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Notes to Accounts of Manali Petrochemicals Ltd.

Mar 31, 2023

Terms / rights attached to equity shares

The company has only one class of shares referred to as equity shares having a Face value of ''5 fully paid up. In the event of repayment of Share Capital, the same will be in proportion to the number of equity shares held. Each fully paid up equity share holders is entitled to one vote per share and carries rights to dividends as may be declared by the Company.

The above Deferred Income was received as subsidy from Ozone Cell, Ministry of Environment and Forests, Government of India for phasing out of HCFC and the same has been considered for Deferred Income as per Ind AS 20: Accounting for Government Grants and Disclosure of Government Assistance. The current portion of the above said subsidy is shown under Other Current Liabilities in Note: 23

* Provision for wage arrears

I n 2004, a claim was made against the Company by its workmen, demanding wage revision for the years from 2001 to 2004. This matter was adjudicated by the Industrial Tribunal on October 23, 2008, which was challenged by the Company in the Supreme Court. In October 2015, the employees'' union filed an Interim Application (IA) No. 12 of 2015 in the Supreme court. Upon hearing both sides, the Supreme court gave directions to withdraw the SLP and approch the High Court. Accordingly a fresh application has been filed in the Madras High Court which is pending.

In the meantime based on the Management''s efforts most of the workmen have opted for out of court settlement to whom payments were made and adjusted against the earlier provisions. The provision carried is in respect of the remaining workmen, who have not yet come forward for out of court settlement and would be subject to the final outcome of the case. The management is confident that the provision carried in the books of accounts would be adequate to meet the expected liabilities.

37. Exceptional Item

For the previous year:

The exceptional items of '' 668 lakh during the year 2021-22 related to the following:

(i) Arrears of lease rent from 01.07.1987 to 30.06.2020, net of Provisions made '' 382 Lakhs

(ii) Interim environmental compensation pursuant to an order of the Southern Zonal Bench of the National Green Tribunal '' 200 Lakhs

(iii) Assets found to be no longer useful written off during the quarter under review 31st March 2022''86 Lakhs

38. Segment Reporting (IND AS 108):

The Company is exclusively engaged in the business of Manufacture and sale of Petrochemical products primarily in India. As per Ind AS 108 “Operating Segments” specified under Section 133 of the Companies Act, 2013, there are no reportable segments applicable to the Company.

During the year 2019, the Company received demand from Tamilnadu Pollution Control Board (TNPCB) seeking payment of '' 200 lakh as interim environmental compensation for causing damages to the environment pursuant to order of National Green Tribunal (NGT). Further the NGT has directed to identify the industries that are causing pollution and collect the environmental compensation. In the opinion of the Company the PCB has made the demand without following the above direction.

* The company has received notice from Income Tax Department for AY 2015-16 demanding '' 3,513 Lakhs pertaining to addition of income of '' 125 lakhs. The department has not considered the advance Tax paid, Self-assesment Tax paid, and Tax Deducted at Source (TDS) of '' 3,665 lakhs while arriving at the demand. The company has not acknowledged demand and has filed a rectification petition.

** Against the above demands, the Company has not paid any amount during the year (NIL in previous year)

The above amounts are based on the notices of demand or the assessment orders or notifications by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, 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.

41. Employee Benefits (Ind AS 19)

Defined contribution plans

The Company makes Provident fund and Pension (Funded) 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 '' 128 lakhs (year ended 31 March, 2022 - '' 110 lakhs) for Provident Fund contributions and '' 148 lakhs (year ended 31 March, 2022 - '' 192 lakhs) for Pension (Funded) 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 30 : Employee benefits expense).

ii) Post-employment benefits (included as part of Post-employment benefits as per Note 30 : Employee benefits expense)

iii) Compensated absences (included as a part of contribution to Provident & other funds as per Note 30 : Employee benefits expense).

Gratuity- Plant 1:

Gratuity payable to employees is based on the employees'' service and last drawn salary at the time of leaving the services of the Company and is in accordance with the rules applicable for payment of Gratuity.

Inherent Risk

The Plan is Defined Benefit in nature, administered by a Trust which is sponsored by the Company and hence it underwrites all the risks pertaining to the Plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying Plan assets. This may result in an increase in cost of providing these benefits to its employees in future. Since these benefits are lumpsum in nature, the Plan is not subject to any longivity risk.

Gratuity- Plant 2:

The Gratuity Fund relating to Plant -II is being maintained with Life Insurance Corporation of India and the Company contributes to the fund based on the valuation by LIC.

