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Notes to Accounts of Manali Petrochemicals Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

Manali Petrochemicals Limited (the 'Company') is a Public Company incorporated on June 11, 1986 in the State of Tamilnadu, India. The Company is engaged in the manufacture and sale of Propylene Oxide (PO), Propylene Glycol (PG) and Polyols (PY), which are used as industrial raw materials.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets acquired before 1 April, 2014, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

3 - Capital and other Commitments

Estimated value of contracts in capital account remaining to be executed (net of advances) and not provided for as on 31 March, 2015 is Rs. 4,015.54 lakhs (previous year Rs.637.25 lakhs).

(Rs. in lakhs) As at As at March 31, March 31, 2015 2014

4 - Contingent Liabilities

a) Bills discounted - 45.79

b) Letters of Credit / Guarantees 3,238.22 3,130.49

c) Disputed Excise & Customs demands 53.39 68.07

d) Disputed Sales Tax demands 56.98 57.71

e) Disputed Income Tax demands 3,448.17 2,335.11

f) Claims against Company not acknowledged as debt - 1,677.00

5 - There are no dues to Micro, Small & Medium Enterprises [MSME] as at the Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the auditors. Hence Trade payables - Acceptances - Others in Note 8 includes payable to creditors, other than MSME.

6 - Employee benefit plans

Defined contribution plans

The Company makes Provident fund and Superannuation contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 77.35 lakhs (year ended 31 March, 2014 - Rs.72 lakhs) for Provident Fund contributions and Rs. 29.53 lakhs (year ended 31 March, 2014 - Rs.28.80 lakhs) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable by the Company to these plans are at the rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i) Gratuity (included as part of gratuity expense as per Note 24 : Employee benefits expense).

ii) Post-employment benefits (included as part of Post-employment benefits as per Note 24 : Employee Benefits Expense).

iii) Compensated absences (included as a part of contribution to Provident & other funds as per Note 24: Employee Benefits) Expense.

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements.

7 - Related Party Disclosures

i) The list of related parties as identified by the Management and relied upon by the Auditor are as under List of Related Parties:

Associate Company : M/s SIDD Life Sciences Private Limited Key Management Personnel [KMP]:

Mr Muthukrishnan Ravi, Managing Director Enterprise over which Key Management Personnel exercises significant influence:

Tamilnadu Petroproducts Limited Related Party Transactions:

8 Details on derivative instruments and unhedged foreign currency exposures

(a) Forward exchange contracts, which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables.

9 Details of leasing arrangements

The Company has entered into operating lease arrangements for utilising the bulk storage facility at Ennore Port. The leases are non-cancellable and are for a period of 15 years . In the event of premature termination of this agreement prior to the expiry of fifteen year firm period, the Company is liable to make payment of termination compensation as per terms of agreement. The lease agreements provide for an increase in the lease payments by 3% every year.

The Company has entered into operating lease arrangements for office premises. The leases are non-cancellable and are for a period of 9 years. The lease agreements provide for an increase in the lease payments by 15% every 3 years.

10 Schedule III has been followed and previous year's figures have regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2014

1. CORPORATE INFORMATION

Manali Petrochemicals Limited (the ''Company'') is a Public Company incorporated on June 11, 1986 in the State of Tamilnadu, India. The Company is engaged in the manufacture and sale of Propylene Oxide (PO), Propylene Glycol (PG) and Polyols (PY), which are used as industrial raw materials.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The fi nancial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notifi ed under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Companies Act, as applicable. The fi nancial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the fi nancial statements are consistent with those followed in the previous year.

3 - Capital and other Commitments

Estimated value of contracts in capital account remaining to be executed (net of advances) and not provided for as on March 31, 2014 is Rs. 637.25 lakhs (previous year Rs.669.05 lakhs).

(Rs. in lakhs)

As at As at March 31, March 31, 2014 2013

4 - Contingent Liabilities

a) Bills discounted 45.79 144.96

b) Letters of Credit / Guarantees 3,130.49 2,673.11

c) Disputed Excise & Customs demands 68.07 68.07

d) Disputed Sales Tax demands 57.71 57.71

e) Disputed Income Tax demands 2,335.10 118.67

f) Claims against Company not acknowledged as debt 1,677.00 -

The above amounts are based on the notices of demand or the assessment orders or notifi cations by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outfl ows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the Judiciary. No reimbursements are expected.

5 - There are no dues to Micro, Small & Medium Enterprises [MSME] as at the Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identifi ed on the basis of information available with the Company and relied upon by the auditors. Hence Trade payables - Acceptances - Others in Note 8 includes payable to creditors, other than MSME.

