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Notes to Accounts of I G Petrochemicals Ltd.

Mar 31, 2015

1. i. The Term Loans are secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu charge basis with ECB lenders. It is further secured by second charge on the Current Assets of the Company. The Term Loans are further secured by personal guarantee of two directors of the company and by others. The Term Loans are payable in 60 equal monthly instalments from commencement of commercial production of new Phthalic Anhydride Plant i.e. 28th September 2013.

ii. The External Commercial Borrowings (ECB) is secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu basis with Term Loan lenders. The ECB is payable in 17 equal semi annual instalments from 15.09.2013.

iii. Hire Purchase finance are secured by the assets acquired through such finance.

2. i. Working Capital facilities are secured by Hypothecation of current assets of the company i.e. stock of raw materials, stock in process, finished goods, stores & spares and book debts on first pari passu basis amongst Working Capital lenders under consortium banking arrangement excluding receivables pertaining to specific customers assigned for Factoring facilities. It is further secured by hypothecation of movable properties and registered mortgage of immovable properties of the Company on second charge basis.

Working Capital facilities are further secured by Personal Guarantee of two Directors of the company and by others.

ii. Factoring facilities are secured by way of exclusive first charge on receivables factored and subservient charge on other Current Assets. Further they are secured by personal guarantee of two directors of the Company.

3. Certain fixed assets of the company were revalued on the basis of the net replacement value determined by an approved valuer during the year ended 30.09.1999. To follow uniform valuation of all assets the company has reinstated the historic cost value of these Fixed Assets. Accordingly the revalued amount of Plant & Equipments and other assets have been reversed on 01.04.2014 resulting in deduction in Gross Block of Rs. 7,139.97 lacs under Plant & Equipments, Rs. 666.95 lacs under Lease Hold Land and Rs. 26.20 lacs under buildings, reduction of depreciation reserve of Rs. 5,466.36 lacs under plant & Equipment, Rs. 105.80 lacs under Lease Hold Land and Rs. 13.33 lacs under buildings thus resulting net reversal to revaluation of reserve of Rs. 2,247.60 lacs.

4. Buildings include Rs. 250/- (Previous year Rs. 250/-) for shares in office premises in a co-operative society. Vehicles include vehicles with Gross book value of Rs. 323.55 lacs (Previous Year Rs. 342.96 lacs ) and Net book value of Rs. 139.35 lacs (Previous year Rs. 172.44 lacs) acquired on Hire Purchase contracts.

5. Effective from April 1, 2014, the company has charged depreciation based on the revised remaining useful life of the assets as per requirement of Schedule II of the Companies Act 2013. Depreciation is now provided on a straight line basis as against the policy of providing on written down value basis for some assets. Had there not been any change in useful life of Fixed Assets, the depreciation charged for the year would have been higher by Rs. 1,035.07 Lacs. Further carrying value of Fixed Assets, where the remaining useful life of the assets was determined to be nil as on April 1,2014 , aggregating to Rs. 116.69 Lacs is adjusted against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus. Depreciation for Previous Year of Rs. 2,189.32 lacs includes Rs. 385.98 lacs charged to Revaluation Reserve.

6. From April 1, 2006 to March 31, 2014 the company had provided the depreciation for the Plant & Equipments installed in Phthalic Anhydride Plant-2 (PA-2) on straight line method based on the balance useful life of the assets as determined by an approved valuer instead of providing at the rates specified in Schedule XIV of the Companies Act 1956. Arrears arisen due to this amounting to Rs. 2,111.10 lacs for the above period is now provided and accounted under extra ordinary item in the statement of Profit & Loss.

7. a) Addition to Fixed Assets includes preoperative and trial run expenses incurred during the year in the form of Employees benefits expenses of Rs. 50.48 lacs (Previous Year Rs. 170.50 lacs), Power Fuel & Water Charges Rs. 193.82 lacs (Previous Year Rs. 1,256.18 lacs) and Other expenses Rs. 73.85 lacs (Previous Year Rs. 442.08 lacs).

b) Capital Work in Progress includes Plant & Equipments under Construction Rs. 77.19 lacs (Previous Year Rs. 64.25 lacs).