The composition of investments in the fair value of plan assets relating to gratuity as given above is relating to employees of Plant -I only. The Gratuity fund relating to Plant - II is being maintained with Life Insurance Corporation of India (LIC) and as per the information provided by LIC the total fair value of plan assets and present value of obligations as on March 31,2023 were '' 88 lakh and ''131 lakh respectively. [March 31,2022 - '' 104 lakh and '' 161 lakh]

43. Operating Leases (Ind AS 116):

Bulk storage facility at Ennore Port

The lease is for a period of 15 years from 1st April, 2014 . 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 agreement provides for an increase in the lease payments by 3% every year. Corporate Office premises

The lease is for a period of 9 years from 1st November 2014. The lease agreement provides for an increase in the lease payments by 15% every 3 years.

Plant-2 premises

The lease rent that has been revised has been considered as basis for adopting Ind AS 116 “Leases” with effective from 01.04.2021. Accordingly, the Right of Use Asset value and corresponding lease liability based on the above have been arrived at ''3,323 Lakhs and recognised in the books of accounts. Adjustments, if any necessitated by the actual terms of the renewal would be made to these in due course, on receipt of the same from the Government''

The total CSR spent during the year was '' 256 Lakhs out of which '' 156 Lakhs has been used from the unspent accounts of the previous years and '' 100 Lakhs has been spent from the current year''s CSR account. The total CSR obligation for the year is '' 559 Lakhs and the unspent CSR for the year is '' 460 Lakhs. The Unspent amount is pertaining to the ongoing projects approved by Board of Directors which has been transferred to designated account. The Expenditure during the year was towards Primary Health care centre, Drinking water and Sanitation in schools, Plantation of trees and Samplings.

Amount spent for CSR obligations during the year through Related Party AM Foundation is '' 20 Lakhs.

47. Capital Management (Ind AS 1)

The objective of the Company''s capital management structure is to ensure sufficient liquidity to support its business and provide adequate return to shareholders. Management monitors the long term cash flow requirements including externally imposed capital requirements of the business in order to assess the requirement for changes to the capital structure to meet the said objective. As part of this monitoring, the management considers the cost of capital and the risks associated with each class of capital and makes adjustments to the capital structure, where appropriate, in light of changes in economic conditions and the risk characteristics of the underlying assets. The funding requirement is met through a combination of equity, internal accruals, borrowings or undertake other restructuring activities as appropriate.

No changes were made in the objectives, policies or processes during the year ended 31 March 2023.

48. Financial Risk Management Objectives and Policies (IND AS 107):

Financial Risk Management Framework

Company''s principal financial liabilities comprise borrowings, trade payables and Other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include Investments, Trade receivables, loans, cash and bank balances and other financial assets.

Risk Exposures and Responses

The Company is exposed to market risk, credit risk and liquidity risk. The Board of Directors reviews policies for managing each of these risks, which are summarised below.

i) Market Risk

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 a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowing.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

The Company''s exposure to interest rate risk relates primarily to interest bearing financial liabilities. Interest rate risk is managed by the company on an on-going basis with the primary objective of limiting the extent to which interest expense could be affected by an adverse movement in interest rates.

Foreign Currency Risk

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the, raw materials and consumables, capital expenditure, exports of Polyols and the Company''s net investments in foreign subsidiaries. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged item, the Company evaluates exchange rate exposure arising from foreign currency transactions. The Company follows established forex risk management policies and standard operating procedures. It uses derivative instruments forwards contract to hedge exposure to foreign currency risk.

Commodity Risk

The Company mainly sources its materials domestically and the exports are not substantial, there has been no major commodity price risks faced. Accordingly, there has been no commodity hedging activities undertaken by the Company. As regards the Foreign exchange risks, the Company takes forward contracts based on the exposure and extant market conditions and details of hedging are available in the financial statements

ii. Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advance for suppliers) and from its financing/ investing activities, including deposits with banks, mutual fund investments, foreign exchange transactions and financial guarantees.

Trade Receivables

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Total Trade receivable as on March 31,2023 is '' 10,743 Lakhs (March 31, 2022''13,357 Lakh)

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

Cash and Cash Equivalents and Bank Deposits

Credit risk on cash and cash equivalents and balances with Banks is considered to be minimal as the counterparties are all substantial banks and Corporates with high credit ratings. The Directors are unaware of any factors affecting the recoverability of outstanding balances at 31 March 2023.

iii. Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet

obligations when due. The Company''s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows.

