Enter the first few characters of Company and click 'Go'

Notes to Accounts of Tamilnadu Petroproducts Ltd.

Mar 31, 2023

i) The company in its efforts to augment capacity of Linear Alkyl Benzene plant from its existing 120 KTA to 145 KTA and modernised existing CS Lye facility has incurred a sum of '' 3,504.36 lakhs as of March 2023 (31^st March 2022: '' 2,211.41 lakhs) and capital advance of '' 439.89 lakhs (31^st March 2022: Nil)

ii) CPP is convertered from FO engine to Gas based engine and amount of '' 6468.98 lakhs (31^st March 2022: '' 4.73 lakhs) has already been incurred towards this.

iii) During the year, the Honourable HC of Madras, while disposing the common writ petitions by various land owners including TPL ( in respect of its land of 18 acres in Manali), in its order dated 19.9.2022 quashed the decision to take over such lands from the owners under the Urban Land Ceiling Act, 1972, on grounds that the Act itself having being repealed in 1999. Accordingly, the Companyâs unencumbered title to the land is establishedâ.

13.01 In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 126 of the Companies Act, 2013.

13.02 There has been no movement in the Share Capital during the period. The Company has only one class of equity shares having a par value of f10 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.

(B) Nature and purpose of reserves

a. General Reserve: This Reserve is created by an appropriation from one component of equity generally surplus in statement of Profit and Loss (Retained Earnings) to another, not being an item of Other Comprehensive Income. The same can be utilized in accordance with the provisions of the Companies Act, 2013.

b. Securities Premium: This Reserve represents the premium on issue of shares in earlier years and can be utilized in accordance with the provisions of the Companies Act, 2013.

c. Surplus in Statement of Profit and Loss: Surplus in Statement of Profit and Loss are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholder

d. Items of Other Comprehensive Income - Remeasurements of Net Defined Benefit Plans

It represent different between actuarial assumption on interest income on Plan asset and actuals, besides movement in plan liabilities due to changes in actuarial assumptions including experience adjustments.

a) The above includes f 850.32 lakhs of future lease commitment in respect of lease hold land from Government of Tamilnadu estimated on the basis of increase in guideline value (as indicated in the earlier lease agreement which expired as at 12^th June 2020) accounted in compliance with Ind AS 116 - Leases, pending approval of application for renewal of lease submitted by the Company.

i) Working capital loans are secured by hypothecation of inventories both at factory and in transit, book debts and other receivables, both present and future. This are further secured by way of mortgage by deposit of title deeds of immovable properties, both present and future, on second charge basis ranking pari passu amongst them.

ii) The above loans carry varying rates of interests with the maximum rate of interest being 10.55% (As at 31^st March 2022: 10.65%) per annum. The weighted average rate of interest of these loans is 9.22% (2021-22: 9.66%) per annum.

iii) Other short tem advances against deposits are obtained for workings capital purpose which carry rate of interests being 6.30%.

a) The above includes f 13.51 lakhs of future lease commitment in respect of lease hold land from Government of Tamilnadu estimated on the basis of increase in guideline value (as indicated in the earlier lease agreement which expired as at 12^th June 2020) accounted in compliance with Ind AS 116 - Leases, pending approval of application for renewal of lease submitted by the Company.

34. Employee benefit plans a) Defined contribution plans

The Company makes Provident fund contributions to defined contribution plans for qualifying employees. Under this scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable by the Company to these plans are at the rates specified in the rules of the schemes.

b) Defined benefit plans

The Company has a funded Gratuity Scheme for its employees and gratuity liability has been provided based on the actuarial valuation carried out at the year end. The Gratuity scheme of the Company is funded with the Life Insurance Corporation of India.

Demands disputed by the Company and appeals filed against these disputed demands are pending before respective appellate authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Companyâs rights for future appeals. v) Cross Subsidy Charge under Group Captive Scheme 444.95 6,130.48

The demand from TANGEDCO for f 61.30 crores towards cross subsidy surcharge for alleged non-compliance under Rule 3 of the Electricity Rules, 2005 during the period 2014-15 to 2016-17 in respect of the Companyâs participation in Group Captive Scheme for procurement of power from private power producers is unlikely to fructify in the wake of one such private power producer having established compliance under the above said Rules as communicated by TANGEDCO vide their letter dated 13.05.2022 and thereby qualifying to be categorized as captive generating plant. TANGEDCOâs response to the Companyâs representation for withdrawal of the above said demand for reasons stated above is awaited

C. Lease arrangements with the Government of Tamilnadu

The agreement entered with the Government of Tamilnadu in respect of leasehold land on which Propylene Oxide plant is operating expired on 12^th June 2020. Application for renewal of the lease for further period has been filed with the relevant authorities. In the meanwhile, the Company received a demand for payment of arrears of lease rent for the period 1^st July 1990- 30^th June 2020 to the tune of f 9,224.33 lakhs from the Vattachiyer, Tiruvottiyur, Despite representation made by the company in this regard, in the absence of any response from the authorities as to the basis on which the above demand was

raised, the management is of the view that the demand is arbitrary and devoid of any merit. The Company continues to make payment of the lease rent at contracted rates as per the earlier agreement with Government of Tamilnadu, in terms of the extant Government guidelines for lease of land for industrial purposes. Pending execution of the renewed lease agreement from 13^th June 2020, the company has recognised Right of use of Assets (ROUA) on the indicative increase in lease rentals for a period of 30 years.

37. The Chief Operating Decision Maker (CODM) has considered manufacturing of industrial intermediate chemicals as the single operating segment as defined in Ind AS 108- Operating Segments.,

38. Financial instruments

(i) Capital management

For the purpose of the Companyâs capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Companyâs objective when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide return for shareholders and benefits for other stakeholders and

- Maintain an optimal capital structure to reduce the weighted average cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders, return capital to shareholders, issue new shares, or sell non-core assets to reduce the debt.

The Companyâs risk management is governed by policies monitored by Risk Management Committee, a sub-committee of the Board and as well approved by the Board of Directors Companyâs treasury identifies, evaluates and hedges financial risks in close co-ordination with the Companyâs operating units. The board provides written principles for overall risk management, as well as policies covering areas such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity in short term Fixed Deposits / Mutual debt funds.

a. Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

a(i) Trade receivables

Customer credit risk is managed by each business unit under the guidance of the credit policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on financial position, past performance, business/economic conditions, market reputation, expected business etc. Based on this evaluation, credit limit and credit terms are decided. Exposure on customer receivables are regularly monitored and managed through credit lock and release. Further where required the company obtains bank guarantee as security for goods sold.

a(ii) Financial Instruments and cash deposits

The Company has no exposure to credit risk relating to these cash deposits as at: 31^st March 2023.

b. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and deposits.

Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management of the Companyâs exposure to market risks .

b(i) Foreign currency risk management

b(ii) Interest rate risk management

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has been availing the borrowings on a fixed and variable rate of interest. These borrowings are carried at amortised cost. The borrowings on a fixed rate of interest basis are not subject to the interest rate risk as defined in Ind AS 107, since neither the carrying amount not future cash flows will fluctuate because of change in market interest rates. The borrowings on a variable rate of interest are subject to interest rate risk as defined in Ind AS 107. The Company at the end of March 2023, does not carry any loans with variable interest.

c. Liquidity risk management

Liquidity Risk refers to the risk that the company cannot meets its financial obligation, the objective of the liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The company consistently generated sufficient cash flows from operations to meet its financial obligation including lease liabilities as and when they fall due.

42. Additional Regulatory Information required under Schedule III of Companies Act 2013

There are no transactions during the year in respect of following disclosure requirements under amended Schedule III:

(a) Crypto Currency or Virtual Currency

(b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

(d) Relating to borrowed funds:

i. Wilful defaulter

ii. Utilisation of borrowed funds & share premium

iii. Borrowings obtained on the basis of security of current assets

iv. Discrepancy in utilisation of borrowings

v. Current maturity of long-term borrowings

43. Additional Regulatory Information required under Schedule III of Companies Act 2013

During the year, the Companyâs wholly owned subsidiary, Certus Investment and Trading Ltd Mauritius, out of the Funds invested by Company in earlier years, extended loans aggregating to USD 2,500,000 to its subsidiary Certus Investment and Trading Pte Ltd Singapore, who in turn had extended unsecured loans to the extent of USD 17,500,000( including the amount received earlier from its parent) to third parties. These loans were extended at armâs length interest rates.

45. Events after the reporting period

The Board of Directors have recommended a dividend of f 1.50/- per share 15 (%) on 8,99,71,474 equity shares of f10/- each for the Financial Year 2022-23 subject to approval of Members at the Annual General Meeting.