8. Pursuant to the amendment to the Companies ( Accounting Standard ) Rules 2006 by notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs, the Company has exercised the option in terms of Para 46A inserted in the Standard for long term foreign currency monetary assets and liabilities. Consequently the Gain of foreign exchange of Rs. 1,427.26 lacs for the year and loss of foreign exchange Rs. 31.67 lacs as on 31.03.2015 has been capitalised.

9. TAX EXPENSES

The Company has carried forward losses and unabsorbed depreciation as per the Income Tax Act 1961. The deferred tax assets have not been recognized considering the principle of virtual certainty as stated in the Accounting Standard AS-22 - Accounting for Taxes on Income.

In view of availability of Carried Forward benefits as referred above, the Company has provided for the liability for the Current Year under Section 115 JB (MAT) of the Income Tax Act 1961.

10. CONTINGENT LIABILITIES March March 31, 2015 31, 2014 Rs. in Lacs Rs. in Lacs



Contingent Liabilities not provided for

a. Bills of Exchange Discounted - With Banks 1,617.54 4,694.36

b. Disputed Excise & Service tax matters *

i) Cases decided in favour of the Company which are taken further in appeal before the appellate authorities by the department. 9,274.71 10,564.25



ii) Other Matters for which the Company is in appeal. 1,845.96 1,969.97 (Deposits paid under protest Rs. 854.68 Lacs (Previous Year Rs. 854.68 Lacs)

iii) Show Cause Notices received 778.10 12,176.42

The Management is confident that the matters will be in favour of the company as per legal opinion obtained / legal precedents.

c) Claim against the Company not acknowledged as Debt in respect of 29.63 29.63 Electricity Duty on internal power generation.



d) Claim against the Company not acknowledged as Debt in other matters. 489.00 489.00 (Deposits paid under protest Rs. 489.00 Lacs (Previous Year Rs. 489 Lacs)

e) The Income tax assessments of the Company have been completed upto the assessment year 2012-2013 and while completing the assessments for 490.06 1,408.69 certain years the Income tax Department had disallowed certain claims of the company which had resulted in reduction of Carried Forward benefits available to the company as per the Income Tax Act 1961 and the additional tax liability that may arise amounts to:

These matters are in appeal before the Appellate authorities. Based on the interpretation of the relevant provisions of the Income Tax Act, the Company has been legally advised by an eminent Counsel that the matters will be in favour of the Company.

Future cash outflows in respect of item b, c and e above are determinable only on receipt of judgments / decisions pending at various forums/ authorities.

f) Workmen''s Union. Demand of the Company at Taloja w.e.f 1st June, 2015 is under negotiations amount presently not ascertainable.

*Against certain demands on these matters, the Company / Department had filed appeal during the earlier years in the case of certain Excise / Custom demands amounting to Rs. 6,383.34 Lacs (Previous Year Rs. 7,672.89 Lacs) before the Honourable Supreme Court which are disputed by the Company and the matter is subjudice. Based on decisions of the Supreme Court and other interpretation of the relevant provisions, the Company has been legally advised by an eminent Counsel that matter will be in favour of the Company.

NOTE - 11 : SEGMENT INFORMATION

Primary Business Segment

The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.

Geographical Segments

Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.

NOTE - 12: RELATED PARTY DISCLOSURE

As required by Accounting Standard (AS)-18

i. Names of related parties where control exists irrespective of whether transactions have occurred or not

Individuals owning, directly or indirectly, an interest in - the voting power that gives them control or significant influence

ii. Names of other related parties with whom transactions have taken place during the year

a. Key Management Mr. Nikunj Dhanuka - Personnel Managing Director

Mr. R Chandrasekaran - Chief Financial Officer & Secretary

b. Relatives of key Mr. Umang Dhanuka - management personnel Brother of Managing Director.

Mrs. Raj Kumari Dhanuka - Mother of Managing Director.

Mrs. Bina Devi Dhanuka - Uncle''s Wife of Managing Director.

Mr. Mayank Dhanuka - Uncle''s Son of Managing Director.

c. Associates -

d. Enterprises owned or Mysore Petro Chemicals Limited significantly influenced by key management personnel or their relatives

NOTE - 13 : EMPLOYEE BENEFITS

i. General Description of defined benefit plan Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

NOTE - 14 : EXCEPTIONAL ITEM

a. In the previous year due to significant movement and volatility in value of Indian rupee against US dollar the net foreign exchange loss had been considered by the Company as exceptional in nature.

b. Foreign currency liability of Rs. 3414.04 Lacs (Previous Year Rs. 3516.89 Lacs) shown under Creditors (current liabilities) has been disputed, a counter claim has been made and is not likely to be settled in near future, however this liability has been converted by applying exchange rate at the close of the year as per Accounting Standard issued by ICAI.