B) Fair value measurements (Ind AS 113)

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorises the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all shares which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates.The mutual fund units are valued using the closing Net Asset Value. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

50. Additional regulatory Information required under Schedule III of Companies Act, 2013

(i) Details of Benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(iii) Wilful defaulter:

The company has not been declared as Wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Registration of charges:

The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The group has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilization of borrowed funds and share premium

During the year, except investment of '' 28,819 lakhs in the wholly owned subsidiary, the Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous financial year in the tax assessments under the Income Tax Act, 1961, and hence requirement to record in the books of accounts does not arise.

(ix) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(x) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous financial year.

51. Note on Leasehold Land

a) The period of lease relating to the leasehold land on which one of the manufacturing units (Plant-2) of the Company is operating expired on June 30, 2017 for which requests for renewal have been filed by the Company with Govt. of Tamilnadu, which is under process. The Management is confident of renewal of the lease as the land has been put to use for the purpose for which it has been allotted and hence no adjustments for impact of non-renewal, (which however are unascertainable at this point in time), are deemed necessary in the financial statements.

b) Further to receipt of demand notice in financial year 2021-22 revising the lease rent from the commencement of lease till 30.06.2020, which the company has accepted and remitted the same. This revised lease rent has been considered for the subsequent period from 01.07.2020 onwards including the current financial year notwithstanding that no specific demand notice has been received from the lessor towards the lease rent. The lease rent that has been revised has been considered as basis for adopting Ind AS 116 “Leases” with effective from 01.04.2021. Accordingly, the Right of Use Asset value and corresponding lease liability based on the above have been arrived at ''3,323 Lakhs and recognised in the books of accounts for the financial year 2021-22. Adjustments, if any necessitated by the actual terms of the renewal would be made to these in due course, on receipt of the same from the Government.

The Auditors have included an Emphasis of Matter para in their report on the Financial Statements regarding the above (a)

52. Regrouping

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

53. Approval of Financial Statements

The financial statements of Manali Petrochemicals Limited were reviewed by Audit Committee and approved by

the Board of Directors at their meetings held on May 25, 2023.


Mar 31, 2018

1. General 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.

* During the year 2012-13, 16,48,000 equity shares of Rs. 10 each, fully paid-up, in Mercantile Ventures Limited [formerly MCC Finance Limited (MCC)] were allotted in pursuance of a Scheme of Compromise approved by the Honorable Madras High Court, at a premium of Rs. 15 per share towards past dues to the Company as reflected in the books of MCC. Since the Company had recovered the said dues during the years 1999 to 2001 by adjusting the same against dues from a then associate of MCC, an amount equivalent to the above allotment was accounted for as payable to the then associate of MCC in the books of the Company. The shares of this Company has been listed in BSE on 9th February 2015. During the year 2017-18, the shares were transferred to the said Associate of Mercantile Ventures Limited adjusting the same against the payable shown under Trade Payables, consequently the asset as well as liability amounting to Rs. 412 lakh has been extinguished.

* Cheques on hand as at March 31, 2017, includes Rs. 860.66 lakh received towards repayment of Inter-Corporate Deposit along with Interest, realised subsequently.

Cash on hand includes Rs. 1.38 lakh (2016-17 - Rs. Nil and 2015-16 - Rs. Nil) of various foreign currencies.

The above deposits represent amounts received from two entities towards use of treated effluent pipeline as per agreements entered into with them. These deposits are interest free and are repayable in fifteen equal annual installments commencing from April 2012.

The above Deferred Income was received as subsidy from Ozone Cell, Ministry of Environment and Forests, Government of India for phasing out of HCFC. Stage I was completed in all aspects by December 2016. Ozone Cell appointed an Independent consultant to inspect the facility and the same was carried out in May 2017. The Company has received 100% subsidy of Rs. 369.34 lakh and the same has been considered as Deferred Income as per IndAS 20 - Accounting for Government Grants and Disclosure of Government Assistance. The current portion of the above said subsidy is shown under Other Current Liabilities in Note: 23.

* Provision for wage arrears

In 2004, a claim was made against the Company by its workmen, demanding wage revision for the years from 2001 to 2004. This matter was adjudicated by the Industrial Tribunal on October 23, 2008, which was challenged by the Company in the Supreme Court. In October 2015, the Employees’ Union filed an Interim Application (IA) No. 12 of 2015 in the Supreme court. Upon hearing both sides, the Supreme court gave directions to withdraw the SLP and approach the Madras High Court, where the matter is pending at present. Based on the Management’s efforts a majority of the workmen opted for out of court settlement to whom payments were made in 2017-18 and adjusted against the earlier provisions. The balance provision is in respect of the other workmen, who have not yet come forward for out of court settlement and the provision is carried pending the final outcome of the case.

