for the financial year ending 31st March 2014.

The Compliance Report for Phthalic Anhydride for the year ended 31s1 March 2012 was filed with the Central Government on 11,,h January, 2013. The Cost Audit Report for the year ended 31Et March 2013 shall be filed with the Central Government within the stipulated time.

16. ACKNOWLEDGEMENT

The Directors wish to thanks all the employees of the Company for their dedicated service during the year and also like to place on record their appreciation for the continued co-operation and support received during the year from bankers, financial institutions, business partners and other stakeholders.

For and on behalf of the Board

Place : Mumbai MM Dhanuka

Date : 20th May 2013 Chairman


Mar 31, 2012

The Directors hereby present the Twenty Third Annual Report, together with Audited Accounts of the Company for the year ended 31st March 2012:

1. FINANCIAL RESULTS Rs.in lacs

2011-2012 2010-2011

Revenue from Operations (Gross) 95,537.44 68,088.29

Less: Excise duty 6,930.24 4,958.77

Revenue from Operations (Net) 88,607.20 63,129.52

Other Income 389.32 93.96

Total Revenue 88,996.52 63,223 48

Gross Profit 4,614.96 4,488.70

Less:

Finance Cost 1,464.94 1,415.76

Depreciation/Amortization Expenses 1,490.18 1,420.59

Profit before Taxation 1,659.84 1,652.35

Tax Expenses:

Current Tax (MAT) 330.81 329.32

Profit for the year 1,329.03 1,323.03

Balance brought forward from previous year 16,057.70 14,734.67

Profit available for appropriation 17,386.73 16,057.70

2. DIVIDEND

The Directors do not recommend any dividend this year in order to conserve resources.

3. OPERATIONAL REVIEW

It has been a good year for the Company, which has delivered a stellar performance by achieving a production of 115673 MT at 99.62% during the year, as against 109147 MT at 94% during 2010-2011, This performance came despite the closure of one of the PA plants for about 10 days during November 2011, causing production losses. The Net Revenues were higher at Rs 88,607.20 lacs as against Rs 63,129.52 lacs. Net Profit was Rs 1,329.03 lacs as against Rs 1,323.03 lacs.

Though the Company operated at nearly 100% and sold almost all its produce, the PA market was sluggish, especially during the third quarter of the year, as the market conditions were unfavorable due to heavy dumping in the local markets. This led to a squeeze on margins, thereby affecting profitability for the first three quarters. Further, the high international crude oil price caused prices of downstream products including, Orthoxylene (OX) to be on the rise throughout the financial year. The declining rupee rate added to the Company's woes.

In an effort to combat the problem, the PA manufacturers association made a representation to the Government for imposing Safeguard duty on PA to avoid dumping of PA at cheap rates, and to ease the margin pressure and achieve sustainability. Responding to the PA manufacturers' 13163, the Government introduced a Safeguard Duty, in January 2012, of 10% ad-valorem for a period of one year. This resulted in imports becoming dearer and the industry started showing some signs of improvement. Boosted by these developments, the Company expects sustainable growth with improved margins in the current year.

The Company has sold 117207 MT of PA during the year, of which 82052 MT is sold in DTA, 18863 MT in exports and 16292 MT in deemed exports. The Company sells nearly 70% in the local market and rest is sold in export and deemed export market.

The Company has been sanctioned the Working Capital limits from various banks ofRs 14,900 lacs (both fund based and non-fund based) during the year.

4. CONTRIBUTION TO THE EXCHEQUER

The Company has contributed Rs 10,450.81 lacs to the Centra! and State exchequer by way of Excise Duty, Sales Tax (including Surcharge), Income Tax, Wealth Tax, Professional Tax and Customs Duty.

5. OPPORTUNITIES, CONCERNS AND FUTURE OUTLOOK

With greater and continued thrust on infrastructure, the Indian economy is expected to grow at 7% in the current year. The macro-economic environment continues to cause concern on account of various factors, such as high fiscal deficit, widening Balance of Payment position, inflationary pressures, forex volatility, etc. which pose a serious threat and challenge to sustained growth. The Company hopes that the Government will address these issues suitably.