NOTE - 15 : RESEARCH & DEVELOPMENT

Research & Development Expenditure of Rs. 39.82 Lacs (Previous Year Rs. 33.01 Lacs) have been accounted for in the respective heads of the Statement of Profit and Loss.

NOTE - 16 : CORPORATE SOCIAL RESPONSIBILITY

The Company has incurred Rs. 29.13 Lacs (Previous Year Rs. 23.62) on Corporate Social Responsibility which have been accounted for in the respective heads of the Statement of Profit and Loss.

NOTE - 17 : PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2014

NOTE - 1 : TAX EXPENSES

The Company has carried forward losses and unabsorbed depreciation as per the Income Tax Act 1961. The deferred tax assets have not been recognized considering the principle of virtual certainty as stated in the Accounting Standard AS-22 – Accounting for Taxes on Income.

In view of availability of Carried Forward benefits as referred above, the Company has provided for the liability for the Current Year under Section 115 JB (MAT) of the Income Tax Act 1961.

As at As at March 31, 2014 March 31, 2013 Rs. in Lacs Rs. in Lacs

NOTE - 2: CONTINGENT LIABILITIES Contingent Liabilities not provided for

a. Bills of Exchange Discounted - with Banks 4,694.36 374.45

b. Disputed Excise & Service tax matters

i) Cases decided in favour of the Company which are taken further in 10 564 25 10,564.25 appeal before the appellate authorities by the department.

i) Other Matters for which the Company is in appeal. (Deposits paid under I 1,969.97 1,969.97 protest Rs. 854.68 Lacs (Previous Year Rs. 818.61 Lacs)

iii) Show Cause Notices received 12,176.42 12,030.53

The Management is confident that the matters will be in favour of the company as per legal opinion obtained / legal precedents.

29.63 29.63

c) Claim against the Company not acknowledged as Debt in respect of Electricity Duty on internal power generation.

d) Claim against the Company not acknowledged as Debt in other matters. 489.00 -- (Deposits paid under protest Rs. 489.00 Lacs (Previous Year Rs. Nil)

e) Custom Duty on Raw Material under Advance Licence pending -- 273.14 Export Obligation. (Includes Cenvat Credit available Rs. Nil (Previous Year Rs. 208.42 Lacs).

f) The Income tax assessments of the Company have been completed upto 1,408.69 2,127.91 the assessment year 2011-2012 and while completing the assessments for certain years the Income tax Department had disallowed certain claims of the company which had resulted in reduction of Carried Forward benefits available to the company as per the Income Tax Act 1961 and the additional tax liability that may arise amounts to:

These matters are in appeal before the Appellate authorities. Based on the interpretation of the relevant provisions of the Income Tax Act, the Company has been legally advised by an eminent Counsel that the matters will be in favour of the Company.

Future cash outflows in respect of item b, c and e above are determinable only on receipt of judgments / decisions pending at various forums/authorities.

* Against certain demands on these matters, the Company / Department had filed appeal during the earlier years in the case of certain Excise / Custom demands amounting to Rs. 7,672.89 Lacs (Previous Year Rs. 7,672.89 Lacs) before the Honourable Supreme Court which are disputed by the Company and the matter is subjudice. Based on decisions of the Supreme Court and other interpretation of the relevant provisions, the Company has been legally advised by an eminent Counsel that matter will be in favour of the Company.

NOTE - 3 : SEGMENT INFORMATION Primary Business Segment

The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.

Geographical Segments

Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.