* Consequent to the introduction of Goods and Services Tax (GST) w.e.f 01.07.2017, revenue from operation for the year ended 31.03.2018 is disclosed net of GST. Till 30.06.2017, Excise Duty recovered from sale of excisable goods was included in revenue from operations, Excise Duty remitted was included in expenditure and difference between Excise Duty on opening and closing inventories was included in Other Expenses. Hence, revenue from the operations and excise duty remitted for the year are not comparable with earlier period figures.

Excise Duty on decrease in finished goods amounting to Rs. 408.80 lakh (March 31, 2017 - increase Rs. 121.86 lakh) has been considered as expense during the year.

2 Segment Reporting (IndAS 108)

The Company is exclusively engaged in the business of Manufacture and sale of Petrochemical products primarily in India. As per IndAS 108 “Operating Segments” specified under Section 133 of the Companies Act, 2013, there are no reportable or geographical segments applicable to the Company.

** Against the above demands, the Company has paid Rs. 21.64 lakh (Rs. 11.71 lakh in 2016-17 and Rs. 100 lakh in 201516)

The above amounts are based on the notices of demand or the assessment orders or notifications by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, 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.

3 Payable to MSME

Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

There are no over due amounts payable to Micro, Small & Medium Enterprises [MSME] as on the Balance sheet date or anytime during the year and hence no interest has been paid/payable. 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. Employee Benefits (IndAS 19)

Defined contribution plans

The Company makes Provident Fund and Pension (Funded) 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. 82.05 lakh (year ended 31 March, 2017 -Rs. 96.07 lakh) for Provident Fund contributions and Rs. 29.12 lakh (year ended 31 March, 2017 - Rs. 32.10 lakh) for Pension (Funded) 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 29: Employee Benefits Expense).

ii) Post-employment benefits (included as part of Post-employment benefits as per Note 29 : Employee Benefits Expense)

iii) Compensated absences (included as a part of Salaries & Wages as per Note 29 : Employee Benefits Expense).

Gratuity- Plant 1

Gratuity payable to employees is based on the employees’ service and last drawn salary at the time of leaving the services of the Company and is in accordance with the applicable rules for payment of Gratuity.

Inherent Risk

The Plan is Defined Benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertianing to the Plan. In particluar, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying Plan assets. This may result in an increase in cost of providing these benefits to its employees in future. Since these benefits are lumpsum in nature, the Plan is not subject to any longivity risk.

Gratuity- Plant 2

The Gratuity Fund relating to Plant -II is being maintained with Life Insurance Corporation of India and the Company contributes to the fund.

Pension

The Company considers pension for its employees at Plant 1, in accordance with the rules of the Company.

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

Sensitivity Analysis

Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined benefit obligations and based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant.

* Related Parties under IndAS 24 and not under erstwhile AS.

Note: Managing Director is not in receipt of any remuneration but in respect of his service would be eligible for postretirement benefits as per the applicable law and service rules of the Company. The details of remunerations to the Whole-Time Director and Sitting Fees to other Non-Executive Directors are disclosed in the Corporate Governance Report.

5 Operating Leases (IndAS 17)

Details of operating leasing arrangements - Non-cancellable leases:

Bulk storage facility at Ennore Port-

The lease is for a period of 15 years from 1st April, 2014. 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 agreement provides for an increase in the lease payments by 3% every year.

Storage of polyols at Meerut-

The lease is is for a period of 54 months from 1st February 2016. The lease agreement provides for an increase of 4% every year.

Office premises-

The lease is for a period of 9 years from 1st November 2014. The lease agreement provides for an increase in the lease payments by 15% every 3 years.

6 Corporate Social Responsibility

As per Section 135 of the companies at 2013, the Company needs to spend 2% of its average net profit of the immediately preceding three financial years on corporate social responsibility (CSR) activities. The Company has incurred CSR expenditure on activities specified in Schedule VII of the Companies Act, 2013.