Till the time, however, that .strong policy decisions are taken to tackle these challenges, the overall industrial scenario, and the PA industry in particular, faces a tough and challenging situation. On the positive side, however, the Safeguard Duty on PA would help tide over the crisis and enable the industry to sail through smoothly. In the long term, the macro-economic fundamentals are conducive for business growth and sustainability. There is a strong demand for PA, which we are well placed to leverage on the back of our focused strategies to expand capacities. This, going forward, shall form the foundation for the Company's sustainable growth.

The Company's expansion project is well on stream and should be completed within the targeted timeline of first quarter of the Financial year 2013-2014. On completion of the project, the total expanded PA capacity of the Company would be 166110 MT. This would help the Company mitigate some of the challenges of the increasing cost pressures arising out of volatile raw material prices, thus strengthening our gross margins. With this expanded capacity, the Company would be one of the largest and the lowest cost producers of PA in the world. Besides, the Reserve Bank has softened the interest rates to fuel growth in the economy and the commercial banks are expected to follow suit, thereby improving the margins.

PA is a vital industrial material and is growing steadily at 8-10% in tandem with the growth of user industries viz. plasticizers, resins, paints, unsaturated polyster resins and dyes/pigments and other industries.

The Company is also exploring certain opportunities to captively utilize the huge capacity which would be available after expansion as a forward integration process, and add certain value added products to de-risk its existing business.

6. CORPORATE SOCIAL RESPONSIBILITY

A strong pillar of the Company's foundation, its Social Responsibility initiatives are focused on activities related to customers, employees, shareholders, communities and the environment in all aspects of its operations.

The Company goes beyond the requirements of applicable environmental laws through:

* Optimizing usage of Raw Material and Chemicals

* Conserving Power and Water

* Adopting preventive measures to reduce waste and air emissions

* Waste minimization

* Ensuring a safe working environment

* Employee education on environment issues

* Educating suppliers & buyers to become environmentally responsible

Forestation and Rain Water Management: The manufacturing site at Taloja, Maharashtra has good forestation and green belts.

ISO 14001 (2004): Environment Management System' certification acquired by the Company is an endorsement of its continuous and relentless environmental initiatives.

The Company encourages its employees to contribute to their communities in a manner of their choice.

7. LISTING OF SHARES

Your Company's shares are listed on the Bombay Stock Exchange (BSE) under Scrip Code No. 500199 and National Stock Exchange Ltd. (NSE) under the symbol IGPL', The ISIN code is INE 204A01010. "

8. ISO 9001 : (2008) AND ISO 14001 (2004) CERTIFICATIONS

Your Company continued to be certified under ISO 9001 : (2008), for quality management systems, and ISO 14001: (2004), for environment management systems, by Beaureu Veritas as per their prescribed standards.

9. DIRECTORS

Dr. A K A Rathi retires by rotation and, being eligible, has offered himself for reappointment.

10. DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that - .

a) in the preparation of the annual accounts, all the applicable accounting standards have been followed;

b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31s' March 2012 and of the profit or loss of the Company for that year;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under section 217(1 ){e) of the Companies Act, 1956, read with rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, information on conversation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

12. PARTICULARS OF EMPLOYEES

There is no employee drawing the requisite remuneration, in terms of Section 217(2A) of the Companies Act, 1956.

13. CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, a separate section on Corporate Governance Report, together with the Auditors' Certificate on compliance of the conditions of Corporate Governance, forms a part of this Annual Report.

14. AUDITORS AND AUDITOR'S REPORT

The Company's Statutory Auditors, M/s. Hariharan & Co., Chartered Accountants, Bengaluru retire at the forthcoming Annual General Meeting and are eligible for reappointment. Your Directors recommend their appointment for the ensuing year.

Observations made in paragraphs 4(vi) have been dealt with in Note No. 5 of Notes on Financial Statements.

15. COST AUDITORS

As per the requirement of the, Central Government and pursuant to Section 233B of the Companies Act, 1956, the Company is required to maintain the cost accounting records relating to Phthalic Anhydride for the year 2011-2012 and submit Compliance Report for that year. Accordingly the Company had appointed M/s. Krishna S & Associates, Cost Accountants, Mumbai as Cost Accountant for the year 2011 -2012 who shall submit the Compliance Report for that year by 30th September 2012.

Further in terms of the Notification No. G S R 430(E) dt. 3Id June 2011 issued by the Central Government, the Company is required to carry out an audit of cost records relating to Phthalic Anhydride every year commencing 2012-2013. Subject to the approval of the Central Government, the Company has appointed M/s. Krishna S & Associates, Cost Accountants, Mumbai as Cost Auditors to audit the cost accounts of the Company for the financial year 2012-2013.

