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Notes to Accounts of I G Petrochemicals Ltd.

Mar 31, 2022

1. Buildings include ? 250/- (Previous year ? 250/-) for shares issued in favour of the Company having office premises in a co-operative society.

2. Capital work in Progress & Addition to fixed Assets includes Property,Plant & Equipment under construction ? 1,690.88 lakhs (Previous year - ? 3,709.36 lakhs), Machinery Spares Stock ? 0.90 lakhs (Previous year -? 194.48 lakhs) and preoperative expenses and trial run expenses incurred during the year in the form of Employee Benefits expense of? 157.35 lakhs (Previous year ? 396.71 lakhs), Rates & Taxes - ? Nil (Previous year ?4.76 lakhs), Interest & Finance Expenses ? 18.98 lakhs (Previous Year - ? 724.93 lakhs), Insurance Premium ? 29.14 lakhs (Previous Year - ? 44.48 lakhs), Power, Fuel & Water Charges ? 19.66 lakhs(Previous year ? 436.02 lakhs), Raw material consumed ? 98.41 lakhs (Previous year 2,807.71 lakhs), Closing stock (? 112.41) lakhs (Previous year Nil), Stores and packing material consumed ? 5.87 lakhs(Previous year ? 41.75 lakhs), Repair & Maintenance ? Nil (Previous year ? 33.31 lakhs), Selling expenses ? Nil (Previous year ? 124.72 lakhs), Depreciation ? Nil (Previous year ? 47.71 lakhs) and Miscellaneous Expenses ? 273.15 lakhs (Previous Year - ? 31.63 lakhs) Less Sale of Finished Goods ? Nil (Previous year ? 5,066.00 lakhs) and Other operating income ? Nil (Previous year ? 5.62 lakhs).

3. Goodwill

The Company tests goodwill annually for impairment

Goodwill was recognised from business combination during the year ended 31^st March, 2018 and represents difference of purchase consideration paid & allocation to Identified Assets & Liabilities as per Valuerâs Report on acquiring manufacturing unit of Maleic Anhydride. The estimated value-in-use of the Unit is based on the future cash flows using at 2% annual growth rate for periods subsequent to the forecast period of 5 years and discount rate of 17%. An analysis of the sensitivity of the computation to a change in key parameters (operating margin, discount rates and long term average growth rate), based on reasonable assumptions, did not identify any probable scenario in which the recoverable amount of the Unit would decrease below its carrying amount.

4. Pursuant to the amendment to the Companies (Accounting Standards), Rules, 2006 by notification dated 29^th December 2011 issued by the Ministry of Corporate Affairs and exemption allowed vide D133AA of Ind AS-101 first time adoption of Ind AS, the Company continues to exercise the option in terms of Para 46A inserted in the Standard for long term foreign currency monetary assets and liabilities. Consequently the loss of foreign exchange of? 11.39 lakhs for the year and loss of foreign exchange ? 1,180.15 lakhs as on 31^st March, 2022 has been capitalised.

i. The Company has availed two External Commercial Borrowings (ECB) which are repayable in 17 equal semi-annual instalments commencing from 29^th November, 2019 and 15^th September, 2013. The ECB is secured by the first pari-pasu charge on the fixed movable assets (other than current assets) and registered mortgage on immovable properties of the Company by way of first pari-passu charge. The ECB whose repayment commenced on 15^th September, 2013 has since been repaid in full on 15^th September, 2021.

ii. Term Loan from Export Import Bank of India is secured by hypothecation of the Current assets, movable plant machinery and equipment, etc. of the Company and Personal Guarantee of two Directors of the Company,the loan is repayable in 20 equal quarterly instalments commencing from 1^st October, 2024.

i. Bank borrowings are secured by first pari passu charge on the whole of the current assets of the Company and second pari passu charge on the movable properties of the Company amongst Working Capital lenders under consortium banking arrangement. The loan is also secured by mortgage of immovable properties of the Company by way of second charge and Personal Guarantee of two Directors of the Company.

ii. Bill discounting Facility is secured by respective book debts & personal Guarantee of two Directors of the Company.