6 - Employee benefi t plans

Defi ned contribution plans

The Company makes Provident fund and Superannuation contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specifi ed percentage of the payroll costs to fund the benefi ts. The Company recognised Rs. 72.00 lakhs (year ended March 31, 2013 - Rs.68.86 lakhs) for Provident Fund contributions and Rs. 28.80 lakhs (year ended March 31, 2013 - Rs.31.49 lakhs) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable by the Company to these plans are at the rates specifi ed in the rules of the schemes.

Defi ned benefit plans

The Company offers the following employee benefit schemes to its employees:

i) Gratuity (included as part of Contribution to Provident and other funds as per Note 24 : Employee Benefi ts Expense).

ii) Post-employment benefi ts (included as part of Post-employment benefi ts as per Note 24 : Employee Benefi ts Expense) Compensated absences are included as a part of contribution to Provident & other funds as per Note 24 : Employee Benefi ts The following table sets out the funded status of the defi ned benefit schemes and the amount recognised in the financial statements.

The expected rate of return on assets is determined based on the assessment made at the beginning of the year on the return expected on its existing portfolio, along with the estimated increment to the plan assets and expected yield on the respective assets in the portfolio during the year.

* The composition of investments in the fair value of plan assets relating to gratuity as given above relates to Plant I only. The Gratuity Fund relating to Plant II is maintained with Life Insurance Corporation of India and Plant II details could not be furnished in the absence of information from Life Insurance Corporation of India.

7 - Related Party Disclosures

i) The list of related parties as identified by the Management and relied upon by the Auditor are as under

List of Related Parties:

Associate:

SIDD Life Sciences Private Limited

Key Management Personnel:

Mr Muthukrishnan Ravi, Managing Director

Enterprise over which Key Management Personnel exercises signifi cant infl uence:

Tamilnadu Petroproducts Limited (with effect from 4th February 2013)

8 - Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classifi cation / disclosure.


Mar 31, 2013

1. Corporate Information

Manali Petrochemicals Limited (the ''Company'') is a Public Company incorporated on June 11, 1986 in the State of Tamilnadu, India. The Company is engaged in the manufacture and sale of Propylene Oxide (PO), Propylene Glycol (PG) and Polyols (PY), which are used as industrial raw materials.

2. Basis of Preparation of Financial Statements

The fi nancial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these fi nancial statements to comply with all material aspects with the Accounting Standards notifi ed under the Companies (Accounting Standard) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The fi nancial statements have been prepared on Accrual basis and under the historical cost convention. The Accounting policies adopted in the preparation of fi nancial statements are consistent with those of the previous year.

3. Capital and other Commitments

Estimated value of contracts in capital account remaining to be executed (net of advances) and not provided for as on March 31, 2013 is Rs.669.05 lakhs (Previous Year Rs.387.13 lakhs).

As at As at March 31, 2013 March 31, 2012

4. Contingent Liabilities

(a) Bills discounted 144.96 413.44

(b) Letters of Credit / Guarantees 2,673.11 3,075.75

(c) Disputed Excise & Customs demands 68.07 68.07

(d) Disputed Sales Tax demands 57.71 57.71

(e) Disputed Income Tax demands 118.67 118.67

5. There are no dues to Micro, Small & Medium Enterprises [MSME] as at the Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identifi ed on the basis of information available with the Company and relied upon by the auditors. Hence ''Trade Payables - Acceptances - Others'' in Note 8 includes payable to creditors, other than MSME.

6. Employee benefi t plans

Defi ned contribution plans

The Company makes Provident fund and Superannuation contributions to defi ned contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specifi ed percentage of the payroll costs to fund the benefi ts. The Company recognised Rs.68.86 lakhs (year ended March 31, 2012 - Rs.65.64 lakhs) for Provident Fund contributions and Rs.31.49 lakhs (year ended March 31, 2012 - Rs.39.98 lakhs) for Superannuation Fund contributions in the Statement of Profi t and Loss. The contributions payable by the Company to these plans are at the rates specifi ed in the rules of the schemes.

Defi ned benefi t plans

The Company offers the following employee benefi t schemes to its employees: i) Gratuity

ii) Post-employment benefi ts and iii) Compensated absences

7. Related Party Disclosures

List of Related Parties: Associate:

SIDD Life Sciences Private Limited

Key Management Personnel :

Mr Muthukrishnan Ravi, Managing Director

Enterprise over which Key Management Personnel exercises signifi cant infl uence:

Tamilnadu Petroproducts Limited (with effect from 4th February 2013)

8. Previous year''s fi gures have been regrouped / reclassifi ed, wherever necessary, to correspond with the current year''s classifi cation / disclosure.