NOTE - 4 : RELATED PARTY DISCLOSURE

Individuals owning, directly or indirectly, an interest in the voting power that gives them control or significant influence —

ii. Names of other related parties with whom transactions have taken place during the year

a. Key Management Personnel

Shri. Nikunj Dhanuka - Managing Director Shri. J.K.Saboo - Executive Director

b. Relatives of key management personnel

Shri. Umang Dhanuka – Brother of Managing Director. Mrs. Raj Kumari Dhanuka – Mother of Managing Director. Mrs. Santosh Saboo – Wife of Executive Director.

c. Associates —

d. Enterprises owned or significantly influenced by key management personnel or their relatives

Mysore Petro Chemicals Limited

NOTE - 5 : EMPLOYEE BENEFITS

i. General Description of defined benefit plan Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

NOTE - 6 : EXCEPTIONAL ITEM

a. Due to significant movement and volatility in value of Indian rupee against US dollar the net foreign exchange loss has been considered by the Company as exceptional in nature.

b. Foreign currency Liability of Rs. 3,516.89 Lacs shown under sundry Creditors ( current Liabilities) has been disputed, a counter claim has been made and is not likely to be settled in a near future, hence this liability has not been converted by applying exchange rate at the close of the year as the liability may not reflect with reasonable accuracy the amount that is likely to be settled due to significant movement and volatility in value of Indian Rupee against Euro. Had the liability been converted as on the rates prevailing as at the close of the year (31st March, 2014 ) as recommended in the Accounting Standard issued by ICAI, the amount shown under exceptional item would have been higher by Rs. 659.07 Lacs and Trade Payable as appearing in "Current liabilities" would have been higher by the similar amount.

NOTE - 7: RESEARCH & DEVELOPMENT

Research & Development Expenditure of Rs. 33.01 Lacs (Previous Year Rs. 30.51 Lacs) have been accounted for in the respective heads of the Statement of Profit and Loss.

NOTE - 8 : PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2013

NOTE - 1 : TAX EXPENSES

The Company has carried forward losses and unabsorbed depreciation as per the Income Tax Act 1961. The deferred tax assets have not been recognized considering the principle of virtual certainty as stated in the Accounting Standard AS-22 - Accounting for Taxes on Income.

In view of availability of Carried Forward benefits as referred above, the Company has provided for the liability for the Current Year under Section 115 JB (MAT) of the Income Tax Act 1961.

NOTE -2: CONTINGENT LIABILITIES Contingent Liabilities not provided for

a. Bills of Exchange Discounted

- with Banks 374.45 551.16

- with Others — 1,306.51

b. i) Cases decided in favour of the Company which are taken further in 10,564.25 10,564.25 appeal before the appellate authorities by the department.

ii) Other Matters for which the Company is in appeal. (Deposits paid under 1,969.97 2,004.10 protest Rs. 670.60 Lacs (Previous Year Rs. 665.35 Lacs)

NOTE - 3 : SEGMENT INFORMATION

Primary Business Segment

The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.

Geographical Segments

Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.

NOTE - 4 : EMPLOYEE BENEFITS i. General Description of defined benefit plan Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.

NOTE - 5 :RESEARCH & DEVELOPMENT

Research & Development Expenditure of Rs. 30.51 Lacs (Previous Year Rs. 21.74 Lacs) have been accounted for in the respective heads of the Statement of Profit and Loss.

NOTE - 6 : PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

I. The Rupeee Term Loans are secured by Hypothecation of movable properties (other than current assets) and equitable mortgage on immovable properties of the Company on first pari passu charge basis with ECB lender. It is further secured by second charge on the Current Assets of the Company. The Rupeee Term Loans are further secured by personal guarantee of two directors of the company.

ii. The External Commercial Borrowings (ECB) is secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu charge basis with Rupee Term Loan lenders.

iii. Hire Purchase finance are secured by the assets acquired through such finance.

i. Working Capital facilities are secured by Hypothecation of current assets of the company i.e. stock of raw materials, stock in process, finished goods and book, debts. It is further secured by hypothecation of movable properties and equitable mortgage of immovable properties of the Company on second and subservient charge basis.

Working Capital facilities are further secured by Personal Guarantee of two Directors of the Company.

ii. Factoring facility is secured by respective book debts & personal guarantee of two directors of the Company.

Note :

1. Land, Buildings at factory site and Plant & Equipment as on 3D.09.99 were revalued on the basis of net replacement value determined by an approved valuer resulting in an increase in value of Land by Rs 666.95 lacs, Buildings by Rs 35.53 lacs and Plant & Equipment by Rs 7,330.20 lacs which was credited to Revaluation Reserve .

2. Buildings include Rs 250/- (Previous year Rs 250/-) for shares in office premises in a co-operative society. Vehicles include vehicles with Gross book value of Rs 223.03 lacs (Previous Year Rs 257.54 lacs ) and Net book value of Rs 136.09 iacs (Previous year Rs 158.52 lacs) acquired on Hire Purchase contracts.

