Home  »  Company  »  Finolex Industri  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Finolex Industries Ltd.

Mar 31, 2017

1. Segment Information

For management purposes, the Company is organized into business units based on their products and which has following three reportable segments :

1 PVC - engaged in producing and distributing PVC resin

2 Pipes and fittings - engaged in producing and distributing pipes and fittings required principally in the agriculture and construction industries

3 Power - engaged in generation of power for captive consumption

No operating segments have been aggregated to form the above reportable operating segments.

The management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss that is measured consistently with profit or loss in the financial statements. The Company''s financing (including finance costs and finance income) and income taxes are not allocated to operating segments.

Adjustments and eliminations

Finance income and costs, and fair value gains and losses on financial assets are not allocated to individual segments as the underlying instruments are managed for the entity as a whole.

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are also managed for the entity as a whole.

Capital expenditure consists of additions of property, plant and equipment and intangible assets.

Inter-segment revenues are eliminated on consolidation.

Geographic information

In the years ended 31st March 2015, 31st March 2016 and 31st March 2017, the Company catered mainly to the needs of the Indian markets. Export turnover during each year was less than 10% of the total turnover. Hence, there are no reportable geographical segments.

2. Earnings Per Share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

There are no potential shares that have a dilutive effect on the EPS.

The following reflects the income and share data used in the basic and diluted EPS computation

3. Disclosure pursuant to Employee benefits

A. Defined contribution plans:

Amount of Rs, 299.78 Lakhs (March 31, 2016: Rs, 365.74 Lakhs) is recognized as expenses and included in Note No. 33 "Employee benefit expense"

B. Defined benefit plans:

The Company has Gratuity as post employment benefit which is in the nature of defined benefit plans:

The Company operates gratuity plan (funded) wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service.

The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

The gratuity plan is governed by the payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on the defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analysis is based on a change in one significant assumption at a time, keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

The same method has been applied for the sensitivity analysis as when calculating the recognized defined benefit obligation.

4. Related Party Transactions

Related parties have been identified on the basis of requirement of Ind AS 24 ''Related Party Disclosures'' and representation made by the Key Management Persons and taken on record by the Board.

Disclosures of transactions with Related Parties are as under:

A. Description of Related Parties

i) Name of the Related party and nature of relationship where control exists

Nature of relationship Name of the Company

Associate Company Pawas Port Limited

Finolex Plasson Industries Private Limited Enterprise wherein the Company is an Finolex Cables Limited holding 32.39 % in the associate Company Enterprises over which Key Management Finprop Advisory Services Limited Personnel or their relatives exercise Magnum Machine Technologies Limited significant influence_

ii) Key Management Personnel:

Mr. Prakash P Chhabria - Executive Chairman

Mr. Saurabh S. Dhanorkar - Managing Director (Till November 30, 2016) Key Management Personnel ^ y whabi- Director Finance (From August 26, 2016) & CFO

Mr. Sanjay S Math - Managing Director (From December 1, 2016)

Terms and conditions of transactions with related parties

Transaction entered into with related party are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2016: t Nil and April 1, 2015: t Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Commitments with related parties

The Company has not provided any commitment to the related party as at March 31, 2017 (March 31, 2016: * Nil and April 1, 2015: * Nil)

Transactions with key management personnel

Compensation of key management personnel of the Company

The management assessed that cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

Non-current investments

The fair value of investments in quoted equity shares is based on the respective quoted price in the active markets as at the measurement date.

The fair value of investments in unquoted equity shares has been estimated using the net asset method. The valuation requires to consider the cost of replacement of an asset as an indication of the fair market value of that asset.

Current investments

The Company''s current investments consist of investment in units of mutual funds and quoted non-convertible debentures. The fair value of investments in mutual funds is derived from the NAV of the respective units in the active market at the measurement date. The fair value of the non-convertible debentures is derived from quoted market prices in active markets at the measurement date.

There were no transfers between level 1 and level 2 during the year ended March 31, 2017 and March 31, 2016.