16. ACKNOWLEDGEMENT

The Directors express their appreciation for the support received from the Central and State Governments, banks, stakeholders including shareholders, customers, suppliers and business partners and the contribution made by the employees at all levels in the operations of the Company. '

For and on behalf of the Board

Place : Mumbai M M Dhanuka

Date : 14 May 2012 Chairman


Mar 31, 2010

The Directors hereby present the Twentyfirst Annual Report together with Audited Accounts of the Company for I the year ended 31st March 2010 :

Financial Results

2009-2010 2008-2009

Rs. in lacs

Gross Sales 57398.95 59474.75

Less: Excise Duty 3212.53 3825.74

Net Sales 54186.42 55649.01

Other Income 697.06 195.90

54883.48 55844.91

Gross Profit 6106.88 3654.23

Less :

Interest & Finance Charges 1451.32 2135.55

Depreciation/ Amortisation 1364.59 1343.47

Profit/(Loss) before Taxation 3290.97 175.21

Taxation

Current Tax (MAT) 559.30 17.86

Fringe Benefit Tax - 17.56

Tax provision for earlier years - 7.11

Profit after Taxation 2731.67 132.68

Balance brought forwarded 12003.00 11870.32

from previous year

Profit available for 14734.67 12003.00 appropriation

Dividend

The Directors do not recommend any dividend in order to conserve resources.

Management Discussion and Analysis

Operations and Performance Review

The overall performance of the Company during the year was satisfactory with a production of 97870 MT. at 84.29% as against 106471 MT. at 91.70% during the previous year 2008-2009. The production was lower due to stoppage of one of the plants on account of Catalyst change and a fire during the 3rd quarter of 2009. The gross sales value was Rs. 57398.95 lacs as against Rs. 59474.75 lacs in the previous year. The Gross Profit was Rs. 6106.88 lacs as against Rs. 3654.23 lacs and Net Profit was higher at Rs. 2731.67 lacs as against Rs. 132.68 lacs during the previous year.

The Company has converted itself from 100% EOU into a domestic unit since 6th November 2008. As such the sale in the domestic market has increased since that period. Out of the total sales of 100315 MT. (106696 MT.), local sales was 64532 MT. (48093 MT.), deemed exports 17837 MT. (18479 MT.) and export sales was 17946 MT. (40124 MT.). The emphasis has therefore been on local markets which has resulted in better realizations. The balance quantity is sold to deemed exporters and overseas customers in view of the established contacts in the international markets all these years.

The Company has sold 15,06,240 units (17,31,000 units) of power to the Maharashtra State Electricity Board (MSEB) and generated revenue of Rs. 45.19 lacs (Rs. 51.93 lacs) during the year.

The Company received the Best Vendor Award for the year 2009-10 from Kansai Nerolac Paints Ltd. for its marketing efficiency.

Contribution to exchequer

The Company has contributed Rs. 5615.23 lacs to the Central and State exchequer by way of Excise Duty, Sales Tax (including Surcharge), Income Tax, Wealth Tax, Professional Tax and Customs Duty.

Opportunities and Future Outlook

The year 2008-2009 witnessed abnormal situation caused by the drastic fluctuations of crude oil price coupled with an economic upheaval globally. Due to the financial mess in US and other European Countries there was recession all over the globe and it affected the asian markets including India very badly. However the year 2009-2010 saw revival in the industry and business operations were normalized. The improved market environment provides an assurance to growth in industrial activities.

The Phthalic Anhydride (PA) industry is growing at the moment with rising demand. The end users of the products like PVC, paints, constructions, phthalate plasticizers are getting expanded and broadbased and are expected to grow at 10-12% cumulatively and the Alkyd resins, Unstaurated Polyester Resins (UPR), Dyes and Pigments, CPC and Speciality Chemicals segments and other related products are expected to grow at over 20%.

The Company after getting converted into a domestic unit during November 2008 is well placed to take advantage of the growth opportunities in the domestic and international arena. The crude oil price is stable and is expected to remain so in the near future. As a result the Companys performance is expected to post a healthy operating scenario. The situation improved from the first quarter of 2009 and the demand has been increasing alongwith the price of the product.