Mar 31, 2012

1. Corporate Information

Manali Petrochemicals Limited (the 'Company') is a public Company incorporated on 11th June 1986 in the state of Tamilnadu, India. The Company is engaged in the manufacture and sale of Propylene Oxide (PO), Propylene Glycol (PG) and Polyols (PY), which are used as industrial raw materials.

2. Basis of preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with Generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply with all material aspects with the accounting standards notified under the Companies (Accounting Standard) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The Accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3.1 Change in depreciation rates

During the year the Company has revised the useful life of Computers with effect from 1st April 2011 and hence the depreciation rates applied on these assets have been changed from 16.21% to 33.33%. Accordingly, the carrying value of these assets as on 1st April 2011 are being depreciated over their remaining revised useful life. The consequential impact of this revision on the financial statements is not material.

Provision for Wage Arrears

During the year 2004, a claim was raised against the Company by its workmen demanding a revision to wages for the years from 2001 to 2004. This matter was adjudicated by the Industrial Tribunal on 23rd September 2008. The Company filed an appeal with the Supreme Court against the decision of the Tribunal. As per the directions of the Supreme Court, the Company had made interim payments aggregating to Rs.238.96 lakhs (including Rs.85.35 lakhs paid during the year), which have been adjusted against provisions made in earlier years. The appeal has been 'partly heard' by the Supreme Court as of 31st March 2012. Pending final decision of the Supreme Court, the Company, as a matter of abundant caution, has estimated the additional liability at Rs.695 lakhs and has during the year created a provision for the said amount. This, according to the management, is the best estimate, which would more than cover the ultimate liability, that the Company may incur in this regard.

Cash and Cash Equivalents as at March 31, 2012 and March 31, 2011 include restricted bank balances of Rs.227.01 lakhs and Rs.105.45 lakhs respectively. The restrictions are primarily on account of bank balances being held as margin money deposits against Letters of Credit and Bank Guarantees.

Balance with banks include margin monies amounting to Rs.227.01 lakhs (Previous year Rs.105.45 lakhs) which have an original maturity period of less than 12 months.

(a) Represents Excise Duty related to the difference between the inventories at the beginning and at the end of the year.

(b) Other expenses include those relating to R&D aggregating to Rs.11.62 lakhs (Previous Year Rs.7.30 lakhs).

4 - Capital and other Commitments

Estimated value of contracts in capital account remaining to be executed (net of advances) and not provided for is Rs.387.13 lakhs (Previous year Rs.379.42 lakhs).

(Rs. in lakhs)

As at As at March 31, 2012 March 31, 2011

5 - Contingent Liabilities

(a) Bills discounted 413.44 308.39

(b) Letters of Credit / Guarantees 3,075.75 2,016.29

(c) Disputed Excise & Customs demands 68.07 74.05

(d) Disputed Sales Tax demands 58.88 57.71

(e) Disputed Income Tax demands 118.67 488.02

The Company is contesting the above demands and the Management believes that it has reasonable chances of the appeals filed against these demands to be decided in its favour. Accordingly no provision is considered necessary in this regard. Against the above demands, the Company has paid Rs.91.30 lakhs (Previous year - Rs. 97.28 lakhs) which is included in long-term loans and advances.

6 - There are no dues to Micro, Small & Medium Enterprises [MSME] as at the Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the Auditors. Hence "Trade payables-other than acceptances" in Note 8 represent payable to creditors other than MSME.

7 - Employee benefit plans Defined contribution plans

The Company makes Provident Fund and Superannuation contributions under defined contribution plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.65.64 lakhs (Previous year Rs.55.65 lakhs) for Provident Fund contributions and Rs.39.98 lakhs (Previous year Rs.33.81 lakhs) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these Plans by the Company are at the rates specified in the rules of the Schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i) Gratuity

ii) Post-employment benefits and

iii) Compensated absences

8 - The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted 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, 2011

1 Estimated value of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 379.42 lakhs (previous year Rs.401.45 lakhs).

2 Contingent Liabilities

As at 31st March 2011 As at 31st March 2010 (Rs. in lakhs) (Rs. in lakhs)

a) Bills discounted 308.39 375.57

b) Letters of Credit/Guarantees 2016.29 1551.87

c) Excise & Customs claims under appeal 74.05 93.88

d) Disputed Sales Tax demands 57.71 20.97

e) Disputed Income Tax demand 488.02 391.78

In the opinion of the Management, no provision is considered necessary for the disputed amounts mentioned above on the grounds that there are reasonable chances of successful outcome of appeals filed by the company.