5. Financial risk management objective and policies

The Company''s principal financial liabilities comprise short term borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, trade receivables and cash and cash equivalents that arrive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s management oversees the management of these risks. The Company''s management is supported by a risk management committee that advise on financial risks and the appropriate financial risk governance framework. The risk management committee provides assurance to the Company''s management that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company''s policies appetite. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

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 prices comprise threetypes of risk: interest rate risk, currency risk and other price risk such as equity price risk and commodity price risk. Financial instruments affected by market risk include borrowings and investments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2017 and March 31, 2016.

The sensitivity analysis have been prepared on the basis that the amount of net debt and the ratio of fixed-to floating interest rates of the debt are all constant as at March 31, 2017 and March 31, 2016.

The sensitivity of the relevant statement of profit and loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has short term borrowings with fixed interest rates and hence the future cash-flows of relevant financial instrument are not affected by changes in market interest rate.

Foreign currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to its operating activities on account of import of raw materials.

PVC pricing is on import parity and import parity value of sales of the Company approximately equates the USD payables on a six monthly rolling basis due to which a natural hedge exists and hence the Company does not generally need to resort to hedging by way of forward contracts, options, etc.

Commodity price risk

The Company is affected by the volatility of certain commodities. Its operating activities involve the ongoing purchase of Vinyl Chloride Monomer (''VCM''), Ethylene and Ethylene Dichloride (''EDC''), all being petrochemical products, and manufacturing of PVC and pipes and fittings and therefore require a continuous supply of these materials. Prices of PVC manufactured by the Company are monitored by company management and are adjusted to respond to change in import parity price of PVC in Indian market. Market price of input and output, generally get adjusted over a period of time. Accordingly, the company is exposed to the variation in commodity prices over short term period.

Commodity price sensitivity

The following table shows the effect of price changes for VCM, Ethylene EDC after the impact of hedge accounting:

Equity price risk

The Company''s listed and unlisted equity securities are susceptible to market-price risk arising from uncertainties about future values of the investment securities.

The equity securities held by the Company are strategic in nature. The Company''s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value was Rs, 862.68 Lakhs . A decrease of 10% in the fair value will have an impact of approximately Rs, 86.23 Lakhs on OCI and 10.01 on Profit and loss or equity attributable to the Company. An increase of 10% in the value of the securities would also impact OCI, profit and loss and equity.

At the reporting date, the exposure to listed equity securities at fair value was Rs, 1,14,662.86 Lakhs. A decrease of 10% on the NSE market index could have an impact of approximately 1 11,462.27 Lakhs on OCI and Rs, 4.02 Lakhs on Profit and loss or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI, profit and loss and equity.

Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company evaluates credit risk with respect to trade receivables as significantly low, as its payment terms are mostly advance basis.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy.

Investments of surplus funds are made only with approved counter parties and within credit limits assigned to each counter party. Counter party credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company''s risk management Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counter party''s failure to make payments.

The Company''s maximum exposure to credit risk for the components of the statement of financial position is the carrying amounts as illustrated in Notes 13-15.

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s finance department is responsible for liquidity, funding as well as settlement management. In addition, processes and polices related to such risk are overseen by Senior management. Management monitors the Company''s net liquidity position on a monthly and quarterly basis through its Senior management meeting and board meetings. They use rolling forecasts on the basis of expected cash flows.

The Senior management ensures that the future cash flow needs are met through cash flow from the operating activities and short term borrowings from banks.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

6. Capital management

Capital includes equity shares and other equity attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep low a gearing ratio. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash deposits.

There are no financial covenants which are attached to the amounts borrowed by the company.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2017 and 31 March 2016.

7. Exceptional item

During the year ended March 31, 2016, the company received eligibility certificate for the Industrial Promotion Subsidy under the Package Scheme of Incentives. Accordingly, the Company become entitled to receive electricity duty refund amounting to Rs, 2,447.79 Lakhs relating to period April 1, 2011 to March 31, 2014. This has been recognized as an exceptional item in the financial statements.

8. Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''Statement of cash flows'' and Ind AS 102, ''Share-based payment.'' These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ''Statement of cash flows'' and IFRS 2, ''Share-based payment,'' respectively. The amendments are applicable to the Company from April 1, 2017.