46. Approval of financial statements

The financial statements were reviewed and recommended by the Audit Committee and approved by the Board of Directors at the meeting held on 23^rd May, 2023.

47. Previous Yearâs figures

Previous yearâs figures have regrouped wherever necessary to correspond with the current yearâs disclosure.

Mar 31, 2018

1. General Information:

Tamilnadu Petroproducts Limited (âTPLâ or âthe Companyâ) is a Public Limited Company incorporated and domiciled in India, jointly promoted by Southern Petrochemicals Industries Corporation Limited (SPIC) and Tamilnadu Industrial Development Corporation Limited (TIDCO) and listed with National Stock Exchange of India Ltd (NSE) and Bombay Stock Exchange Ltd.(BSE). The registered office of the Company is situated at Chennai, Tamilnadu India.

The Company is primarily engaged in the manufacturing and sale of petrochemical products viz., Linear Alkyl Benzene (LAB), Caustic Soda, Chlorine and its derivatives at its facilities situated at Manali, Chennai.

The financial statements were authorized for issuance by the Companyâs Board of Directors on 14^th May 2018.

(a) Adoption of Transitional provisions

In accordance with Ind AS transitional provisions, the Company has opted to consider previous GAAP carrying value of property, plant and equipment as deemed cost as on the transition date i.e. 01^st April 2016. The following table provides the value of gross block and the carrying value considered in previous GAAP as on 01^st April 2016.

(b) Includes Rs. 119.01 lakhs being cost of building on leasehold land

Fixed assets of the company carry pari-passu second charge in favour of the multiple bankers, as security for working capital facility availed

(d) Contractual obligations

Contractual commitments for the acquisition of property, plant and equipment Rs. 833.42 lakh

a) In respect of investment in Standard Motor Products of India Limited of 40,00,000 Equity Shares of Rs. 10 each at a cost Rs. 400 Lakhs, both the cost and provision for diminution in value were reversed as at 1.4.2016 in view of the fact that the company was wound up.

b) Provision for diminution in value of investment in subsidiary Rs. 1978.11 lakhs was reversed adopting cost model as prescribed under Ind AS 101.

a) Trade receivables are generally due between 0 to 30 days. The Companyâs terms of sale include charging of interest for delayed payment beyond agreed credit days. However, the Company charges interest after considering the historical trend, business prospects, reason for delay, market conditions etc.

b) The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on provision matrix which takes into account the historical credit loss experience adjusted for forward looking information.

c) Concentration of revenues from two customers of the Company was 60% & 55% of total revenue for the year ended 31^st March, 2018 and 31^st March, 2017 respectively.

2.01 In December 1993, the Company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 126 of the Companies Act, 2013.

2.02 There has been no movement in the Share Capital during the period. The Company has only one class of equity shares having a par value of Rs. 10 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.

2.03 Dividend of Rs. 0.50 per share is proposed for the year ended 31^st March 2018. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, upon which the liability will be recorded in the books.

Working capital loans are secured by hypothecation of inventories both on hand and in transit, book debts and other receivables, both present and future and further secured by way of mortgage by deposit of title deeds of immovable properties, both present and future, on second charge basis ranking pari passu amongst multiple bankers.

The above loans carry varying rates of interests with the maximum rate of interest being 15.10% (As at 31^st March 2017: 15.10% and as at 1^st April 2016: 15.70%) per annum. The weighted average rate of interest of these loans is 12.86% (2016-17: 14.09%) per annum.

The Tamilnadu Government vide Government Order dated 23^rd September 1996 exempted specified industries permanently from payment of electricity tax on consumption of self -generated electrical energy under the âTamilnadu Electricity (Taxation on Consumption) Act, 1962â.

The above Act was repealed by the âTamilnadu Tax on Consumption or Sale of Electricity Act, 2003â, withdrawing the exemption granted to specified industries.

The Companyâs appeal against the withdrawal of exemption was dismissed by the Madras High Court and the Company filed a âSpecial Leave Petitionâ (SLP) before the Supreme Court. On 15^th May 2007 the Supreme Court held that the 2003 Act was not valid in respect of industries which were permanently exempted from payment of tax.

In November 2007, the Government of Tamilnadu passed âthe Tamilnadu Tax on Consumption or Sale of Electricity Amendment Actâ amending the 2003 Act to invalidate the exemption granted with retrospective effect. The writ petitions filed before the division bench of the High Court against this amendment were dismissed by its Order dated 15.06.2012.

The Company has filed a SLP before the Supreme Court in October 2012 challenging the High Court Order and is hopeful of a favourable decision by Supreme Court especially on invalidation of the exemption granted with retrospective effect. Accordingly, no provision is considered necessary for the electricity tax relating to the period from 2003 to 2008 aggregating to Rs. 1054.93 lakhs. However, provision has been made for this liability for subsequent periods excluding the periods for which specific exemption were granted through notifications.

The Company has invested in various power generating companies under Group Captive Schemes governed by individual power purchase agreements with the private power producers. As per the covenants of the Group Captive Scheme introduced by Government of India, Ministry of Power in exercise of its power under Section 176 of the Electricity Act, 2003, captive users are required to hold collectively not less than 26% of the share capital in the generating units and consume not less than 51% of the power generated on an annual basis. Non compliance with either of the conditions above shall attract cross subsidy charges at applicable rates for power consumed form various class of power sources. The Company has received a demand from Tamilnadu Electricity Board (TNEB) for Rs. 61.30 crores in respect of power purchased by the company under Group Captive Scheme during the years 2014-15 to 2016-17, alleging non compliance with covenants during the entire period mentioned above, even though such non compliance was for a limited period in 2015-16 due to disrupted operations during December 2015 floods. As per management estimates no liability is likely to accrue to the company in this regard as a writ petition has been filed by the private power producers before the Honourable High Court of Madras, challenging levy of cross subsidy, which is expected to be disposed off in favour of the power producers.

The Company does expect any reimbursement in respect of above contingent liabilities.

Notes:

i) Income tax matters:

In respect of Assessment year 2001-02, Income Tax Appellate Tribunal upheld the reopening and reassessment by the department and remanded the case for fresh assessment on merit basis. Consequent to this, during the year 2016-17,the company made a provision towards the tax demand of Rs. 2,464.48 lakhs and interest demand of Rs. 2,549.59 lakhs based on prudence. The Company has filed further appeal before the Honourable High Court of Madras challenging the order of ITAT in this regard.

ii) Renewable Energy Purchase Obligation (RPO):

The Company has disputed the obligation under the âTamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligation) (Amendment) Regulations, 2011â under Gazette notification TNERC/RPO/19/2 dated 29^th July 2011 and filed a Writ Petition in March 2012 before the Honourable Madras High Court. On 26^th March 2012, an interim stay was granted by the Honourable Madras High Court on the operation of the Regulations. In view of developments elsewhere in the country on similar matter and as advised by the legal counsel, the Company has provided for the above liability during the year.

iii) Excise duty:

a) Consequent to the commencement of assessment proceedings by the Principal Commissioner CE&ST in response to Supreme Courtâs order dated 11.8.2015 in the matter, a sum of Rs. 499.36 Lakhs representing excise duty differential on sale of products to a related party and interest thereon has been provided for during the year.

b) Cenvat Credit availed on certain capital goods disallowed by the Principal commissioner of CE&ST, appealed before Commissioner (Appeals) by the Company, a sum of Rs. 231.55 Lakhs has been provided for as advised by the legal counsel in the light of unsustainability of appeals in this regard.

iv) Electricity Cess:

This relates to Electricity Tax on consumption of self generated power by the Company for the period 2011 to 2012. The exemption granted by TNEB for self generation was not applicable to the above period and hence the tax relating to that period amounting to Rs. 132.99 lakhs was provided.

v) Electricity Cross subsidy charges:

TNEB levied cross subsidy charge on third party power purchases by the Company during the year 2012. Company challenged the same before Honourable Madras High Court and stay was obtained. However, TNEB has gone on appeal before Supreme Court. Based on current developments and legal counsel opinion, a sum of Rs. 226.71 lakhs (including interest of Rs. 71.68 lakhs) has been provided during the year.

vi) Open Space Reservation Charges

This relates to demand from Chennai Metropolitan Development Authority towards non compliance of Open Space Reservation in the construction of factory buildings in the Petro Araldite Project , a Joint Venture between the Company and Vantico Performance & Polymers P Ltd. Upon termination of the JV agreement, the assets were taken over by the company. In view of the non compliance mentioned above the demand has been provided for without prejudice to the companyâs appeal for reconsideration of guideline value adopted for arriving at the quantum of demand.

vii) Others: Represents Lease rental demand charges from Revenue Authorities for years 2006-07 and 2007-08 under dispute. The Company does not expect any reimbursement in respect of above Provision for Contingencies.