- Gross amount required to be spent by the Company during the year 133.82 lakh

- Amount spent during the year on:

7 Capital Management (IndAS 1)

The objective of the Company’s capital management structure is to ensure sufficient liquidity to support its business and provide adequate return to shareholders. Management monitors the long term cash flow requirements including externally imposed capital requirements of the business in order to assess the requirement for changes to the capital structure to meet the said objective. As part of this monitoring, the Management considers the cost of capital and the risks associated with each class of capital and makes adjustments to the capital structure, where appropriate, in light of changes in economic conditions and the risk characteristics of the underlying assets. The funding requirement is met through a combination of equity, internal accruals, borrowings or undertaking other restructuring activities as appropriate.

No changes were made in the objectives, policies or processes during the year ended 31 March 2018.

8 Financial Risk Management Objectives and Policies (IndAS 107)

Financial Risk Management Framework

Company’s principal financial liabilities comprise borrowings, trade payables and Other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include Investments, Trade receivables, loans, cash and bank balances and other financial assets. Risk Exposures and Responses

The Company is exposed to market risk, credit risk and liquidity risk. The Board of Directors reviews policies for managing each of these risks, which are summarised below.

i) Market Risk

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 a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowing. Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

The Company’s exposure to interest rate risk relates primarily to interest bearing financial liabilities. Interest rate risk is managed by the Company on an on-going basis with the primary objective of limiting the extent to which interest expense could be affected by an adverse movement in interest rates.

Sensitivity Analysis

An increase/decrease of 100 basis points in interest rate at the end of the reporting period for the variable financial instruments would (decrease)/increase profit after taxation for the year by the amounts shown below. This analysis assumes all other variables remain constant.

Foreign Currency Risk

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the, raw materials and consumables, capital expenditure, exports of Polyols and the Company’s net investments in foreign subsidiaries. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged item, the Company evaluates exchange rate exposure arising from foreign currency transactions. The Company follows established forex risk management policies and standard operating procedures. It uses derivative instruments forwards contract to hedge exposure to foreign currency risk.

Sensitivity

If foreign currency rates had moved as illustrated in the table below, with all other variables held constant, currency fluctuations on unhedged foreign currency denominated financial instruments, post tax profit would have been affected as follows:

Commodity Risk

The Company mainly sources its materials domestically and the exports are not substantial, there has been no major commodity price risks faced. Accordingly, there has been no commodity hedging activities undertaken by the Company. As regards the Foreign exchange risks, the Company takes forward contracts based on the exposure and extant market conditions and details of hedging are available in the Financial Statements.

ii. Credit risk management

Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing/ investing activities, including deposits with banks, mutual fund investments, foreign exchange transactions and financial guarantees.

Trade Receivables:

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined.

Total Trade receivable as on March 31, 2018 is Rs. 7,646.28 lakh (March 31, 2017 Rs. 6,886.68 lakh, April 01, 2016 Rs. 9,544.74 lakh)

As per simplified approach, the Company makes provisions for expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provisions at each reporting date wherever outstanding is for longer period and involves higher risk.

Investments, Cash and Cash Equivalents and Bank Deposits:

Credit risk on cash and cash equivalents, balances with Banks and Current Investments is considered to be minimal as the counterparties are all substantial banks with high credit ratings. The Directors are unaware of any factors affecting the recoverability of outstanding balances at 31 March 2018.

iii. Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

The table below provides details regarding the remaining contractual maturities of financial liabilities and investments at the reporting date based on contractual undiscounted payments.

B) Fair Value measurements (IndAS 113)

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company has established the following fair value hierarchy that categorises the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all bonds which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

9 First Time Adoption of IndAS (IndAS 101)

These Financial Statements, for the year ended 31 March 2018, are the first Financial Statements the Company has prepared in accordance with IndAS. For periods up to and including the year ended 31 March 2017, the Company prepared its Financial Statements in accordance with the then Accounting Standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared Financial Statements which comply with IndAS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these Financial Statements, the Company’s opening Balance Sheet was prepared as at 1 April 2016, the Company’s date of transition to IndAS. An explanation of how the transition from previous GAAP to IndAS has affected the Company’s financial position, financial performance and cash flows is set out below:

i) Transition election

a) Optional Exemptions

The Company applying IndAS principle for measurement of recognised assets and liabilities is subject to availment of certain optional exemptions, apart from mandatory exceptions, which were availed by the Company as detailed below:

1 Deemed Cost for property, plant and equipment, investment property, and intangible assets

The Company has elected to avail exemption under IndAS 101 to use Indian GAAP carrying value as deemed cost at the date of transition for all items of property, plant and equipment except free hold land and intangible assets as per the statement of financial position prepared in accordance with previous GAAP. Free hold Land has been revalued on the transition date and fair value is considered as deemed cost.