31 \| CONTINGENT LIABILITIES
Contingent Liabilities not provided for a. 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. (Deposit under Protest '' NIL, (Previous year '' NIL).	750.87	750.87
ii) Other Matters for which the Company is in appeal. (Deposits paid under protest '' 665.35 lakhs (Previous year '' 735.53 lakhs)	665.35	735.53
iii) Show Cause Notices received (Deposits paid under protest '' 15.55 lakhs (Previous year ''15.55 lakhs)	333.71	333.71
b. Claim against the Company not acknowledged as Debt.	197.08	189.29
c. I ncome Tax matters under dispute for various years due to additions/ disallowances. (Deposit under protest '' 707.94 lakhs) (Previous year '' 707.94 lakhs)	5,910.56	5,984.23
d. Electricity Duty Disputed, writ petition has been filed before the Mumbai High Court through Captive Power Producers Association and stay has been granted.	2,355.51	1,949.58

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

Future cash outflows in respect of above items are determinable only on receipt of judgments / decisions pending at various forums/authorities.

e. The Board at its meeting held on 20^th May, 2022 considered and recommended a dividend @100 % i.e. '' 10/-per share of '' 10/- each for the financial year 2021-22 amounting to '' 3,079.49 lakhs. (Previous Year @75% i.e. '' 7.50/- per share taken as deduction under Reserves & Surplus) subject to approval of the members of the Company.

32 | 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.

Notes:

a) The related party relationships have been determined on the basis of the requirements of the Indian Accounting Standard (Ind AS -24) âRelated party disclosuresâ and the same have been relied upon by auditors.

b) The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year.

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

The details of significant accounting policies, including the criterial for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note-I of significant accounting policies to the financial statements.

(b) The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to level 3, as described below:

Level-1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level-2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level-3: Techniques which use inputs that have a significant effect on the recorded Fair Value that are not based on observable market data.

The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and loans and borrowings.

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowings.

Interest rate risk

The Companyâs does not have any significant interest bearning asset however there are certain unsignificant interest bearing liability. As such, the Company is not exposed to significant interest rate risk as at the reporting date.

Foreign currency risk

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company maintains sufficient cash and cash equivalents to manage its liquidity risk.

Credit Risk

Credit risk is the risk that counterparty will default on its contractual obligations resulting in a financial loss to the Company. To manage this, the Company periodically assess the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and agreeing of accounts receivable. Individual risk limit are set accordingly.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivatives, cash and cash equivalents, bank deposits and other financial assets.

During the year ended 31^st March, 2018 the Company had acquired the manufacturing unit of M/s Mysore Petro Chemicals Limited with effect from 1^st April, 2017 for a consideration of '' 7,448.00 lakhs on slump sale basis, as per the valuation by Haribhakti & Co. LLP. The transaction was accounted under Ind AS 103 "Business Combinationâ as a business combination with the purchases price being allocated to identifiable assets and liabilities at fair value as determined by an approved valuer.

Goodwill arose in the acquisition of above business because the cost of combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and assembled workforce of acquired business combination. These benefits are not recognised separately from goodwill as they do not meet the recognised criteria for identifiable intangible assets.

39 | RESEARCH & DEVELOPMENT

Research & Development Expenditure of '' 75.65 lakhs (Previous Year '' 69.96 lakhs) has been accounted for in the respective heads of the Statement of Profit and Loss.

40 | The outbreak of corona virus (Covid-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The management has made an assessment of the impact of Covid-19 on the Companyâs operations, financial performance and position as at 31^st March, 2022 and has concluded that there is no material impact which is required to be recognised in the Standalone financial statements. Accordingly, no adjustment have been made to the financial results. However the Company continues to monitor the situation and take appropriate action, as considered necessary.

42 There was no impairment loss on non- financial assets on the basis of review carried out by the management in accordance with the Indian Accounting Standard ( Ind AS-36 ) "Impairment of Assetsâ

43 The Company had elected to exercise the option permitted under Section 115 BAA of the Income Tax Act, 1961. Accordingly the Company has recognised Provision for Income Tax from Financial Year 2020-21.

44 | The Code on Social Security 2020 (''the Codeâ) relating to employee benefits, during the employment and postemployment, has received Presidential assent on 28^th September, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on 13^thNovember, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.

The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact.

Mar 31, 2018

Bank borrowings 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. It is further secured by hypothecation of Fixed and movable properties and registered mortgage of immovable properties of the Company on second charge basis.

The above Bank borrowings are further secured by Personal Guarantee of two Directors of the company.

Dues to parties covered under the Micro, Small and Medium Enterprises as per MSMED Act, 2006 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 Auditor.