Out of the above, Rs. 97.28 lakhs (Previous year - Rs. 90.73 lakhs) has been paid towards the above mentioned dues.

* Income tax appeal decided by CIT (Appeals) in companys favour, but not on which department has gone on appeal

4 There are no dues to micro, small & medium enterprises as at the Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the company and relied upon by the auditors.

5 Excise Duty

Total Excise Duty on Sales for the year has been disclosed as reduction from the turnover. Excise duty related to the difference between the closing stock and opening stock has been included in Schedule 14 "Manufacturing & Other Expenses".

6 The Company is engaged in the business of manufacture of Petrochemicals, which is the only segment in the context of reporting business segment in accordance with Accounting Standard 17 on Segment Reporting issued by the Institute of Chartered Accountant of India. The Company does not disclose multiple geographical segments since its operations are primarily carried out in India.

7 Related Party Disclosures: List of Related Parties Associates:

Southern Petrochemical Industries Corporation Limited SIDD Life Sciences Private Limited

Key Management Personnel:

Mr. G. Ramachandran, Managing Director Mr. K.K. Rajagopalan, Director (Finance)

8 Earnings Per Share

There are no potential equity shares and hence the basic and diluted earnings per share are the same. Basic earnings per share is calculated by dividing the net profit after tax for the year attributable to the equity share holders by the weighted average number of equity shares outstanding during the year.

9 Salaries, Wages and Bonus include Rs. 59.97 lakhs (Previous Year Rs. 43.73 lakhs) towards R&D expenses and Other expenses include Rs.7.30 lakhs (Previous Year Rs. 7.75 lakhs) towards R&D expenses.

10 Previous years figures have been re-grouped wherever necessary to conform to the current years classification.


Mar 31, 2010

1 Estimated value of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 401.45 lakhs (previous year Rs.434.59 lakhs).

2 Contingent Liabilities

As at 31st March 2010 As at 31st March 2009

(Rs. in lakhs) (Rs. in lakhs)

a) Bills discounted 375.57 196.10

b) Letters of Credit / Guarantees 1,551.87 1,482.58

c) Excise & Customs claims under appeal 93.88 95.00

d) Disputed Sales Tax demands 20.97 31.82

e) Disputed Income Tax demand 391.78 391.78

Nature of the Dues Forum before which the dispute is pending Period to which it Amount Amount relates (Rs.in lakhs) (Rs.in Lakhs) (a) Excise Deputy Commissioner 1991-92 & of Central 1992-93 - 1.43 Excise Customs, Excise and Service Tax Appellate Tribunal 2006-07 5,98 5.67

High Court of Madras Various Years 24.47 24.47

DGFT, New Delhi 2007-08 53.39 53.39

b) Customs Duty High Court of Madras 1993-94 10.04 10.04

93.88 95.00

c) Sales Tax Sales tax Tribunal under Sales Tax Act Various Years 10.74 28.38

High court of Madras Various Years 10.23 3.44

20.97 31.82

d) Income Tax Commissioner of Income Tax (Appeals) 2005-06 391.78 391.78

391.78 391.78

In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the grounds that there are reasonable chances of successful outcome of appeals filed by the company. Out of the above, Rs. 90.73 lakhs has been paid towards the above mentioned dues.,

3 There are no dues to micro, small & medium enterprises as at the Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the company and relied upon by the auditors.

4 Excise Duty

Total Excise Duty on Sales for the year has been disclosed as reduction from the turnover. Excise duty related to the difference between the closing stock and opening stock has been included in Schedule 14 "Manufacturing & Other Expenses".

5 The Company is engaged in the business of manufacture of Petrochemicals, which is the only segment in the context of reporting business segment in accordance with Accounting Standard 17 on segment reporting issued by The Institute of Chartered Accountants of India.

6 In view of the profits for the year as well as prior three years and also-considering the future profit projections, the Company is hopeful of being able to take credit the tax paid under MAT for adjustment against the normal income tax payable in future.

7 The Salaries, Wages and Bonus include Rs. 43.73 lakhs (Previous Year Rs. 45.77 lakhs) towards R&D expenses and Other expenses include Rs. 7.75 lakhs (Previous Year Rs. 4.43 lakhs) towards R&D expenses.

8 Previous years figures have been re-grouped wherever necessary to conform to the current years classification.

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