3. Depreciation on Plant & Equipment w.e.f. 01-04-2006 is provided on straight line method based on the balance useful iife of the assets as determined by an approved valuer which is higher as compared to Schedule XIV of the Companies Act, 1956. Had the depreciation been provided on straight line method based on rates specified in Schedule XIV of the Companies Act 1956 the depreciation charged for the year would have been higher by Rs 859.53 Lacs (Previous Year Rs 859.28 Lacs) and accumulated depreciation would have been higher by Rs 5213.19 Lacs (Previous Year Rs 4,353.66 Lacs).

4. Capital work in progress includes Plant & Equipment under construction Rs 2,129.87 lacs (Previous YearRs 1,909.86 lacs), Building under Construction X 465.36 lacs (Previous Year Rs 366.40 Lacs), Employees benefits expenses of Rs 194.25 lacs (Previous year Rs 174.70 lacs) and Other expenses X 299.71 lacs (Previous Year Rs 320.98 lacs), Interest & Finance charges Rs 651.22 lacs (Previous Year Nil), less capitalized during the year Rs 1,893.33 lacs (Previous year Rs 920.80 lacs)

NOTE - 1 : TAX EXPENSES

The Company has carried forward losses and unabsorbed depreciation as per the income Tax Act 1961. The deferred tax assets have not been recognized considering the principle of virtual certainty as stated in the Accounting Standard AS-22 - Accounting for Taxes on Income.

In view of availability of Carried Forward benefits as referred above, the Company has provided for the liability for the Current Year under Section 115 JB (MAT) of the Income Tax Act 1961 [Further refer Note No. 13(e)],

NOTE - 2: CONTINGENT LIABILITIES

Contingent Liabilities not provided for

a. Bills of Exchange Discounted

- with Banks 551.16 1,110.36

- with Others 1,306.51 2,084.12 b. i) Cases decided in favour of the Company which are taken further in 10,564.25 10,564.25

appeal before the appellate authorities by the department.*

ii) Other Matters for which the Company is in appeal. 2,004.10 2,138.72

(Deposits paid under protest Rs 665.35 Lacs (Previous Year Rs 665.35 Lacs)

iii) Show Cause Notices received 14509.57 13424.15

The Management is confident that the matters will be in favour of the company as per legal opinion obtained /' legal precedents. 1

c) Claim against the Company not acknowledged as Debt in respect of 29.63 109.47

Electricity Duty on internal power generation.

d) Custom Duty on Raw Material under Advance Licence pending Export 1,785.65 1,320.59 Obligation. (Includes Cenvat Credit available Rs 1.362.55 Lacs (Previous Year Rs 975.45 Lacs).

e) The Income tax assessments of the Company have been completed up to 1,597.89 1108.47 the assessment year 2009-2010 and while completing the assessments for certain years the Income tax Department had disallowed certain claims of the company which had resulted in reduction of Carried Forward benefits available to the company as per the income .Tax Act 1961 and the additional tax liability that may arise amounts to:

These matters are in appeal before the Appellate authorities. Based on the interpretation of the relevant provisions of the Income Tax Act, the Company has been legally advised by an eminent Counsel that the matters will be in favour of the Company.

Future cash outflows in respect of item b, c and e above are determinable only on receipt of judgments / decisions pending at various, forums/authorities.

* Against certain demands on these matters, the Company / Department had filed appeal during the earlier years in the case of certain Excise / Custom demands amounting to Rs 7,672.89 Lacs (Previous Year Rs 7,672.89 Lacs) before the Honourable Supreme Court which are disputed by the Company and the matter is subjudice. Based on decisions of the Supreme Court and other interpretation of the relevant provisions, the Company has been legally advised by an eminent Counsel that matter will be in favour of the Company.

f) Workmen's Union Demand of the Company at Taloja with effect from 1st June 2011 is under negotiation, amount presently not ascertainable.

NOTE - 3: SEGMENT INFORMATION Primary Business Segment

The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.

Geographical Segments

Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.

NOTE - 4:

The Company had obtained a real opinion from an eminent legal counsel / also on the basis of judgment by Additional District Judge, Panaji stating /' held that privately placed debentures cannot be construed to be ''Debentures" for the purpose of Clause (g) of Sub Section (1) of Section 274 of the Companies Act. 1956.

Note: Amount in bracket represents figures for previous year.