Amendment to Ind AS 9:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

Since the Company does not have cash settled awards or awards with net settlement features, this amendment does not have any effect on the financial statements of the Company

The identification of suppliers as micro, small and medium enterprise defined under "The Micro, Small and Medium Enterprises Development Act, 2006" was done on the basis of information to the extent provided by the suppliers of the Company.


Mar 31, 2016

Terms/ Rights attached to equity shares:

The Company has only 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. 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 in the ensuing Annual General Meeting. For year ended March 31, 2016, the amount of per share dividend recognised as distributed to equity shareholders was Rs. 10 (March 31, 2015 Rs. 2)

In the event of liquidation of the company, the holders of equity shares are entitled to receive remaining assets of the company after distribution of all preferential amounts.The distribution will be in proportion to the number of equity shares held by the shareholders.

1.1) Terms of borrowings:

Terms of debenture

1,000 privately placed 10.90 % secured redeemable non-convertible debentures of Rs. 10 lakhs each, aggregating to Rs. 10,000 lakhs (10.90% NCDs) will be redeemed in 3 years bullet from the date of allotment i.e. 31st December, 2013

Nature of security for secured borrowings and working capital:

Debentures

The outstanding amount payable on 10.90% NCDs of Rs. 10,000 lakhs with the interest accrued there on but unpaid and all other costs, charges, expenses and fees payable to the debenture trustees namely Axis Trustee Services Limited ("ATSL") secured under the Debenture Trust Deed and creation of simple mortgage on pari passu basis in favour of ATSL on immoveable properties of the Company falling within the battery limit of the site of the Company''s plant for manufacture of PVC Resin, situated at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plants and machinery attached to the earth or permanently fastened to anything attached to the earth.

Working capital

The aggregate limits of working capital borrowings of Rs. 1,39,575 lakhs from the Bank of India Consortium together with all interest, liquidated damages, costs, charges and other moneys payable under working capital consortium agreement/sanction letters are secured by:

(i) Hypothecation of inventories and book debts; and

(ii) Extension of second equitable mortgage, created in favour of Bank of India Consortium on pari passu basis with other second charge holder by deposit of title deeds with Axis Bank Ltd. (ABL), New Delhi. ABL acting as an agent for Bank of India Consortium, which ranks subsequent and subservient in rank of priority over the first equitable mortgages created by deposit of title deeds in respect of immoveable properties falling within the battery limit of the site of the Company''s plant for manufacture of PVC Resin, situated at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

1.2 Electricity duty exemption amounting to Rs. 2,447.79 lakhs for earlier periods, although it is another form of subsidy, is accounted in the Statement of Profit and Loss and disclosed as an exceptional item. Exceptional item for the previous year includes settlement of claim against derivative and write off of insurance claim on aircraft.

1.3 Effective from 1st April, 2014 the company had charged depreciation based on the revised useful life of the assets as per the requirements of Schedule II of the Companies Act, 2013 and in certain cases on the basis of technical evaluation. Consequently, depreciation charged was lower by Rs. 477.28 lakhs for the previous year. Further, carrying value of the assets whose useful life was already exhausted as on 1st April,2014, amounting to Rs. 3,073.12 lakhs and deferred tax credit of Rs. 1,044.55 lakhs thereon has been recognised in the opening balance of Retained Earnings.

1.4 a) In terms of eligibility certificate and sanction letter received under Package Scheme of Incentives from Government of Maharashtra during the year, Industrial Promotion Subsidy of Rs. 8,614.80 lakhs in respect of the Company''s plant located at Ratnagiri, is accounted for as capital subsidy under Reserves and Surplus in the Balance Sheet.

b) The Company during the current year has paid off its sales tax deferral loan of Rs. 2,115.80 lakhs at the net present value of Rs. 1,059.12 lakhs and has taken the balance amount of Rs. 1,056.68 lakhs to the Statement of Profit and Loss under the heading other non operating income.

1.5 CSR Expenditure:

a) Amount required to be spent by the Company during the year is Rs. 317.24 lakhs.

b) Amount spent by the Company during the year is Rs. 352.83 lakhs.