2 Investments in subsidiaries in Standalone Financial Statements

The Company has elected to carry its investment in subsidiary, joint venture and associates at deemed cost which is its previous GAAP carrying amount at the date of transition to IndAS.

3 Designation of previously recognised financial instruments

The Company has designated unquoted equity instruments other than investments in subsidiaries and jointly controlled entities held at April 01, 2016 as fair value through OCI investments.

As per IndAS 109, an entity can make an irrevocable election to present in Other Comprehensive Income the subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.

4 Fair value measurement of financial assets or financial liabilities at initial recognition

As per IndAS exemption the Company has not fair valued the financial assets and liailities retrospectively and has measured the same prospectively.

b) Mandatory Exceptions

The Mandatory exceptions applicable to the Company are given below:

1 Estimates

The estimates at 1 April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with

(i) FVTOCI - unquoted equity shares

(ii) Impairment of financial assets based on the risk exposure and application of ECL model.

The estimates used by the Company to present these amounts in accordance with IndAS reflect conditions at 1 April 2016, the date of transition to IndAS and as of March 31, 2017.

2 Derecognition of assets and liabilities

IndAS 101 requires a first-time adopter to apply the de-recognition provisions of IndAS 109 prospectively for transactions occurring on or after the date of transition to IndAS. However, IndAS 101 allows a first-time adopter to apply the de-recognition requirements in IndAS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply IndAS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of IndAS 109 prospectively from the date of transition to IndAS.

3 Classification and measurment of financial assets and liabilities

IndAS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to IndAS.

4 Impairment of Financial assets

The Company has applied the impairment requirements of IndAS 109 retrospectively; however, as permitted by IndAS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date.

Notes to the Reconciliation of equity as April 1, 2016 and March 31, 2017 and Total Comprehensive Income for the year ended March 31, 2017 :

a The Company has considered fair value for property, viz free hold land ad measuring over 28.48 acres, situated in India, in accordance with stipulations of IndAS 101 with the resultant Impact being accounted for in the reserves.

b Under IGAAP, proposed dividends including DDT are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under IndAS, proposed dividend is recognised as a liability in the period in which it is declared (on approval of shareholders in a general meeting) or paid. In case of the Company, the declaration of dividend occurs after period end. Accordingly, proposed dividend has been reversed as at the date of transition and adjusted in retained earnings in financial year 2016-17 when paid. c Rent Equalisation accounted in the IGAAP has been reversed in IndAS Transition and accordingly credited to the retained earning in other equity.

d The Company has designated investments other than Investment in Subsidiary, Joint Arrangements and Associates at Fair Value through Profit and Loss (FVTOCI). IndAS requires FVTOCI investments to be measured at fair value. At the date of transition to IndAS, difference between the fair value of investment and IGAAP carrying amount has been recognised in Retained Earnings.

e The provision is made against receivables based on expected credit loss model as per IndAS 109.

f Pursuant to adoption of IndAS, the Company had assessed the deferred tax assets/ liabilities in accordance with IndAS 12. Adjustments to deferred tax assets/ liabilities arising on such assessment have been recognised in the reserves.

g Depreciation adjustment to property plant and equipment on adoption of IndAS.

h Both under IGAAP and IndAS, the Company recognised costs to its post-employment defined benefit plan on an actuarial basis. Under IGAAP, the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under IndAS, re-measurement (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. I Statement of cash flows : The transition from Indian GAAP to IndAS does not have a material impact on the Standalone statement of cash flows.

10 Note on Leasehold Land

The period of lease relating to the leasehold land on which one of the manufacturing units of the Company is operating expired on June 30, 2017 for which requests for renewal have been filed by the Company with Govt. of Tamilnadu, which is under process. The Management is confident of renewal of the lease as the land has been put to use for the purpose for which it has been allotted and hence no adjustments for impact of non-renewal, (which however are unascertainable at this point in time), are deemed necessary in the financial results.

11 Regrouping / Reclassification

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

12 Approval of Financial Statements

The Financial Statements of Manali Petrochemicals Limited were approved by the Board of Directors at its meeting held on May 16, 2018


Mar 31, 2017

Notes:

There has been no movement in the Share Capital during the year. The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of the equity shares is entitled to one vote per share. In the event of repayment of Share Capital, the same will be in proportion to the number of equity shares held. For the Year ended 31 March, 2017, the amount of dividend recommended as distribution to equity shareholders is Re. 0.50 per share (previous year: Re. 0.50 per share). The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

1 During the year 2012-13, Tamilnadu Energy Development Agency (TEDA) had sanctioned and disbursed a Capital Subsidy of Rs. 84 lakhs for the 4.2. MW Captive Power Plant, capitalized during the year 2008-09. These grants are directly credited to Shareholder''s funds under Capital Resrves.