3A. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

Principal amount remaining unpaid to suppliers is Rs. 49.14 lakhs (Refer Note: 20) Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company. There were no overdue amounts / interest payable to Micro and small enterprises as per Micro, Small and Medium Enterprises Development Act, 2006 as at the Balance Sheet date or any time during the year.

4 Employee benefit plans

a) Defined contribution plans

b) Defined benefit plans

The details of actuarial valuation in respect of Gratuity are as given below:

5. Details on derivative instruments and unhedged foreign currency exposures

(i) Outstanding forward exchange contracts entered into by the Company as on 31 March, 2018: NIL

II. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

6. The Company received Rs. 922.46 Lakh during the current financial year from the Insurers as final settlement against claims made towards material damage and business interruption owing to unprecedented rainfall and consequent floods during December 2015 and January 2016. The same have been disclosed as Exceptional Item.

7. The Chief Operating Decision Maker (CODM) has considered manufacturing of industrial intermediate chemicals as the single operating segment of operation.

8. The company does not own any non current assets outside lndia as specified under Para 33(b) of Ind AS 108.

9. Financial instruments

(i) Capital management

The Companyâs objective when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide return for shareholders and benefits for other stakeholders and

- Maintain an optimal capital structure to reduce the weighted average cost of capital

(ii) Loan covenants

No covenants are applicable as of March 2018 since there were no term loans outstanding.

Categories of financial instruments

(iii) Financial risk management objectives

The Companyâs activities expose it to market risk, liquidity risk and credit risk. The table given below explains the sources of risk which the entity is exposed to and how the entity manages the risk.

The Companyâs risk management is governed by policies monitored by Risk Management Committee, a sub-committee of the Board and as well approved by the Board of Directors. Companyâs treasury identifies, evaluates and hedges financial risks in close co-ordination with the Companyâs operating units. The board provides written principles for overall risk management, as well as policies covering areas such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity in short term Fixed Deposits / Mutual debt funds.

a. Credit Risk

a(i) Trade receivables

The impairment is based on expected credit loss model considering the historical data and financial position of individual customer at each reporting period. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note: 8. The Company does not hold any collateral as security.

a(ii) Financial Instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs policy. Investments of surplus funds are made for short-term and liquid funds of rated mutual funds and deposits with banks. The Investment limits are set out per Mutual fund and the value of total fixed deposit in Banks to minimise the concentration risk. Investments are reviewed by the Board of Directors on a quarterly basis.

The Company has no exposure to credit risk relating to these cash deposits as at: 31^st March 2018, 31^st March 2017 and 1^st April 2016 b Market Risk

Market risk exposures are measured using sensitivity analysis. There has been no change in the measurement and management of the Companyâs exposure to market risks.

b(i) Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign exchange rate exposures are managed within policy parameters approved by Board of Directors. The Company manages its foreign currency risk by hedging transactions that are expected to occur within a maximum of 12 month period of forecasted receipts and payments. When a derivative is entered into for the purpose of hedging, the Company negotiates the terms of those derivatives to match with the terms of the hedged exposure. The Company hedges around 50% of the net material exposure by currency. Exposures relating to capital expenditure beyond a threshold are hedged as per Company policy at the time of commitment.

b(ii) Interest rate risk management

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has been availing the borrowings on a fixed and variable rate of interest. These borrowings are carried at amortised cost. The borrowings on a fixed rate of interest basis are not subject to the interest rate risk as defined in Ind AS 107, since neither the carrying amount not future cash flows will fluctuate because of change in market interest rates. The borrowings on a variable rate of interest are subject to interest rate risk as defined in Ind AS 107. The Company at the end of March 2017, does not carry any loans with variable interest.

10 Related Party Disclosure

i) The list of related parties as identified by the management for disclosure as under

A) Joint Venturers 1. Southern Petrochemical Industries Corporation Limited (SPIC)

2. Tamilnadu Industrial Development Corporation Limited (TIDCO)

B) Subsidiaries 1. Certus Investment and Trading Limited (CITL), Mauritius

2. Certus Investment and Trading (S) Private Limited, Singapore

3. Proteus Petrochemicals Private Limited, Singapore

C) Associates of Joint Venturer 1. Manali Petrochemicals limited (MPL)

2. Tuticorin Alkali Chemicals and Fertilizers Ltd., (TAC)

3. AMCHEM Speciality chemical Pvt. Ltd.

D) Post Employment Benefit plans 1. TPL Employees Provident Fund Trust

2. HCD Employees Provident Fund Trust

E) Key Management Personnel 1. Mr. KT Vijayagopal, Whole Time Director (Finance) & CFO

2. Mr. D Senthikumar, Whole Time Director (Operations)

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

Transactions with related parties in the nature of sale of goods, rendering of service, purchase of goods, procurement of service are at armâs length price.

Figures in brackets relate to previous year.

11. First Time Adoption of Ind AS.

These financial statements, for the year ended 31^st March 2018, are the first financial statements the Company prepared in accordance with Ind AS. For periods up to and including the year ended 31^st March 2017, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with relevant Rules made there under ( âPrevious GAAPâ).

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

(i) Transition election

(a) Optional exemptions

The Company in applying Ind AS principle for measurement of recognised assets and liabilities is subject to certain optional exemptions, apart from mandatory exceptions, availed by the Company as detailed below.

I. Deemed Cost for property, plant and equipment, investment property, and intangible assets:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant & equipment at their previous GAAP carrying value as on the transition date.

II. Investments in subsidiaries in separate financial statements

According to Ind AS 27, when an entity prepares separate financial statements, it is required to account for its investments in subsidiaries either:

(a) at cost; or (b) in accordance with Ind AS 109.

Under the transitional provision set out in Ind AS 101, the first-time adopter can measure such an investment at cost in accordance with Ind AS 27, it shall measure that investment at one of the following methods in its separate opening Ind AS Balance Sheet:

(a) cost determined in accordance with Ind AS 27; or

(b) deemed cost.

The deemed cost of such an investment shall be its:

(i) fair value at the entityâs date of transition to Ind AS in its separate financial statements; or

(ii) previous GAAP carrying amount at that date.

A first-time adopter may choose either (i) or (ii) above to measure its investment in each subsidiary that it elects to measure using a deemed cost.

The Company has adopted Cost model as prescribed under para D15 in Ind AS 101 - First Time Adoption of Indian Accounting Standards.

III. Business combinations

In accordance with Ind AS transitional provisions, the Company has elected to apply Ind AS relating to business combinations prospectively from April 01, 2016. As such, previous GAAP balances relating to business combinations entered into before that date, have been carried forward without adjustment.

IV. Fair value measurement of financial assets or financial liabilities at initial recognition

In accordance with Ind AS transitional provisions, the Company opted to apply the provisions of day one gain or loss provisions retrospectively on transactions occurring on or after the date of transition to Ind AS.

I Estimates

An entityâs estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

(i) Impairment of financial assets based on expected credit loss model

II. Derecognition of Financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the derecognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 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 derecognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

III. Classification and measurement of Financial assets

Ind AS 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 Ind AS.

IV. Impairment of Financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 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.

Deposit of Rs. 59.02 lakhs reclassified from other deposits to cash and cash equivalents on transition.

Foot Notes:

1 Under Ind AS remeasurement in defined benefit plans are recognised in other comprehensive income. Under previous GAAP such remeasurements (actuarial gains and losses) were recognised in the statement of profit and loss.

2 Reversal of Provision for diminution in value of investment in subsidiary, on adoption of cost model under para D15 of Appendix D to Ind AS 101- First Time Adoption of Ind AS.

3 Measurement of Equity Investment under Group Captive Scheme at fair value through profit or loss under Ind AS 109-Financial Instruments.

12. The Company has leased land and warehouse under operating lease agreements that are renewable on a periodic basis.

Rental expense under this lease is Rs. 84.98 lakhs for the year ended 31^st March 2018 and Rs. 78.61 lakhs for the year ended 31^st March 2017.

Future Minimum Rentals Payable under non-cancellable operating leases are as follows:

13. Events after the reporting period

The Board of Directors have recommended a dividend of Rs. 0.50 per share (5%) on 8,99,71,474 equity shares of Rs. 10/- each for Financial Year 2017-18 subject to approval of Members at the Annual General Meeting.

14. Approval of financial statements

The financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors in their meeting held on 14^th May, 2018.

Mar 31, 2017

1 In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 126 of the Companies Act, 2013.

2 There has been no movement in equity share capital during the year.

3. Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- . Each holder is entitled to one vote per equity share.

The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting.

