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Notes to Accounts of Mysore Petro Chemicals Ltd.

Mar 31, 2015

1. Contingent Liabilities not provided for

a) Sales Tax matter under appeal - Case decided in favour of the 23.98 23.98 company which are taken further in appeal by Karnataka State Sales Tax Department.

b) Corporate Guarantees Given. (Amount outstanding). 4,644.58 4,757.12

c) The operations of Phthalic Anhydride Plant at Raichur, Karnataka was closed during 3rd week of April 2013. The Board of Directors of the Company in their meeting held on 4th June 2013 had decided to close the unit permanently due to Economic unavaibility and the unit was closed since 16th July 2013.

The workmen's union have raised certain demands and the matter has been referred to Industrial Tribunal, Hubballi, Karnataka by the Labour Department, Government of Karnataka and the matter is pending. As the matter is subjudice no provision has been made. Future cash out flow of the same are determinable on receipt of judgement / decision.

The employees benefits expense includes amount of Rs. 58.12 lacs (Previous year of Rs. 329.69 lacs) towards settlement to management staff and workmen.

52 workmen have not accepted the dues amounting to Rs. 93.17 lacs (without considering the effect of demand of the union), however provision has been made.

d) Workmen's Union demand of the Company at Taloja with effect from 1st June, 2014 is under negotiation, amount presently not ascertainable.

2. SEGMENT INFORMATION

The Company is mainly engaged in the business of manufacture and sale of chemicals and as the Company is managed organizationally as a united entity with various functional heads reporting to the top management there are no separate reportable segments as per Accounting Standard 17 - Segmental Reporting issued by the Institute of Chartered Accountants of India.

3. RELATED PARTY DISCLOSURE

1. Relationship

(a) Subsidiary Companies Nil

(b) Other related Parties / Associates I G Petrochemicals Limited

(c) Key Management Personnel Mr. M M Dhanuka - Managing Director

Mr.Paras Jain - Chief Financial Officer

Mr. Anand Kadkol - Company Secretary

(d) Relatives of key management Mr. Nikunj Dhanuka - personnel and their enterprises Brother's Son of Managing where transactions have taken place. Director

Mrs. Binadevi Dhanuka - Wife of Managing Director

Mr. Mayank Dhanuka - Son of Managing Director

Mrs. Rajkumari Dhanuka - Brother's wife of Managing Director

Mrs. Neha Dhanuka - Son's wife of Managing Director

Mr. Umang Dhanuka - Brother's Son of Managing Director

4. Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

i. General Description of defined benefit plan Gratuity

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

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

5. Provident Fund

Pending the issuance of Guidance Note from the Actuarial Society of India, the Company's Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at March 31st 2015 and no provision has been made.

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

Outstanding to parties covered under the Micro, Small and Medium Enterprises as per MSMED Act, 2006 have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

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


Mar 31, 2014

1. Contingent Liabilities not provided for

a) Sales Tax matter under appeal - Case 23.98 23.98 decided in favour of the company which are taken further in appeal by Karnataka State Sales Tax Department.

b) Corporate Guarantees Given. (Amount outstanding). 4,757.12 —

c) The operations of Phthalic Anhydride Plant at Raichur, Karnataka was closed during 3rd week of April 2013. The Board of Directors of the Company in their meeting held on 4th June 2013 had decided to close the unit permanently due to Economic unaviability and the unit was closed since 16th July 2013. The workmen''s union have raised certain demands and the matter have been referred to Industrial Tribunal,

Hubbali, Karnataka by the Labour Department, Government of Karnataka and the matter is pending. The employees benefits expense includes payment of Rs. 329.69 Lacs towards settlement made to management staff and few of the workmen, 52 workmen have not accepted the dues amounting to Rs. 93.17 Lacs (without considering the effect of demand of the union), as the matter is subjudiced the provision have not been made for these workmen. Future cash out flow of the same are determinable on receipt of judgement / decision.

2. Segment Information

The Company is mainly engaged in the business of manufacture and sale of chemicals and as the Company is managed organizationally as a united entity with various functional heads reporting to the top management there are no separate reportable segments as per Accounting Standard 17 - Segmental Reporting issued by the Institute of Chartered Accountants of India.

Note: Amount in bracket represents figures for previous year.

*As per contract with I G Petrochemicals Limited , certain exchange transaction of services / goods mutually beneficial have been entered into which have not been quantified above.

3. Employee Benefits

i. General Description of defined benefit plan

Gratuity

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

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

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

4. Provident Fund

Pending issuance of Guidance Note from the Actuarial Society of India, the Company''s Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at March 31st 2014 and no provision has been made.

5. Research & Development

Research & Development Expenditure of Rs. 3.01 Lacs (Previous Year Rs. 11.53 Lacs) have been accounted for in the respective heads of the Statement of Profit and Loss.

6. Previous Year Comparatives

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


Mar 31, 2013

NOTE - 1 : CONTINGENT LIABILITIES Contingent Liabilities not provided for

a) Bill of Exchange Discounted - Others — 108.56

b) Sales Tax matter under appeal - Case decided in favour of the 23.98 23.98 company which are taken further in appeal by Karnataka State Sales Tax Department.