The above deposits represent the amounts received from two entities towards use of treated effluent pipeline as per the agreement entered into with them. These deposits are interest free and are repayable in fifteen equal annual installments commencing from April 2012.

Cash Credit from banks, which is repayable on demand, is secured by hypothecation of inventories, book debts and other receivables, both present and future, and by way of a second charge on the Company''s immovable properties.

The Company had availed Interest-free sales tax loan in prior years, which has been fully settled in the year 2010. The charge created on the immovable and movable assets of the Company has been released with the receipt of ”No Dues Certificate” from Sales Tax department during the year.

Trade payables are dues in respect of goods purchased or services received in the normal course of business.

Others Include:

2. The Company has received an advance of Rs. 277.85 lakhs [Previous year Rs. 277.85 lakhs USD 503, 897 representing 90%] towards subsidy from Ozone Cell, Ministry of Environment and Forests, Government of India for phasing out of HCFC in the production of Polyols. During 2014-15, the Company installed related assets and completed Stage 1 of phasing out of HCFC in all aspects by December 2016; Ozone Cell has appointed an Independent consultant to inspect the facility which is scheduled in May 2017. As at the year end, the advance received as above is grouped under other current liabilities and the related assets capitalized in the books at cost. Upon completion of inspection and on receipt of full grant, the subsidy will be recorded in the books in accordance with the Accounting Standard 12-Accounting for Government Grants.

3. The Company has received a demand for Rs. 1,677 lakh during October 2013, towards lease rent for factory land, provision for which was made in the year 2014-15 and included in the above.

* Provision for Wage Arrears

In 2004, a claim was made against the Company by its workmen, demanding wage revision for the years from 2001 to 2004. This matter was adjudicated by the Industrial Tribunal on October 23, 2008, which was challenged by the Company in the Supreme Court. In October 2015, the employees'' union filed an Interim Application (IA) No. 12 of 2015 in the Supreme court. Upon hearing both sides, the Supreme court gave directions to withdraw the SLP subject to payment Rs.1 lakh to each workman and with liberty to approach Madras High Court and file a Writ Petition within 6 weeks from date of the order i.e. January 8,2016 to get finality in this matter . Accordingly, the Company filed a Writ Petition in Madras High Court in February 2016 and released the interim payment as per direction of the Supreme court.

With the efforts of a Mediator appointed by the High Court , some of the employees signed the “out of court settlement letter” and got settled during the year; In respect of others, with whom mediation was failed, the matter was referred back to High Court. Hence the company continues to provide for the wage arrears till the issue is fully resolved.

*During the year 2012-13, 16,48,000 equity shares of Rs.10 each, fully paid-up, in Mercantile Ventures Limited [formerly MCC Finance Limited (MCC)] were allotted in pursuance of a Scheme of Compromise approved by the Honourable Madras High Court, at a premium of Rs.15 per share towards past dues to the Company as reflected in the books of MCC. Since the Company had recovered the said dues during the years 1999 to 2001 by adjusting the same against dues from a then associate of MCC, an amount equivalent to the above allotment was accounted for as payable to the then associate of MCC in the books of the Company. Pending mutual agreement between the Companies, the amounts shown above and the payable shown under Trade payables have been retained. The shares of this Company has been listed in BSE on 9th February 2015.

** Against the above demands, the Company has paid Rs. 11.71 lakhs (Previous year - Rs. 100 lakhs)

The above amounts are based on the notices of demand or the assessment orders or notifications by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, 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.

c) During the previous year, CESTAT has allowed the Company''s appeal in respect of service tax matters for various years of Rs. 48.90 lakhs. There is a probability that the Department may go on appeal

d) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

4 - There are no overdue amounts payable to Micro, Small & Medium Enterprises [MSME] as on the Balance sheet date or anytime during the year and hence no interest has been paid/payable. 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 - 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 recognized Rs. 96.07 lakhs (year ended 31 March, 2016 - Rs.89.56 lakhs) for Provident Fund contributions and Rs. 32.10 lakhs (year ended 31 March, 2016 - Rs.30.33 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 recognized in the financial statements.