The Board of Directors have recommended a dividend of Rs. NIL Per Share for the current year (previous year Rs. NIL Per Share). Repayment of capital will be in proportion to the number of equity shares held.

4 Related Party Disclosure under Accounting Standard -18

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

A) Promoters 1. Southern Petrochemical Industries Corporation Limited (SPIC)

2. Tamilnadu Industrial Development Corporation Limited (TIDCO)

B) Subsidiaries 1. Certus Investment and Trading Limited (CITL), Mauritius

2. Certus Investment and Trading (S) Private Limited, Singapore

3. Proteus Petrochemicals Private Limited, Singapore (formerly TPL India Singapore Private Limited).

C) Key management KT Vijayagopal, Whole Time Director (Finance) & CFO ^personnel D. Senthikumar, Whole Time Director (Operations)

5. Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 there are no overdue amounts payable anytime during the year to them. Hence, no interest during the year has been paid or payable under the terms of the Act. Such parties are as identified by the management and relied upon by the auditors.

6. Details on derivative instruments and unheeded foreign currency exposures

I. The following derivative positions are open as at 31 March, 2017. These transactions have been undertaken to act as economic hedges for the Companyâs exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Notes 2(IX) and 2(XIX).

(a) Forward exchange contracts (being derivative instruments), 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. During December 2015 and January 2016, the operations of the Company were significantly impacted due to unprecedented rainfall, consequent flooding and power interruptions. LAB and HCD Plants were shut down for 55 days and 44 days respectively. The company filed claims with insurers in respect of which the surveyor has submitted his report and the insurance company is in the process of finalizing the claim. Pending finalization and approval of the claim by the insurer, the company has recognized the claim to the extent of the actual amount received of Rs. 2,500 lakhs till 31^st March 2017 and the same has been disclosed as an exceptional item.

8. The performance of Chlor Alkali Division (CAD) tapered considerably due to various extraneous factors since 2012. Though the demand for Caustic soda, the main product of the division has been constant , the profitability was greatly affected consequent to high cost of power and salt, the main raw materials. The management has been taking necessary steps to reduce the high cost of power. Based on the estimated future revenues that would be generated by CAD and also based on valuation report of the Plant by an Independent Chartered Engineers dated April 1,2015 , the management has assessed and concluded that the recoverable value, as defined in the Accounting Standard 28, of the Plant is higher than the carrying value of Rs.4,348.15 lakhs (excluding land cost) as on the balance sheet date; Further the operations of the company has considerably improved in the current year with a growth in revenue by 38% and reduction in Net loss percentage on revenue by 35%; based on the cumulative assessment of all the factors as above, no provision for impairment is considered necessary by the company.

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

10. The financial statements of Tamilnadu Petro products Limited were approved by Board of Directors in their meeting held on May 16, 2017.

Mar 31, 2016

1. In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 126 of the Companies Act, 2013.

2. Details of Shareholders holding more than 5% shares in the Company

3. There has been no movement in equity share capital during the year.

4. Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- . Each holder is entitled to one vote per equity share.

Repayment of capital will be in proportion to the number of equity shares held.

5. The Company sold 1,368,000 shares held in Petro Araldite Private Limited of Rs. 13,680,000 to the joint venture partner Huntsman International (India) Private Limited for a total consideration of Rs 1000 pursuant to termination of joint venture agreement on 2^nd November, 2015

6. Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 there are no overdue amounts payable anytime during the year to them. Hence, no interest during the year has been paid or payable under the terms of the Act. Such parties are as identified by the management and relied upon by the auditors.

There are no derivative contracts outstanding at the end of the year Figures in brackets are in respect of previous year

7. The Company suspended the operations of Epichlorohydrin (ECH) Plant from April 2013 owing to continuous losses. Management has decided to effectively utilize the existing facility to manufacture Propylene Oxide (PO), after making necessary modifications. As at the balance sheet date, Environment Clearance from the Ministry of Environment and Forests has been obtained and Consent to Establish is awaited for the proposed project. Based on a technical evaluation, certain machineries with net book value of Rs. 849 lakhs was identified as not usable in PO production and hence were written down in the books of accounts.

8. Employee benefits expense includes an amount of Rs.248.83 lakhs towards compensation paid to the employees who had opted for early retirement from service (ERS) during the year.

9. Other payables represent amount received in advance towards sale of 100000 equity shares in SEPC Power (Private) Limited during Financial year 2012-13. The same will get adjusted against Investment held, on successful implementation of the power project by SEPC Power (Private) Limited.

10. Employee Defined Benefit Plans

The Company offers Gratuity benefits to its employees which are funded with Life Insurance Corporation of India. The following table sets out the funded status of the Gratuity scheme and the amount recognized in the financial statements.

A) Basis used to determine expected rate of return.

The information on major categories of plan assets and expected return on each class of plan assets have not been furnished in the absence of necessary information from Life Insurance Corporation of India.

B) Estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotions and other factors.

C) In the absence of relevant information from the actuary, the above details do not include the experience adjustment in respect of actuarial losses/gains.

11. The Company operates in only one segment, namely, Industrial Intermediate Chemicals. Details of secondary segment information are disclosed in the consolidated financial statements.

12. During December 2015 and January 2016, the operations of the Company was significantly impacted due to unprecedented rainfall, consequent flooding and power interruptions and LAB and HCD Plants were shut down for 55 days and 44 days respectively. An ad hoc advance of Rs. 2,100 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.

13. The performance of Chlor Alkali Division (CAD) tapered considerably due to various extraneous factors since 2012. Though the demand for Caustic soda, the main product of the division has been constant, the profitability was greatly affected consequent to high cost of power and salt, the main raw materials. The management has been taking necessary steps to reduce the high cost of power. Based on the estimated future revenues that would be generated by CAD and also based on valuation of the Plant by an Independent Chartered Engineers in the previous year, the management has assessed and concluded that the recoverable value, as defined in the Accounting Standard 28, of the Plant is higher than the carrying value of Rs.4,752.23 lakhs (excluding land cost) as on the balance sheet date and hence no provision for impairment is considered necessary.

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

Mar 31, 2015

1. Corporate information

Tamilnadu Petroproducts Limited (TPL) was incorporated in 1984 as a public limited Company and is jointly promoted by Southern Petrochemicals Industries Corporation Limited (SPIC) and Tamilnadu Industrial Development Corporation Limited (TIDCO). Its shares are listed on two stock exchanges in India, viz. National Stock Exchange of India and Bombay Stock Exchange Ltd. The Company is currently engaged in the manufacturing and selling of petrochemical products namely Linear Alkyl Benzene (LAB) and Caustic Soda from the manufacturing facilities situated at Manali, near Chennai

2 Related Party Disclosure under Accounting Standard -18

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

A) Promoters

1 .Southern Petrochemical Industries Corporation Limited (SPIC)

2.Tamilnadu Industrial Development Corporation Limited (TIDCO)

B) Associates

1. Petro Araldite Private Limited (PAPL)

2. Manali Petrochemicals Limited (MPL)

(Company in which the KMP can exercise significant influence)

C) Subsidiaries

1 .Certus Investment and Trading Limited (CITL), Mauritius

2.Certus Investment and Trading (S) Private Limited

3. Proteus Petrochemicals Private Limited (formerly TPL India Singapore Private Limited).

D) Key management personnel Muthukrishnan Ravi, Managing Director

3. Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 there are no overdue amounts payable to them. Such parties are as identified by the management and relied upon by the auditors. Further, no interest during the year has been paid or payable under the terms of the Act.

4. The Company suspended the operations of Epichlorohydrin plant from April 2013 owing to continuous losses. Availability of cheaper imports led to lower price realization and lower demand for this product. The Management has been exploring the possibility of using this plant for manufacture of an alternate product. Pursuant to this, an Associate Company has shown interest in utilizing this plant facility with suitable modifications to manufacture one of their raw materials and detailed engineering study in this regard is in progress. The Company has been granted Environmental Clearance by the MoEF(Ministry of Environment and Forests and Climate change) vide letter dated 15th May, 2015 and actions taken for other clearances. Production of the alternate product is expected to be commenced within 18 months after obtaining the necessary clearances Based on the estimated future revenues that would be generated by the plant with the production of the alternate product, the management is of the view that the recoverable value of the plant will be higher than the carrying value of Rs.1,224 lakhs as on the balance sheet date and hence no provision for impairment is considered necessary.

5. During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014 the Company has revised the estimated useful life of some of its assets to align the useful life with those specified in Schedule II. The details of previously applied depreciation method, rates / useful likfe are as follows:

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets (determined after considering the revised useful life as prescribed by Schedule II), net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs.1410.69 lakhs (Rs. 2041.53 net of deferred tax of Rs.630.84 lakhs ) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

The depreciation expense in the Statement of Profit and Loss for the year is lower by Rs. 983.21 lakhs consequent to the adoption of revised useful life as prescribed by Schedule II of the Companies act, 2013.