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

f. Income Tax Matters

The Income Tax Assessments have been completed upto Assessment year 2015-16. While completing the Income tax Assessments, the Income Tax department had disallowed certain claims of the Company which resulted in reduction of carried forward benefits available to the Company as per the Income Tax Act, 1961. Due to this the additional liability remains to be provided as on date amounts to Rs. 2,302.20 Lakhs (Previous Year Rs. 5,209 Lakhs). These matters are under Appeal before the Honâble Karnataka High Court and with other Appellate Authorities, based on the favourable decisions in similar cases / legal opinions taken by the Company / discussions with solicitors etc. the management is confident that matters will be in favour of the company, hence no provision has been made in the accounts.

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

g. The Board at its meeting held on 28^th May, 2018 considered and recommended a dividend @ 40% i.e. Rs. 4/- per share of Rs. 10/ each for the financial year 2017-18 (Previous Year @ 30% i.e. Rs. 3/- per Share taken as deduction under Reserves & Surplus ) subject to approval of the members of the company.

h. Workmenâs Union Demand of the Company at Taloja with effect from June 1, 2017 is under negotiation, amount presently not ascertainable.

H 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 customer. 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.

1 employee benefits

i. General Description of defined benefit plan

The Gratuity scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarises 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.

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

2 EXPLANATION ON TRANSITION TO IND AS

(i) Ind AS 101 â First time adoption of Indian accounting standardsâ permits companies adopting Ind AS for the first time to take certain exemptions from the full retrospective application of Ind AS in the transition period. The company, on transition to Ind AS , has availed the following key exemptions:-

(a) Property, Plant and equipment :

The Company has elected to take the carrying value of its property, Plant & Equipment and intangible assets as per previous GAAP ( IGAAP) as its deemed cost for Ind AS as at 1^st April, 2016.

(b) Investment in Subsidiary and associates

The Company has elected to take the carrying amount of the investments in subsidiary as at 1^st April, 2016.

The Company has designated its investment in equity instruments, other than investment in subsidiary and associate, as at Fair Value through Profit & Loss, based on facts and circumstances existed on the date of transition.

(ii) Exception applicable to company

(a) De-recognition of financial assets and liabilities

The Company has elected to apply the de-recognition provisions of Ind AS 109 ( Financial Instruments ) prospectively from the date of transition to Ind AS.

(b) Classification and measurement of financial assets

The Company has classified the financial assets in accordance with the Ind AS 109 ( Financial Instruments ) on the basis of facts and circumstances that existed as at the date of transition to Ind AS.

Notes :

1 The Company has designated its investments, which are held for trading , at Fair value through Profit & loss Account (FVPL), impact of such fair value changes as on the date of Transition is recognised in the opening reserves and changes thereafter are recognised in Statement of Profit & Loss.

2 Proposed dividend declared by the Company is accounted for once approved in the Annual General Meeting, as opposed to the earlier practice of accounting for the same after being proposed by the Board under IGAAP.

3 The Company has recognised all actuarial gains and losses on post retirement defined benefit schemes in other Comprehensive Income. Deferred taxes pertaining to these losses has also been recognized in other Comprehensive Income.

4 Other adjustment primarily includes re-measurement of retention at fair value.

5 Other Comprehensive Income includes re-measurement gains / losses on actuarial valuation of post-employment defined benefits.

3 FINANCIAL INSTRUMENTS

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

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 21(4)(VIII) to the financial statements.

(a) Financial assets and liabilities:

The following table presents carrying amount and fair value of each category of financial assets and liabilities.

(b) The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to level 3, as described below :

Level-1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level-2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level-3 : Techniques which use inputs that have a significant effect on the recorded Fair Value that are not based on observable market data.

(c) Financial Risk Management policies and objectives:

The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Board.

Interest rate risk

The Companyâs exposure to interest rate risk is minimal as the Company does not have any significant interest earning asset or interest bearing liability. As such, the Company is not exposed to significant interest rate risk as at the reporting date.

Foreign currency risk

Liquidity Risk

credit Risk

Financial assets are provided for when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for provision as per provisioning policy of the Company. Where loans or receivables have been provided, the Company continues to engage in enforcement activity to attaempt to recover the receivable due. Where recoveries are made, these are recognized in the statement of profit and loss.

A upfront processing fees on loan

The Company has amortized upfront processing fees over the term loan.