* As per contract with Mysore Petro Chemicals Limited, certain exchange transactions of services / goods mutually beneficial have been entered into which have not been quantified above.

NOTE - 5 : EMPLOYEE BENEFITS

i. General Description of defined benefit plan Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy,

The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet.

iv. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006

There are no outstanding to parties covered under the Micro, Smail and Medium Enterprises as per MSMED Act, 2006. This information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

NOTE - 6:RESEARCH & DEVELOPMENT .

Research & Development Expenditure of Rs 24.64 lacs (Previous Year Rs 21.74 lacs) have been accounted for in the respective heads of the Statement of Profit & Loss.

NOTE - 7 PREVIOUS YEAR COMPARISON

The Revised Schedule VI has become effective from April 1,2012 for the preparation of financial statements. This has significantly changed the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2010

1. Nature of Operations

IG Petrochemicals Limited (the Company) is engaged in the manufacture of Phthalic Anhydride having its manufacturing unit at Taloja (Maharashtra).

2. The Company had obtained a legal opinion from an eminent legal counsel / also on the basis of judgment by Additional District Judge, Panaji stating / held that privately placed debentures cannot be construed to be "Debentures" for the purpose of Clause (g) of Sub Section (1) of Section 274 of the Companies Act. 1956.

3. Fixed Deposits of Rs.639.84 Lacs (Previous Year Rs.1789.84 Lacs) have been lodged with Banks and Rs.0.25 Lacs (Previous Year Rs.0.25 Lacs) with Government Departments as a security.

4. Depreciation:

Depreciation on Plant & Machinery for the year is provided on straight line method based on the balance useful life of the assets as determined by an approved valuer which is higher as compared to Schedule XrV of the Companies Act, 1956. Had the depreciation been provided on straightline method based on rates specified in Schedule XIV of the Companies Act 1956 the depreciation charged for the year would have been higher by Rs.866.22 Lacs (Previous Year Rs. 869.35 Lacs) and accumulated depreciation would have been higher by Rs.3494.38 Lacs (Previous Year Rs.2628.16 Lacs).

5. Loans and Advances includes a sum of Rs.903.00 Lacs towards claims preferred on account of Loss of Profit Claim of Rs.150.00 Lacs and fire claim of Rs.753.00 Lacs with the Insurance Company on the basis of loss / expenses incurred by the Company which are pending settlement with the Insurance Company. The Management is of the view that this is fully recoverable & considered good.

6. (i) The Company has carried forward losses and unabsorbed depreciation as per the Income Tax Act 1961. The deferred tax assets have not been recognized considering the principle of virtual certainty as stated in the Accounting Standard AS-22 - Accounting for Taxes on Income.

(ii) In view of availability of Carried Forward benefits as referred above, the Company has provided for the liability for the Current Year under Section 115 JB (MAT) of the Income Tax Act 1961 ( Further refer Note No. 13(e).

7. Segment Information

Primary Business Segment

The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.

8. Provisions and Contingencies

Contingent Liabilities not provided for

(Rs. in Lacs)

March 31,2010 March 31, 2009.

a. Bills or Exchange Discounted with Banks 130.41 1,409.56

with Others 2,195.06 646.56

b. Excise Matters

i) Cases decided in favour of the Company which are taken further in appeal 5,543.98 4.878.63

before the appellate authorities by the department.

ii) Other Matters for which the Company is in appeal. 2,011.66 8,074.16

(Deposits paid under protest Rs.665.35 Lacs (Previous Year Rs.665.35 Lacs) iii) Show Cause Notices received 12,640.26 11,121.46

* Against certain demands on these matters, the Company / Department had filed appeal during the earlier years in the case of certain Excise/ Custom demands amounting to Rs. 1128.02 Lacs before the Honourable Supreme Court (Previous Year Rs.7048.69 Lacs before the Honourable Supreme Court / Honourable High Court of Mumbai) which are disputed by the Company and the matter is subjudice. Based on decisions of the Supreme Court and other interpretation of the relevant provisions, the Company has been legally advised by an eminent Counsel that matter will be in favour of the Company.

9. Research & Development Expenditure of Rs.23.25 Lacs (Previous Year Lacs) have been accounted for in the respective heads of the Profit and Loss Account.

10. Previous Year Comparatives

Previous years figures have been regrouped wherever necessary to conform to this years classification.

 
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