6. During the financial year 2013-14, the Company has entered in to an agreement for sale of one of its immovable properties and received an advance. This transaction is expected to be completed by June 2015.

7. Other payable represent amount received in advance towards sale of 100000 equity shares in SEPC Power (Private) Limited during Financial year 2012-13. The same will get adjusted against Investment held, on successful implementation of the power project by SEPC Power (Private) Limited.

8. Employee Defined Benefit Plans

The Company offers Gratuity benefits to its employees which are funded with Life Insurance Corporation of India.

9. The Company operates in only one segment, namely, Industrial Intermediate Chemicals. Details of secondary segment information are disclosed in the consolidated financial statements.

10 Exceptional item represent provision towards diminution in the value of investment in an Associate Company ( Petro Araldite Private Limited).

11. Employee benefits expense for the year includes an amount of Rs.344.27 lakhs towards compensation to the employees who had opted for early retirement from service (ERS) during the year.

12. The performance of Chlor Alkali Division (CAD) tapered considerably due to various extraneous factors since 2012. Though the demand for Caustic soda, the main product of the division has been constant, the profitability was greatly affected consequent to high cost of captive power consumption in view of severe power cuts imposed in the State. The management has been taking necessary steps to reduce the high cost of power. Based on the estimated future revenues that would be generated by the CAD and also based on valuation of the Plant by an Independent Chartered Engineers, the management has assessed and concluded that the recoverable value, as defined in the Accounting Standard 28, of the Plant is higher than the carrying value of Rs.5,550.51 lakhs (excluding land cost) as on the balance sheet date and hence no provision for impairment is considered necessary.

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

Mar 31, 2014

1. Corporate information

Tamilnadu Petroproducts Limited (TPL) was incorporated in 1984 as a public limited Company and is jointly promoted by Southern Petrochemicals Industries Corporation Limited (SPIC) and Tamilnadu Industrial Development Corporation Limited (TIDCO) . Its shares are listed on two stock exchanges in India. viz. National Stock Exchange of India and Bombay Stock Exchange Ltd. The Company is currently engaged in the manufacturing and selling of petrochemical products namely Linear Alkyl Benzene (LAB) and Caustic Soda from the manufacturing facilities situated at Manali, near Chennai

In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 206 A of the Companies Act, 1956.

(i) Average rate of interest on Term loan from Bank I is 13.00% p.a (2013:13.03%) and Bank II is13.89 %p.a. (2013:14.02%). The Loans are secured by a fi rst mortgage of all the Company''s immovable properties, both present and future, and second charge on all the movable properties of the Company (except for exclusive charges referred in note (ii) below) by deposit of title deeds, ranking pari passu amongst them.

(ii) Average rate of interest on loan from HDFC Limited is 13.39% p.a (2013: 13.17%). The Loan is secured by an exclusive mortgage of a specifi ed property at Chennai by way of deposit of title deeds and rent receivables on the said property.

Year ended Year ended 31st March 2014 31st March 2013 (Rupees in lakhs) (Rupees in lakhs)

2. Contingent Liabilities and Commitments (to the extent not provided for) A. Contingent liabilities: Disputed Demands

i) Sales Tax 1,728.05 1,728.05

The demands relate to disallowance of claims for exemption of turnover arising on account of stock transfers to branches and genuineness of declarations fi led by certain customers for availing concessional rate of tax.

ii) Excise Duty 168.61 168.61

iii) Service Tax 314.59 314.59

iv) Electricity Tax 1,054.93 1,054.93

The Tamilnadu Government vide Government Order dated 23rd September 1996 exempted specified industries permanently from payment of electricity tax on consumption of self -generated electrical energy under the "Tamilnadu Electricity (Taxation on Consumption) Act, 1962".

The above Act was repealed by the "Tamilnadu Tax on Consumption or Sale of Electricity Act, 2003", withdrawing the exemption granted to specifi ed industries.

The Company''s appeal against the withdrawal of exemption was dismissed by the Madras High Court and the Company fi led a "Special Leave Petition" (SLP) before the Supreme Court. On 15th May 2007 the Supreme Court held that the 2003 Act was not valid in respect of industries which were permanently exempted from payment of tax. Consequent to this decision upholding the exemption, the Company, in June 2007 reversed the provision for electricity tax amounting to Rs. 878.77 lacs made in books since 2003-04.

In November 2007, the Government of Tamilnadu passed "the Tamilnadu Tax on Consumption or Sale of Electricity Amendment Act" amending the 2003 Act to invalidate the exemption granted with retrospective effect. The writ petitions fi led before the division bench of the High Court against this amendment were dismissed by its Order dated 15.06.2012.

The Company has fi led a SLP before the Supreme Court in October 2012 challenging the High Court Order and is hopeful of a favorable decision by Supreme Court especially on invalidation of the exemption granted with retrospective effect. Accordingly, no provision is considered necessary for the electricity tax relating to the period from 2003 to 2008 aggregating to Rs.1054.93 lakhs. However, provision has been made for this liability for subsequent periods excluding the periods for which specifi c exemption were granted through notifi cations.

v) Renewable Energy Purchase Obligation (RPO) 412.55 301.37

The Company has disputed the obligation under the "Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligation) (Amendment) Regulations, 2011" under Gazette notifi cation TNERC/RPO/19/2 dated 29th July 2011 and fi led a Writ Petition in March 2012 before the Honorable Madras High Court. On 26th March 2012, an interim stay was granted by the Honorable Madras High Court on the operation of the Regulations. The Company is hopeful of successful outcome of the writ petition fi led before the Honorable Madras High Court and hence no provision is considered necessary in this regard.

Demands disputed by the Company and appeals fi led against these disputed demands are pending before respective appellate authorities. Outfl ows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Company''s rights for future appeals. No reimbursements are expected.

B Commitments

Capital commitments 155.20 56.65

Confirmed purchase commitments to be fulfilled within one year 61,500.00 49,241.75

Confirmed sales commitments to be fulfilled within one year 28,292.80 22,643.79

3. Related Party Disclosure under Accounting Standard -18

i) The list of related parties as identifi ed by the Management and relied upon by the Auditors are as under

A) Promoters

1. Southern Petrochemical Industries Corporation Limited (SPIC)

2. Tamilnadu Industrial Development Corporation Limited (TIDCO)

B) Associates

1. Petro Araldite Private Limited (PAPL)

2. Manali Petrochemicals Limited (MPL) (Company in which the KMP can exercise signifi cant infl uence)

C) Subsidiaries

1. Certus Investment and Trading Limited (CITL), Mauritius

2. Certus Investment and Trading (S) Private Limited

3. Proteus Petrochemicals Private Limited (formerly TPL India Singapore Private Limited).

D) Joint Venture

Gulf Petroproduct Company E.C. (upto 19th August 2013)

E) Key Management Personnel

1. Mr. Muthukrishnan Ravi, Managing Director

4. Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 there are no overdue amounts payable to them. Such parties are as identifi ed by the management and relied upon by the auditors. Further, no interest during the year has been paid or payable under the terms of the Act.

5. The Company suspended the operations of Epichlorohydrin plant from April 2013 owing to continuous losses. Availability of cheaper imports led to lower price realization and lower demand for this product. The management has been exploring the possibility of using this plant for manufacture of an alternate product. Pursuant to this, an Associate company has shown interest in utilizing this plant facility with suitable modifi cations to manufacture one of their raw materials and has initiated detailed engineering study in this regard. Based on Preliminary feasibility study, the Company has applied for obtaining environmental and other clearances for manufacture of the said product and the same is pending before the relevant authorities. Based on the estimated future revenues that would be generated by the plant with the production of the alternate product, the management is of the view that the recoverable value of the plant will be higher than the carrying value of Rs.1,340 lakhs as on the balance sheet date and hence no provision for impairment is considered necessary.

6. The Company has been depreciating two of the assets in the processing plant over 4.5 years i.e. @ 22%. These assets are the proprietary products of an overseas vendor and based on their guaranteed useful life and technical re-evaluation carried out, the Company has revised the useful life of these assets to 8 and 15 years. Accordingly, the net book value of these assets as at the beginning of the year is depreciated over the remaining revised useful life. Consequently, the depreciation charge and loss for the year is lower by Rs. 682.44 lakhs.

7. During the year, the Company has entered in to an agreement for sale of one of its immovable properties and received an advance. This transaction is expected to be completed by June 2015.