B Investments

Investments in financial assets are carried at amortized cost in Ind AS compared to being carried at cost under IGAAP.

C Other financial liabilities

Security deposits are carried at amortized cost in Ind AS compared to being carried at cost under IGAAP.

D other equity

a) Adjustments to the retained earnings have been made in accordance with Ind AS for the above mentioned items.

b) In addition, in accordance with Ind AS 19 âEmployee Benefitsâ, acturial gains and losses are recognised in other comprehensive income as compared to being recognised in Statement of Profit and Loss under IGAAP.

c) Adjustment reflected dividend (including corporate dividend tax), declared and approved post reporting period.

E Employee benefit expenses

In accordance with Ind AS 19, âEmployee Benefitsâ acturial gains and losses are recognised in other comprehensive income and not reclassified to profit and loss in subsequent period.

F Deferred tax

Ind AS 12, âIncome taxesâ, requires entities to account for deferred taxes using the balance sheet approach, which focusses on temporary differences between the carrying amount of an liability in the balance sheet and its tax base.

In the previous year, in view of the revised profitability projections, the MAT credit which were written down in the respective earlier years amounting to Rs. 3,957.22 lakhs had been recognized by the Company during the last year, on a reassessment by the management at the year end based on convincing evidence that the Company would pay normal income tax during the specified period and would therefore be able to utilize the MAT credit so recognized (which is in accordance with the recommendations contained in the Guidance Note issued by ICAI), the said asset was created by way of Credit to the statement of Profit and Loss account and shown as MAT credit entitlement. Deferred Tax Liability of Rs. 3,864.22 Lakhs provided during the previous year includes the deferred tax liability recalculated and provided on prudential basis on account of reduction of unabsorbed benefits of earlier years.

4 BUSINESS COMBINATION

During the year ended 31^st March, 2018 the Company has acquired the manufacturing unit of M/s Mysore Petro Chemicals Limited with effect from 1^st April, 2017 for a consideration of Rs. 7,448.00 lakhs on slump sale basis, as per the valuation by Haribhakti & Co. LLP. The transaction was accounted under Ind AS 103 â Business Combination â as a business combination with the purchases price being allocated to identifiable assets and liabilities at fair value as determined by an approved valuer.

5 disputed foreign currency liability

Foreign currency liability of Rs.4,077.11 lakhs (31^st March, 2017 Rs.3,501.89 lakhs, 1^st April, 2016 Rs.3,792.62 lakhs) shown under Trade Payables (Current liabilities) has been disputed. A counter claim has been made, however this liability has been converted by applying exchange rate at the close of the year as per Accounting Standard.

6 research & development

Research & Development Expenditure of Rs. 48.07 lakhs (Previous Year Rs. 49.86 lakhs) have been accounted for in the respective heads of the Statement of Profit and Loss.

7 Revenue from operations for Current year includes excise duty which is discontinued effective 1^st July, 2017 upon H implementation of Goods and Service Tax (GST), In accordance with Ind AS18 GST is not included in Revenue from I operations. In view of this Revenue from operations for the year are not comparable with the previous year.

8 corporate social responsibility

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceeding three financial years on Corporate Social Responsibility (CSR) activities.

(a) Gross amount required to be spent by the Company during the year is Rs. 146.42 lakhs, and

(b) Amount spent during the year :

9 previous year comparatives

Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current yearâs classification / disclosure. Previous years accounts has been audited by M/s ASA & Associates LLP (one of the Joint auditors) , and M/s Hariharan & Co. (Predecessor joint auditors)

Mar 31, 2017

1. Non-Current Liabilities

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.

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^thSeptember, 2013.

iii Car loans are secured by the assets acquired through such finance.

2. Tax Expenses

In view of the revised profitability projections, the MAT credit which were hitherto written down in the respective earlier years amounting to Rs.3957.22 lakhs has been recognised by the Company during the year , on a reassessment by the management at the year end ,based on convincing evidence that the Company would pay normal Income tax during the specified period and would therefore be able to utilise the MAT credit so recognised (which is in accordance with the recommendations contained in the Guidance Note issued by ICAI ),the said asset is created by way of Credit to the statement of Profit and Loss account and is shown as MAT credit entitlement.

Deferred Tax Liability provided during the year includes the deferred tax liability recalculated and provided on prudential basis on account of reduction of unabsorbed benefits.