6 - 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 : SIDD Life Sciences Private Limited

Wholly owned Subsidiary: AMCHEM Speciality Chemicals Private Limited (w.e.f. 1st March, 2016)

AMCHEM Speciality Chemicals UK Limited (w.e.f. 15th August, 2016)

Notedome Limited (w.e.f. 1st October, 2016)

Enterprise in which Director is a Partner: CNGSN & Associates, LLP

Key Management Personnel [KMP]: Mr Muthukrishnan Ravi, Managing Director

Enterprise over which Key Management Personnel exercised significant influence: Tamilnadu Petroproducts Limited (upto 3rd February, 2016)

Related Party Transactions:

The Company has identified all related parties and details of transactions are given below:

7 Details on derivative instruments and unheeded 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.

8. Details of operating leasing arrangements - Non cancellable leases

Bulk storage facility at Ennore Port-The lease is 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 agreement provides for an increase in the lease payments by 3% every year.

Storage of polyols at Meerut-The lease is is for a period of 54 months. The lease agreement provides for an increase of 4% every year.

Office premises-The leases is for a period of 9 years. The lease agreement provides for an increase in the lease payments by 15% every 3 years.

9. Insurance claims submitted during the year 2015-16:

During the previous year, the operations of the Company were significantly impacted due to unprecedented rainfall, consequent flooding and power interruptions, for which the Company had made claims with the Insurers towards loss of inventory, damage to Property, Plant & Equipments, loss of production and profits. In December 2016, the Insurance company has settled the claims at Rs.1,522.46 lakhs and paid the balance amount of Rs.622.46 lakhs after adjusting the ad hoc advances paid in this regard. The company has recorded the claim settlement received appropriately.

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

11. The financial statements of Manali Petrochemicals Limited were approved by the Board of Directors at its meeting held on 16 May, 2017


Mar 31, 2016

Notes:

There has been no movement in the Share Capital during the year. The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of the equity shares is entitled to one vote per share. In the event of repayment of Share Capital, the same will be in proportion to the number of equity shares held. For the Year ended 31 March, 2016, the amount of dividend recognized as distributions to equity shareholders is Re.0.50 per share (previous year: Re.0.50 per share). The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

1. During the year 2012-13, Tamilnadu Energy Development Agency [TEDA] had sanctioned and disbursed a Capital Subsidy of Rs.84 lakhs for the 4.2 MW Captive Power Plant, capitalized during the year 2008-09. These grants are directly credited to Shareholders'' funds under Capital Reserves.

2. Transition adjustment amounting to Rs. 25.57 lakhs ( net of taxes of Rs. 13.08 lakhs ) has been adjusted from opening reserves in the previous year.

Cash Credit from banks, which is repayable on demand, is secured by hypothecation of inventories, book debts and other receivables, both present and future, and by way of a second charge on the Company''s immovable properties.

The Company had availed Interest-free sales tax loan in prior years, which has been fully settled in the year 2010. However, the charge created on the immovable properties and the movable assets of the Company has not been released pending receipt of “No Dues Certificate” from Sales Tax department. This is being followed up.

3 - There are no overdue amount payable to Micro, Small & Medium Enterprises [MSME] anytime during the year and hence no interest has been paid/payable. 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- 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 recognized Rs. 89.56 lakhs (year ended 31 March, 2015 - Rs.77.35 lakhs) for Provident Fund contributions and Rs. 30.33 lakhs (year ended 31 March, 2015 - Rs.29.53 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).

5- 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 : SIDD Life Sciences Private Limited

Wholly owned Subsidiary: AMCHEM Specialty Chemicals Private Limited (w.e.f. 1st March, 2016)

Key Management Person [KMP]:

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

Tamilnadu Petro products Limited (up to 3rd February, 2016)

6. 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.

7. Details of operating leasing arrangements - Non cancellable leases

Bulk storage facility at Ennore Port-The lease is 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 agreement provides for an increase in the lease payments by 3% every year.

Storage of polyols at Meerut -The lease is for a period of 54 months. The lease agreement provides for an increase of 4% every year.

Office premises-The leases is for a period of 9 years. The lease agreement provides for an increase in the lease payments by 15% every 3 years.

8. Segment Reporting:

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.

9. Insurance claims submitted during the year:

During December 2015, the operations of the Company were significantly impacted due to unprecedented rainfall, consequent flooding and power interruptions and Plant I and Plant II were shut down for 27 days and 18 days respectively. An adhoc advance of Rs. 600 Lakhs was received during the year and the final assessment is pending. The claim will be recorded in the books, upon completion of assessment by the Insurance company.

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


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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