8. Other payable represent amount received in advance towards sale of 100000 equity shares in SPIC Electric Power Corporation (Private) Limited during Financial year 2012-13. The same will get adjusted against Investment held, on successful implementation of the power project by SEPC Power (Private) Limited.

9)a) Estimates of future salary increases considered in actuarial valuation take account of infl ation, seniority, promotions and other factors.

b) In the absence of relevant information from the actuary, the above details do not include the experience adjustment in respect of actuarial losses/gains. 47. The Company operates in only one segment, namely, Industrial Intermediate Chemicals. Details of secondary segment information are disclosed in the consolidated financial statements.

10)The Company operates is only one segment, namely, Industrial Intermediate Chemicals. Details of secondary segment information are disclosed in the consolidated financial statements.

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

Mar 31, 2013

As at As at 31st March, 2013 31st March, 2012 (Rupees in lakhs) (Rupees in lakhs)

A. Contingent liabilities Disputed Demands

(i) Sales Tax 1,728.05 1,728.05

The demands relate to disallowance of claims for exemption of turnover arising on account of stock transfers to branches and genuineness of declarations filed by certain customers for availing concessional rate of tax.

(ii) Excise Duty 168.61 168.61

(iii) Service Tax 314.59 314.59

The above demands are disputed by the Company and appeals filed against these disputed demands are pending before respective appellate authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Company''s rights for future appeals. No reimbursements are expected.

(iv) Electricity Tax 1,054.93 1,231.42

The Tamilnadu Government vide Government Order dated 23rd September 1996 exempted specified industries permanently from payment of electricity tax on consumption of self-generated electrical energy under the "Tamilnadu Electricity (Taxation on Consumption) Act, 1962".

(v) 1. Related Party Disclosure under Accounting Standard -18

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

A) Promoters 1. Southern Petrochemical Industries Corporation Limited

2. Tamilnadu Industrial Development Corporation Limited

B) Associates 1. Petro Araldite Private Limited

2. Manali Petrochemicals Limited (Company in which the KMP can exercise significant influence)

C) Subsidiaries 1. Certus Investment and Trading Limited (CITL), Mauritius

2. Certus Investment and Trading (S) Private Limited

3. Proteus Petrochemicals Private Limited (formerly TPL India Singapore Private Limited).

4. SPIC Electric Power Corporation (Private) Limited (upto June 29, 2012)

D) Joint Venture Gulf Petroproduct Company E.C.

E) Key Management 1. Thiru RM. Muthukaruppan, Managing Director (till February 3, 2013)

Personnel 2. Thiru V. Ramani, Director & Chief Financial Officer (till February 3, 2013)

3. Thiru Muthukrishnan Ravi, Managing Director (from February 4, 2013)

(vi) 2. The Company operates in only one segment, namely, Industrial Intermediate Chemicals. Details relating to segments are disclosed in the Consolidated Financial Statements.

Mar 31, 2012

1. Corporate information

Tamilnadu Petroproducts Limited (TPL) was incorporated in 1984 as a public limited Company and is jointly promoted by Southern Petrochemicals Industries Corporation Limited (SPIC) and Tamilnadu Industrial Development Corporation Limited (TIDCO). Its shares are listed on two stock exchange in India. viz. National Stock Exchange of India Limited and Bombay Stock Exchange Ltd. The Company is currently engaged in the manufacturing and selling of petrochemical products namely Linear Alkyl Benzene (LAB), Epichlorohydrin (ECH) and Caustic Soda from the manufacturing facilities situated at Manali, near Chennai

There has been no movement in equity share capital during the year.

The Company has only one class of equity shares having a par value of Rs.10/-. Each holder is entitled to one vote per equity share. Dividend proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting. The amount of dividend proposed to be distributed to equity shareholders is Rs. 449.86 lacs and the related amount per equity shares is Rs. 0.50.

(i) Average rate of interest on Term loan from Bank I is 13.68% p.a (2011:13.00%) and Bank II is 15.72% p.a. (2011:13.67%). The Loans are secured by a first mortgage of all the company's immovable properties, both present and future, and second charge on all the movable properties of the company (except for exclusive charges referred in note (ii) below) by deposit of title deeds, ranking pari passu amongst them.

(ii) Average rate of interest on loan from Financial Institution is 13.71% p.a (2011:13.36%). The Loan is secured by an exclusive mortgage of a specified property at Chennai by way of deposit of title deeds and rent receivables on the said property,

Loans are secured by hypothecation by way of charge on inventories both on hand and in transit, book debts and other receivables, both present and future and further secured by way of mortgage by deposit of title deeds of immovable properties, both present and future, (except for exclusive charges stated in note 5 (ii) above) on second charge basis ranking pari passu amongst them.

2. During the year 2004, the company had acquired assets in the form of equipments and drawings amounting to Rs 2123.63 lacs for revamp of Normal Paraffin(NP) capacity at the existing plant in Manali. However due to change in Global market conditions resulting in availability of NP at competitive prices, the Company decided not to proceed with the revamp. During the same period, the Company proposed to set up a Greenfield NP Project at Singapore. It was then decided that the assets would be utilized in the Singapore NP Project and transferred to them at not less than cost. During early 2012, the availability of NP became scarce globally and the Company considered it prudent to utilize these assets to augment captive production of NP as it was cost advantageous compared to the price of imported NP Further, the Singapore project was getting delayed due to issues with raw material supplies. The company has obtained a report from an independent consultant confirming that the assets are in good condition and usable in the current expansion and there is no impairment. The installation of these assets is in progress. Consequently amounts lying under 'Assets held for transfer' have been transferred to capital work in progress and will be capitalized on commissioning.

Note (i):

As at 31st March 2012, the Company has investments of Rs.2764.50 lacs in SPIC Electric Power Corporation (Private) Ltd., (SEPC) for setting up a 525 MW coal based power project (power project) made during the period 1995-2003 and advance against equity of Rs.33.91 lacs made during the period 2006-2008. The Company signed a Memorandum of Understanding (MoU) with Tamilnadu Electricity Board (TNEB) in February 1995 for setting up the power project at Tuticorin, Tamilnadu. As per the Power Purchase Agreement (PPA), TNEB had committed to provide Escrow. However, as there was a delay in allocation of Escrow by TNEB, SEPC filed a Writ Petition in the Hon'ble High Court of Madras seeking a direction for allocation of Escrow. The Company is awaiting the outcome of the case.

The Company, SEPC and an investor company executed on 28th May 2009, a Shareholders & Share Subscription Agreement (SSA) broadly underlining the obligations of the Shareholders with regard to the power project. The investor company has agreed to bring in 74% of the equity for the power project. They have been meeting all the expenses of SEPC since August 2007 and have so far contributed a sum of Rs. 2968.45 lacs upto 31st March 2012. Against this amount, 1,54,14,550 equity shares of Rs. 10/- each for cash at par have been allotted to them and the balance is shown under 'Advance towards share capital' in the books of SEPC.

Due to non payment of lease rentals, Tuticorin Port Trust, presently known as VO. Chidambaranar Port Trust (VOCPT) sought to repossess the land allotted to SEPC for the power project. SEPC approached the Hon'ble High Court of Madras for appointment of an Arbitrator and the High Court by their Order dated 18th July 2008 a sole arbitrator was appointed to settle the dispute between SEPC and VOCPT . SEPC also filed an appeal before the Division Bench of the High Court of Madras seeking an interim injunction restraining TPT from transferring the land by way of lease or otherwise to any other party. The Division Bench by its order dated 4th September 2008 stated that SEPC is at liberty to approach the arbitrator for seeking appropriate interim measure. The arbitrator in his proceedings dated 13th February 2009 observed that the rights of VOCPT and SEPC will be subject to the outcome of the arbitration proceedings in so far as the disputed site is concerned. Subsequently it was agreed between VOCPT and SEPC to defer the arbitration proceedings on the understanding that the issue would be amicably settled.

Arising out of this, a joint committee consisting of representatives from Central Electricity Authority (CEA)/TNEB/VOCPT was constituted. The committee recommended an alternate site for locating the power project. SEPC after making preliminary investigations found the alternate site suitable. Ministry of shipping, Government of India during February 2010 approved the proposal for allocation of alternate site to SEPC and VOCPT communicated their willingness to enter into a long term lease. The Ministry of Environment and Forests (MoEF) had accorded clearance for the project on November 03, 2010. SEPC has paid lease rentals to VOCPT by calculating penal interest @ 15% amounting to Rs.830 lacs as against 18% proposed by VOCPT. A representation from SEPC for charging 15% interest is under consideration by VOCPT.