NOTE - 2 : SEGMENT INFORMATION

The Company is mainly engaged in the business of manufacture and sale of chemicals and as the Company is managed organizationally as a united entity with various functional heads reporting to the top management there are no separate reportable segments as per Accounting Standard 17 - Segmental Reporting issued by the Institute of Chartered Accountants of India.

NOTE - 3 : EMPLOYEE BENEFITS

i. General Description of defned beneft plan

Gratuity

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

The following tables summarise the components of net beneft expense recognized in the Statement of Proft and Loss and the funded status and amounts recognized in the balance sheet.

Provident Fund

Pending issuance of Guidance Note from the Actuarial Society of India, the Company''s Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no defcit in the fund as at March 31st 2013 and no provision has been made.

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

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

NOTE - 4 : RESEARCH & DEVELOPMENT

Research & Development Expenditure of Rs. 11.53 Lacs (Previous Year Rs. 10.29 Lacs) have been accounted for in the respective heads of the Statement of Proft and Loss.

NOTE - 5 : PREVIOUS YEAR COMPARATIVES

Previous year''s fgures have been regrouped / reclassifed wherever necessary to correspond with the current year''s classifcation / disclosure.


Mar 31, 2012

Contingent Liabilities not provided for



a) Bill of Exchange Discounted - Others 108.56 52.84

b) Sales Tax matter under appeal - Case decided in favour of the 23.98 23.98 company which are taken further in appeal by Karnataka State Sales Tax Department.

c) Workmen's Union Demands at Maleic Anhydride Unit of the Company at Taloja with effect from 1st June 2011 is under negotiation, amount presently not ascertainable.

The Company is mainly engaged in the business of manufacture and sale of chemicals*and as the Company is managed organizationally as a united entity with various functional heads reporting to the top management there are no separate reportable segments as per Accounting Standard 17 - Segmental Reporting issued by the Institute of Chartered Accountants of India.

The Company announced a Voluntary Separation Scheme (VSS) for the employees of one of the units during the year. A sum of Rs 43.26 Lacs (Previous Year Rs Nil) has been paid during the year and debited to Statement of Profit and Loss under the head "Employee Benefits Expense.

i. General Description of defined benefit plan Gratuity

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

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

Research & Development Expenditure of Rs.10.29 Lacs (Previous Year Rs.8.17 Lacs) have been accounted for in the respective heads of the Profit and Loss Account.

The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly changed the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2010

1. Secured Loan

a. Working Capital Facility by The Saraswat Co-operative Bank Ltd, a Scheduled Bank, is secured against Hypothecation of all movable properties of the Company including stocks and book debts of the company. The facility is further secured by collateral security of Equitable Mortgage of Land & Building at Raichur & Taloja and personal Guarantee by two Directors of the Company.

b. Factoring facility is secured by respective Book debts and personal guarantee by two Directors of the Company.

c. Hire Purchase loans are secured by the assets acquired through such loans.

2. The Company had obtained a legal opinion from an eminent legal counsel stating that privately placed debentures cannot be construed to be "Debentures" for the purpose of Clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

3. Stock in process includes Process / Production / Store Scrap materials Rs. 6965 Thousand (Previous Year Rs.5617 Thousand ) valued at estimated realizable value.

4. Research & Development Expenditure of Rs. 696 Thousand (Previous Year Rs.649 Thousand) have been accounted for in the respective heads of the Proft and Loss Account.

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

6. Segment Information

The Company is mainly engaged in the business of manufacture and sale of chemicals and as the Company is managed organizationally as a unifed entity with various functional heads reporting to the top management there are no separate reportable segments as per Accounting Standard 17 - Segmental Reporting issued by the Institute of Chartered Accountants of India.

7. Related parties disclosures

1. Relationships

(a) Subsidiary Companies : Nil

(b) Other related Parties / Associates : I G Petrochemicals Limited

Bihariji Construction (I) Limited

(c) Key Management Personnel : Mr. M. M. Dhanuka - Managing Director

(d) Relatives of key management Nil personnel and their enterprises where transactions have taken place.

Note: Related party relationship is as identifed by the Company and relied upon by the Auditors.

8. Provisions and Contingencies Contingent Liabilities not provided for

a) Sales Tax Matter under appeal Rs.2398 Thousand (Previous Year Rs.2398 Thousand). Case decided in favour of the Company which are taken further in appeal by Karnataka State Sales Tax Department.

b) Bill of Exchange discounted with others Rs.8228 Thousand (Previous Year Rs.Nil)

c) Custom duties on raw materials under Advance Licence pending export obligation Rs. Nil (Previous Year Rs.203 Thousand)

d) Workmans Union Demands at Phthalic Anhydride Unit at Raichur with effect from 1st January 2010 is under negotiation , amount presently not ascertainable.

9. Employee Benefits

i. General Description of defined benefit plan

Gratuity

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

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

10. Fixed Deposits of Rs.13380 Thousand (Previous Year Rs.13493 Thousand) have been lodged with Banks and Rs.15 Thousand (Previous Year Rs.15 Thousand) with Government Departments as a security.

11. Previous Year Comparatives

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

 
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