Also the safeguards duty imposed by the Government, of 25% and 15% in two tranches from January to June 2009 and July to December 2009 respectively added to further improvements in product prices. The safeguards duty was upto 31.12.2009 and thereafter there has been a surge in imports and the prices of PA are steadily declining. However due to the increased demand for PA in the user industry, the increase in supply has been absorbed and hence the price of PA is expected to remain stable in the near future.

The Indian economy is expected to grow over 8% in the current year with continued thrust on infrastructure which would result in increased construction and other activities. As a result the related industries would also witness a stable growth prospects. The recessionary trend in the US and other European markets has been a cause of concern for the growth prospects of Indian economy. However analysts are of the view that both US and European Union will stabilize by 2010-2011 which will result in improved market conditions worldwide including India.

Risks and Concerns

Our country has been relatively insulated from the global recession without any significant impact on the growth of the industries in general and the petrochemical industry in particular. There are signs of recovery due to the stable crude oil prices. The PA industry continues to remain under pricing pressures and volatility, demand supply mismatch, government policies, exchange rate risk and other technical and environmental risks. The Board of Directors do a periodic assessment of the risks through a means of properly defined framework resulting in minimization of risks involved.

Risk Management

Exchange rate risk (Raw material procurement and sale of finished goods)

The Company has been converted into a domestic unit w.e.f. 6.11.2008. The Company procures 70% of the raw material requirement locally and the balance is imported. The finished product is sold locally to the extent of 80% out of which majority is sold on monthly contract basis based on the formula i.e. raw material cost plus profit. The balance is sold on spot price. The Company enjoys a dual market advantage and exports to various countries to an extent of 20% of the total produce and gets natural hedge on the material imported.

Mitigation : As a business policy, the Company minimizes the exposure to foreign exchange risk by forward booking of dollars whenever it is necessary.

Interest rate risk

At present the Company has only Rupee term loan of Rs. 18.56 crores and Working Capital limits from Banks (including receivables factoring facilities) to the extent of Rs. 24.66 crores. Since there is no foreign currency loan involved there is no exchange rate risk. As the long term loan is very less the interest out flow is minimum and is serviced from current realisations.

Mitigation : The Company reviews the loan and working capital requirements position on a regular basis and alternative funding arrangements are being negotiated with banks to keep the interest cost at the minimum possible levels.

Product risk

As the Indian economy is growing and has recovered faster than the other global markets the overall demand position and the Companys product in particular is quite good and would continue to grow for some time with better price realization. Also the global markets now recovering the export market is expected to follow suit. However our exposure to the export market is minimal.

Mitigation : The Company takes advantage of the dual market policy and sells the product in those markets i.e. domestic, deemed exports or exports depending on the price realization to the maximum possible extent.

Operational risk

The Company has continuous process plants and are operated at optimal capacity through out the year bearing temporary shut downs for change of catalysts and routine maintenance jobs. The plants are subject to production and operational hazards viz. accidents and/or occurance of fire, storage, electricity, insurance, toxic and corrosive nature of chemicals etc. There was a fire in the PA-II Plant during October 2009 due to which there was stoppage of production for some time.

Mitigation : The Companies Plants and other assets and stocks are adequately insured. The Company has the Fire policy, Loss of Profit Policy etc. As there was a fire in the Plant there was loss of production and damage to the machinery. Hence the Company requires coverage of the

Machinery Breakdown Policy for which enquiries are being done. The plants have adequate supply of electricity from State Grid / DG sets and maintenance of plants is done on day to day basis by trained technical personnel.

Economic and Geo Political risk

The political situation in the Country as regards the | government policies viz. import duty, taxes etc. and the j international situation will have an impact on the overall corporate growth and the PA industry in particular. Any change in Government policies will have its repercussions | on the corporate sectors.

Mitigation : The Company keeps abreast with the domestic and international economic developments and works on the strategies favourable to the Company.

Internal Control System

The Company conducts its business with integrity and in compliance with the laws and regulations that govern the business. The Company has an established framework of internal controls in operation, including suitable monitoring procedures and self-assessment exercises. In addition to external Audit, the financial and operating controls at various locations are reviewed by the Internal Auditors who report their findings to the Audit Committee of the Board. Compliance with laws and regulations is also monitored. Additionally the Directors and Senior management personnel are required to certify on an annual basis the adherence to the Code of Conduct adopted by the Company.