Pending permission to take physical possession of the alternate land, VOCPT had permitted SEPC to enter upon the said land for starting the project work as SEPC already paid the Lease Rent due and also obtained Environmental Clearance. In continuation, SEPC has commenced the various site development works such as Joint Physical Survey, Corner stone laying work, Name Board installation and site leveling work. With regard to the allocations / permissions for the Fore Shore facilities comprising of Coal jetty, Conveyor routing and Pump-house, SEPC held discussions with VOCPT and the allocations are being considered by VOCPT favourably for which a detailed report was also submitted by SEPC.

SEPC approached the Tamilnadu Pollution Control Board for grant of Consent to Establish the Project and the same is in the advanced stage of issuance. Further, SEPC is continuing the process of finalization of the EPC Contract as per the directions of Hon'ble TNERC. With regard to the fuel supply contracts for supply of Coal and Fuel Oil, discussions are underway with the suppliers.

The Company filed a Misc. Petition dated 14th April 2010 with Hon'ble TNERC seeking its direction to pass orders directing the respondent TNEB Board to act in accordance with the terms contained in the concluded PPA between SEPC and TNEB. During the course of hearing of the petition, TNEB filed an affidavit conveying its acceptance of the terms conveyed in the PPA and also stated that the PPA was valid and that it would stand by the said PPA. The Hon'ble TNERC passed the final orders on 9.5.2011 for implementation of the project including directing certain changes to the PPA in line with the TNERC Tariff Regulations of 2005. Accordingly, SEPC and TANGEDCO (formerly TNEB) signed the amendments to the PPA on 10.1.2012 with the approval of the Board of TANGEDCO and the amended PPA was submitted to Hon'ble TNERC on 13.1.2012.

The detailed project report with revised project cost for the power plant has been finalized. SEPC's application for financial assistance is being processed by the Financial Institutions. Since substantial progress has been achieved as mentioned above in implementation including commencement of physical activities in the alternate land, the Company is hopeful that the project will be set up soon.

3. Contingent Liabilities and commitments (to the extent not provided for)

(Rupees in lakhs)

Year ended Year ended Particulars 31st March, 31st March, 2012 2011

A. Contingent liabilities:

i) Sales Tax 1728.05 1728.05

The demands relate to disallowance of claims for exemption of turnover arising on account of stock transfers to branches and genuineness of declarations filed by certain customers for availing concessional rate of tax.

ii) Excise Duty 168.61 168.61

iii) Service Tax 314.59 67.85

4. Related Party Disclosure under Accounting Standard -18

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

A) Promoters 1.Southern Petrochemical Industries Corporation Limited (SPIC)

2.Tamilnadu Industrial Development Corporation Limited (TIDCO)

B) Associate Petro Araldite Private Limited

C) Subsidiaries 1.Certus Investment and Trading Limited (CITL), Mauritius

2.Certus Investment and Trading (S) Private Limited

3. Proteus Petrochemicals Private Limited (formerly TPL India Singapore Private Limited).

4. SPIC Electric Power Corporation (Private) Limited.

D) Joint Venture Gulf Petroproduct Company E.C.

5. Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 there are no overdue amounts payable to them. Such parties are as identified by the management and relied upon by the auditors. Further, no interest during the year has been paid or payable under the terms of the Act.

6. Pursuant to the notification dated December 29, 2011 issued by the Ministry of Corporate Affairs amending Accounting Standard 11, the Company has exercised the option available in Para 46A of the Standard introduced by this amendment, for all long term monetary assets and liabilities. Accordingly, the exchange differences on foreign currency monetary liabilities has been accounted by adjustment to the cost of the assets so far it relates to depreciable capital assets. Consequently an amount of Rs. 43.42 lakhs has been capitalised as at 31st March 2012, and the balance to be amortised is Rs. 41.89 lakhs.

7. Details relating to segments are disclosed in the Consolidated Financial Statements.

8. The Revised Schedule VI has become effective from 1 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. In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 206 A of the Companies Act, 1956.

2. Research and development expenses incurred on revenue account is Rs. 38.74 lacs (Previous year Rs.34.16 lacs).

3. The depreciation charge for the year shown in the profit and loss account is after deducting an amount of Rs. 20.11 lacs (previous year Rs.20.11 lacs) representing additional depreciation arising on revaluation of fixed assets withdrawn from revaluation reserve.

(Rs. in Lacs)

As at As at

March 31, 2011 March 31, 2010

4. Contingent Liabilities

Other claims not acknowledged as debts

i) Sales tax 1,728.05 1,669.96

The demands relate to disallowance of claims for exemption of turnover arising on account of stock transfers to branches and genuineness of declarations filed by certain customers for availing concessional rate of tax.

ii) Excise duty 168.61 169.51

iii) Service Tax 67.85 67.85

The above amounts are based on demands raised which the company is contesting with the concerned authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the company's rights for future appeals. No reimbursements are expected.

iv) Electricity Tax 1,138.00 1,138.00

Vide a Government Order dated 23rd September 1996, the Tamilnadu Government exempted specified industries permanently from payment of electricity tax on consumption of self generated electrical energy under the Tamilnadu Electricity (Taxation on Consumption) Act, 1962.

The Tamilnadu Tax on Consumption or Sale of Electricity Act, 2003 repealed the 1962 Act, and withdrew the earlier exemption granted to specified industries. The Company's appeal against the withdrawal of exemption was dismissed by the Madras High Court. The Company filed a special leave petition before the Supreme Court against the verdict. On 15th May 2007 the Supreme Court upheld that the 2003 Act was not valid in respect of industries which were permanently exempted from payment of tax.

Consequent to the Supreme Court judgment upholding the exemption, the Company (in June 2007) reversed the provision for electricity tax amounting to Rs. 878.77 lacs made since 2003-04.

Subsequently, the Government of Tamilnadu passed the Tamilnadu Tax on Consumption or Sale of Electricity Amendment Act in November 2007 amending the 2003 Act to invalidate the exemption granted with retrospective effect. In December 2007, the Company filed a writ petition before the Madras High Court challenging the Amendment Act. On 13th February 2008, the High Court passed an interim order that in the event of non payment of tax on consumption for those covered under exemption, TNEB is at liberty to make the demand but not enforce it until further orders.

Exemption from payment of electricity tax has been extended to 31.03.2011.

5. (a) Government of India, Ministry of Corporate Affairs vide its Notification dated 8th February 2011 has granted general exemption from giving information in respect of para 3(i)(a) and 3 (ii) (a) of part II of Schedule VI to the Companies Act, 1956, only for those goods which forms less than 10% of the total value of turnover, purchase, consumption of raw material etc. The Company has also obtained specific exemption from giving information in respect of para 3(i)(a) and 3(ii)(a) of the Schedule relating to Linear Alkyl Benzene business.

(b) Government of India, Ministry of Corporate Affairs vide its Order No.47/34/2010-CL-III dated 14th January 2011 issued under Section 212(8) of the Companies Act, 1956 has directed that in relation to the Subsidiaries of the Company, the provision contained in Section 212(1) of the Companies Act, 1956 pursuant to which certain documents are required to be attached to the CompanyÃs accounts shall not apply for the current year.

(c) The Government of India, Department of Company Affairs vide its Order No. 47/34/2010-CL-III dated 14th January 2011 issued under Section 212 (8) of the Companies Act, 1956 has directed that in relation to the Subsidiaries of the Company, the provision contained in Section 212(1) of the Companies Act, 1956 pursuant to which certain documents are required to be attached to the Company's accounts shall not apply for the current year.

6. Based on, and to the extent of information received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 there are no overdue amounts payable to them. Such parties are as identified by the management and relied upon by the auditors. Further, no interest during the year has been paid or payable under the terms of the Act.

7. Related Party Disclosure under Accounting Standard - 18

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

A) Promoters 1. Southern Petrochemical Industries Corporation Limited

2. Tamilnadu Industrial Development Corporation Limited

B) Associate Petro Araldite Private Limited

C) Subsidiaries 1. Certus Investment and Trading Limited (CITL),Mauritius

2. Certus Investment and Trading (S) Private Limited

3. Proteus Petrochemicals Private Limited (formerly TPL India Singapore Private Limited).

4. SPIC Electric Power Corporation (Private) Limited

D) Joint Venture Gulf Petroproduct Company E.C.

E) Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual.

None

F) Key management personnel 1. Thiru. RM. Muthukaruppan

Managing Director

2. Thiru. V. Ramani

Director & Chief Financial Officer

G) Enterprise over which any person described in (E) or (F) is able to exercise significant influence. This includes enterprises owned by Directors or major shareholders of the reporting enterprise that enterprise that have a member of key management personnel in common with the reporting enterprise.