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.

Information about Secondary Geographical Segments

4. Employee Benefits

i. General Description of defined benefit plan

The Gratuity 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 account and the funded status and amounts recognized in the balance sheet.

a. Profit and Loss account

Net employee benefit expense (recognized in Personnel Expenses in Note 16)

b Balance sheet

Details of Provision for gratuity

c Changes in the present value of the defined benefit obligation are as follows:

d Changes in the fair value of plan assets are as follows:

e History of Asset values. Present Beneift Obligation, Surplus/Deficit & Experience Gains/Losses - Leave

History of Asset values. Present Beneift Obligation, Surplus/Deficit & Experience Gains/Losses - Gratuity

f The principal assumptions used in determining gratuity obligations for the Companyâs plans are shown below:

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

Provident Fund

Pending the issuance of Guidance Note from the Actuarial Society of India, the Companyâs Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at 31^st March, 2017 and no provision has been made.

ii Defined Contribution Plan

Employees Benefits Expenses in Note 17 includes the following contributions to defined contribution plan

5. Derivative Instruments and Unhedged Foreign Currency Exposure

The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency. The Information on derivative instruments is as follows:

6. Disputed foreign Currency Liability

Foreign currency liability of Rs.3501.89 lakhs (Previous Year Rs.3797.62 lakhs) shown under Creditors ( current laibilities ) has been disputed, a counter claim has been made and is not likely to be settled in near future, however this liability has been convertetd by applying exchange rate at the close of the year as per Accounting Standard.

7. Research & Development

Research & Development Expenditure of Rs.49.86 lakhs (Previous Year Rs.39.49 lakhs) have been accounted for in the respective heads of the Statement of Profit and Loss.

Donation

Donation and Contribution to Charitable Institution includes payment of Rs.10 lakhs to Shiv Sena , a political party.

8. Commission to Directors

Commission payable to Managing Director, Chairman & Independent Directors totaling to 2.50% of profit, amounting to? 337.58 lakhs is subject to approval by shareholders in the ensuing annual general meeting.

9. Previous Year Comparatives

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

Mar 31, 2016

on Financial Statements

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. The Term Loans are payable in 60 equal monthly installments from commencement of commercial production of new Phthalic Anhydride Plant i.e. 28^th 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 semiannual installments from 15.09.2013.

iii. Car loans 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, 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.

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.

Notes :

1. Buildings include Rs. 250/- (Previous year Rs. 250/-) for shares in office premises in a co-operative society.

2. Capital work in Progress includes preoperative expenses incurred during the year in the form of Employees benefits expense of Rs. 50.84 lacs (Previous Year Nil), Legal & Professional Fees Rs. 90.94 lacs (Previous Year Rs. Nil), Rates & Taxes Rs. 1.50 Lacs (Previous Year Nil), Other expenses Rs. 9.35 lacs (Previous Year Nil) and Plant & Machinery under construction Rs. 288.77 lacs (Previous Year Rs. 77.19 lacs).

3. Pursuant to the amendment to the Companies (Accounting Standards) Rules, 2006 by notification dated 29^th 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 loss of foreign exchange of Rs. 710.66 lacs for the year and loss of foreign exchange Rs. 742.33 lacs as on 31.03.2016 has been capitalized.

NOTE - 2: 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 - 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

Provident Fund

Pending the issuance of Guidance Note from the Actuarial Society of India, the Company''s Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at 31^st March, 2016 and no provision has been made.

NOTE - 4: DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE

The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency. The Information on derivative instruments is as follows:

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

NOTE - 5 : DISPUTED FOREIGN CURRENCY LIABILITY

Foreign currency liability of Rs. 3,797.62 Lacs (Previous Year Rs. 3,414.04 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.

NOTE - 6:RESEARCH & DEVELOPMENT

Research & Development Expenditure of Rs. 39.49 Lacs (Previous Year Rs. 39.82 Lacs) have been accounted for in the respective heads of the Statement of Profit and Loss.

NOTE - 7: PREVIOUS YEAR COMPARATIVES

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

Accounts of the Previous year has been audited by M/s Hariharan & Co.

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 Â 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 Â

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 Â Brother of Managing Director. Mrs. Raj Kumari Dhanuka Â Mother of Managing Director. Mrs. Santosh Saboo Â Wife of Executive Director.

c. Associates Â

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 Â 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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