Human Resources Development / Industrial Relations

Your Companys employees have played a key role in contributing to the growth and maintenance of its status as one of the reputed companies in PA industry and emphasis has been laid on capability building and towards enhancing the effectiveness of the personnel. On the industrial front your Company has had a cordial and harmonious relationship with its employees and Unions throughout the year. The total staff strength is 285 as on 31st March 2010.

Corporate Social Responsibility

The Company considers the interests of the society by taking responsibility for the impact of the organizations activities on customers, employees, shareholders, communities and the environment in all aspects of its operations. The Company inherently believes that the Corporate Social Responsibility (CSR) should be an integral focus area for our organization and thus honouring people, planet and profit.

The Company goes beyond the requirements of applicable environmental laws through :

- Optimizing usage of Raw Material and other Chemicals

- Conserving Power and Water

- Adopting preventive measures to reduce waste and air emissions

- Maximizing the recycling of waste

- Ensuring a safe working environment

-Employee education on environmental issues

-Educating suppliers & buyers to become environmentally responsible

Aforestation and Rain Water Management : The manufacturing site at Taloja has good aforestation and green belts.

Safety of people in neighboring villages, plants, etc. : The Company acknowledges its responsibility towards Environment and complies with applicable Environmental legislation and statutory regulatory requirements.

ISO 14001 (2004) : Environment Management System certification acquired by the Company is the recognition of continuous and relentless Environmental initiative.

The Company encourages the employees to contribute to their communities in a manner of their choice.

Cautionary Note

Certain statements made in the Management Discussion and Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

Listing of shares

Your Companys shares are listed on the Bombay Stock Exchange Limited (BSE) under Scrip code No. 500199 and the National Stock Exchange of India Limited (NSE) under the symbol IGPL. The ISIN code is INE 204A01010.

ISO 9001: (2008) and ISO 14001: (2004) Certifications

Your Company continued to be certified under ISO 9001: (2008) for quality management systems and ISO 14001 : (2004) for environment management systems by Beaureu Veritas as per their prescribed standards.

Directors

The Board of Directors has appointed Dr. A K A Rathi as Additional Director of the Company with effect from 28.7.2009. A proposal for his appointment as Non-Executive and Independent Director is being placed for the members for approval at the ensuing Annual General Meeting.

Shri M M Dhanuka and Shri J K Saboo retire by rotation and being eligible offer themselves for re-appointment.

Group

Pursuant to intimation from the Promoter(s) and in accordance with Regulation 3(l)(e) of the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997 regarding identification of persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) are disclosed in this Annual report as separate disclosure.

Directors Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

a. in the preparation of the annual accounts, all the applicable accounting standards have been followed;

b. appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2010 and of the profit of the Company for that year;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956, for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis.

Particulars of employees

Except Shri Nikunj Dhanuka, Managing Director, there is no other employee drawing the requisite remuneration in terms of Section 217(2A) of the Companies Act, 1956. The statement of remuneration of Shri Nikunj Dhanuka is annexed to this report.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

As required under Section 217(1) of the Companies Act, 1956 read with rule 2 of the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 information on conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the annexure forming part of this report.

Corporate Governance

As per Clause 49 of the Listing Agreement, a separate section on Corporate Governance forms part of this Annual Report. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance is given as Annexure B and forms part of this Annual Report.

Auditors and Auditors Report

The Companys Statutory Auditors M/s. Hariharan & Co., Chartered Accountants, Bangalore retire at the conclusion of the forthcoming Annual General Meeting and are eligible for reappointment. Your Directors recommend their appointment for the ensuing year.

The auditors have qualified the financial statement for the year ended 31.03.2010 regarding depreciation on Plant & Machinery w.e.f. 1.4.2006 on the basis of useful life of the assets as determined by an approved valuer as against the rates specified in Schedule XIV of the Companies Act, 1956. The Company continues to provide depreciation on the same basis in order to reflect the proper Value of the Assets.

The same has been dealt with in Note No.5 of Schedule 19.

Acknowledgements

The Directors express their appreciation for the contribution made by the employees at all levels to the significant improvement in the operations of the Company and for the support and co-operation received from all the stakeholders, Banks, various Regulatory and Government authorities and business partners.

For and on bebalf of the Board

Mumbai M M Dhanuka

Date : 20th May, 2010 Chairman

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