None

18. As at 31st March 2011, the Company has investments of Rs.2764.50 lacs in SPIC Electric Power Corporation (Private) Ltd., (SEPC) for setting up a 525 MW coal based power project (power project) made during the period 1995-2003 and advance against equity of Rs.33.91 lacs made during the period 2006-2008. The Company signed a Memorandum of Understanding (MoU) with Tamilnadu Electricity Board (TNEB) in February 1995 for setting up the power project at Tuticorin, Tamilnadu. As per the Power Purchase Agreement (PPA), TNEB had committed to provide Escrow. However, as there was a delay in allocation of Escrow by TNEB, SEPC filed a Writ Petition in the HonÃble High Court seeking a direction for allocation of Escrow. The Company is awaiting the outcome of the case.

The Company, SEPC and an investor company executed on 28th May 2009, a Shareholders & Share Subscription Agreement (SSA) broadly underlining the obligations of the Shareholders with regard to the power project. The investor company has agreed to bring in 74% of the equity for the power project. They have been meeting all the expenses of SEPC since August 2007 and have so far contributed a sum of Rs. 1191.45 lacs upto 31st March 2011. Against this amount, 1,19,14,550 equity shares of Rs. 10/- each for cash at par have been allotted to them.

Due to non payment of lease rentals, Tuticorin Port Trust (TPT) sought to repossess the land allotted to SEPC for the power project. SEPC approached the HonÃble High Court of Madras for appointment of an Arbitrator and by orders dated 18th July 2008 a sole arbitrator was appointed to settle the dispute between SEPC and TPT. SEPC also filed an appeal before the Division Bench of the High Court seeking an interim injunction restraining TPT from transferring the land by way of lease or otherwise to any other party. The Division Bench by its order dated 4th September 2008 stated that SEPC is at liberty to approach the arbitrator for seeking appropriate interim measure. The arbitrator in his proceedings dated 13th February 2009 observed that the rights of TPT and SEPC will be subject to the outcome of the arbitration proceedings in so far as the disputed site is concerned. Subsequently it was agreed between TPT and SEPC to defer the arbitration proceedings on the understanding that the issue would be amicably settled.

Arising out of this, a joint committee consisting of representative from Central Electricity Authority (CEA)/TNEB/TPT was constituted. The committee recommended an alternative site for locating the power project. SEPC after making preliminary investigations found the alternative site suitable. Ministry of Shipping, Government of India during February 2010 has approved the proposal for allocation of alternate site to SEPC and TPT communicated their willingness to enter into a long term lease . The Ministry of Environment and Forests (MoEF) had accorded clearance for the project on November 03, 2010. SEPC has paid lease rentals to TPT by calculating penal interest @ 15% amounting to Rs.830 lacs as against 18% proposed by TPT. A representation from

SEPC for charging 15% interest is under consideration by TPT and on receipt of confirmation from TPT on the final demand, action would be initiated to take physical possession of the alternate land.

The Company filed a writ petition dated 14th April 2010 with HonÃble TNERC seeking its direction to pass orders directing the respondent TNEB Board to act in accordance with the terms contained in the concluded PPA between SEPC and TNEB. During the course of hearing of the petition, the Board filed an affidavit conveying its acceptance of the terms conveyed in the PPA and also stated that the PPA was valid and that it would stand by the said PPA. At the hearing on 7th March 2011, the Honourable Commission reserved the matter for final orders.

The detailed project report with revised project cost for the power plant has been finalized. SEPCÃs application for financial assistance is being processed by the Financial Institutions. The Company is hopeful that the project will be set up soon.

8. During the year 2004, due to change in global market conditions for Normal Paraffin, the company decided not to proceed with the expansion of Normal paraffin capacity. The equipments and drawings pertaining to this project amounting to Rs.2,123.63 lacs is expected to be transferred at not less than cost to its proposed overseas project at Singapore during 2011.

9. The Company promoted Henkel India Ltd., (HIL) as a joint venture with Henkel KG & Co., KGaA, Germany (Henkel) in Sept. 1989 to manufacture and market detergents to provide forward integration for the CompanyÃs LAB business. The Company, as part of its business re-structuring, decided to disinvest its equity shareholdings in HIL. In this regard discussions were held with Henkel and subsequently a buyer viz., M/s. Jyothy Laboratories Ltd., Mumbai (JLL) was identified. On 16th March 2011, a major portion of the CompanyÃs equity holding in HIL were sold to JLL. Thereafter, on 6th April 2011, both Henkel and TPL mutually agreed to terminate the ShareholdersÃ Agreement (including the amendments and supplements thereto) entered into between them on 11th September 1989, with no further liability or claim against each other and an understanding to this effect was signed.

10. Taxes on income

MAT credit is recognized as an asset when there is convincing evidence that the Company will pay normal income tax within the specified period. The asset will be reviewed at each balance sheet date.

11. Details relating to segments are disclosed in the Consolidated Financial Statements.

12. Previous yearÃs figures have been regrouped/recast, wherever necessary, to conform to current years classification.

Mar 31, 2010

1. In December 1993, the company came out with Rights cum Public Issue of Equity Shares. The difference between issued and subscribed capital of 5,425 shares (previous year 5,425 shares) is due to said shares kept in abeyance under Section 206 A of the Companies Act, 1956.

2. Research and development expenses incurred on revenue account is Rs.34.16 lacs (Previous year Rs.34.13 lacs).

3. The depreciation charge for the year shown in the profit and loss account is after deducting an amount of Rs. 20.11 lacs (previous year Rs.20.11 lacs) representing additional depreciation arising on revaluation of fixed assets withdrawn from revaluation reserve.

4. As at 31st March 2010 the Company has investments of Rs.2764.50 lacs in SPIC Electric Power Corporation (Private) Ltd., (SEPC) for setting up a 525 MW coal based power project (power project) made during the period 1995-2003 and advances against equity of Rs.33.91 lacs made during the period 2006-2008. The Company signed a Memorandum of Understanding (MoU) with Tamilnadu Electricity Board (TNEB) in February 1995 for setting up the power project at Tuticorin, Tamilnadu. As per the Power Purchase Agreement (PPA), TNEB had committed to provide Escrow. However, as there was a delay in allocation of Escrow by TNEB, SEPC filed a Writ Petition in the Honble High Court seeking a direction for allocation of Escrow. The Company is awaiting the outcome of the case.

The Company, SEPC and an investor company executed on 28th May 2009, a Shareholders & Share Subscription Agreement (SSA) broadly underlining the obligations of the Shareholders with regard to the power project. The investor company has agreed to bring in 74% of the equity for the power project. They have been meeting all the expenses of SEPC since August 2007 and have so far contributed a sum of Rs151.45lacs upto 31st March 2010.

Due to non payment of lease rentals, Tuticorin Port Trust (TPT) sought to repossess the land allotted to SEPC for the power project. SEPC approached the Honble High Court of Madras for appointment of an Arbitrator and by orders dated 18th July 2008 a sole arbitrator was appointed to settle the dispute between SEPC and TPT. SEPC also filed an appeal before the Division Bench of the High Court seeking an interim injunction restraining TPT from transferring the land by way of lease or otherwise to any other party. The Division Bench by its order dated 4th September 2008 stated that SEPC is at liberty to approach the arbitrator for seeking appropriate interim measure. Thereafter, the arbitrator in his proceedings dated 13th February 2009 observed that the rights of TPT and SEPC will be subject to the outcome of the arbitration proceedings in so far as the disputed site is concerned.

A joint committee consisting of representative from Central Electricity Authority (CEA)/TNEB/TPT recommended an alternative site for locating the power project. SEPC after making preliminary investigations has found the land suitable. Thereafter the alternate site has been approved by TNEB/TPT/CEA. The arbitration proceedings between SEPC and TPT have therefore been kept in abeyance.

The process of obtaining environmental clearance from Ministry of Environmental and Forests (MoEF) is at an advanced stage. Demarcation under the Coastal Zone Regulation, Contour Survey and Preliminary soil investigations have been completed. The detailed project report with a revised project cost is under consideration. SEPC will pay the arrears of lease rentals on taking possession of the land.

The Ministry of Power, Government of India has clarified by a letter dated 24th February 2010 that the change to an alternate site would not alter the legal enforceability of the already concluded PPA between SEPC and TNEB. SEPC has filed a petition dated 14th April 2010 with Tamilnadu Electricity Regulatory Committee (TNERC) to direct TNEB to act in accordance with the terms and conditions in the concluded PPA.

In view of the substantial progress achieved, the Company is confident that the power project would be implemented.

5 During the year 2004, due to change in global market conditions for Normal Paraffin, the company decided not to proceed with the expansion of Normal paraffin capacity. The equipments and drawings pertaining to this project amounting to Rs.2,123.63 lacs is expected to be transferred at not less than cost to its proposed overseas project at Singapore during 2011.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article