1.6 Segment Reporting:

Primary Segment

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institue of Chartered

Accountants of India, the Company''s primary segments are PolyVinyl Chloride (PVC), Pipes & fittings and Power.

The above business segments have been identified considering :

i) The nature of the products

ii) The related risks and returns

iii) The internal financial reporting systems

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the segment .

Revenue and expenses , which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under "Net unallocable (expenditure)/income". Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Other than segment".


Mar 31, 2015

1.Share Capital

Terms/ Rights attached to equity shares:

The Company has only 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. 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 in the ensuing Annual General Meeting. During the year ended March 31, 2015, the amount of per share dividend recognised as distributed to equity shareholders was Rs. 2 (March 31,2014 Rs. 7)

In the event of liquidation of the company, the holders of equity shares are entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Terms of borrowings:

Terms of debenture

1,000 privately placed 10.90 % secured redeemable non-convertible debentures of Rs. 10 lakhs each, aggregating to Rs. 10,000 lakhs ("10.90% NCDs") will be redeemed in 3 years bullet from the date of allotment i.e. 31st December, 2013.

Terms of loan repayment

The term loan from Central Bank of India amounting to Rs. 10,000 lakhs was availed in the financial year 2011-12 and 2012-13 and carried interest at the Base rate of 10.25% 0.75 % p.a. The loan is repayable in 3 equal annual instalments starting from 31st March, 2015. From 01st Feb 2015, the interest rate has been changed to 10.25% 0.25% p.a.

The term loan from Bank of Maharashtra amounting to Rs. 5,000 lakhs was availed in the financial year 2013-14 at the Base interest rate of 10.25% 0.75% p.a. repayable in 12 quarterly instalments starting from January, 2015.

The term loan from Citibank NA amounting to Rs. 10,000 lakhs was availed in the financial year 2013-2014 at the interest rate of 10.75% p.a. From 1st July 2014, the rupee loan has been converted into USD loan at spot rate at the interest rate of 6 months USD libor 270 basis points repayable on 1st July 2015.

Nature of security for secured borrowings and working capital:

Debentures:

The outstanding amount payable on 10.90% NCDs of Rs. 10,000 lakhs with the interest accrued thereon but unpaid and all other costs, charges, expenses and fees payable to the debenture trustees namely Axis Trustee services Limited(ATSL) secured under the Debenture Trust deed and creation of simple mortgage on pari passu basis in favour of ATSL on immovable properties of the company falling within the battery limit of the site of the company's plant for the manufacture of PVC resin, situated at village Golap, district Ratnagiri in the state of Maharashtra together with all buildings and structures thereon and all plants and machinery attached to the earth or permanently fastened to anything attached to the earth.

Term Loans:

From Central Bank of India: The outstanding amount payable on term loan of Rs. 10,000 lakhs availed from Central Bank of India with all interest, liquidated damages, commitment charges, premia on prepayment, costs, expenses and other moneys and fees payable as applicable are secured by equitable mortgage created in favour of Central Bank of India, Pimpri, Pune by depositing all the documents of title, evidences, title deeds and writings in respect of immovable properties of the Company falling within the battery limit of Company's captive power plant situated at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

From Bank of Maharashtra: The outstanding amount payable on term loan of Rs. 5,000 lakhs availed from Bank of Maharashtra with all interest, liquidated damages, commitment charges, premia on prepayment, costs, expenses and other moneys and fees payable as applicable are secured by movable property of the Company viz., plant and machinery and other movable assets falling within the battery limit of the PVC manufacturing plant situated at Village Golap-Ratnagiri, District Ratnagiri, Maharashtra State.

From Citibank N.A.: The outstanding amount payable on term loan of Rs. 10,000 lakhs availed from Citibank N.A. with all interest, liquidated damages, commitment charges, premia on prepayment, costs, expenses and other moneys and fees payable as applicable are secured by:

Extension of second equitable mortgage, to be created in favour of Citibank by deposit of title deeds with Axis Bank Ltd., New Delhi ("ABL") on pari passu basis with other second charge holders, ABL acting as an agent of Citibank N.A. which ranks subsequent and subservient in rank of priority over the first equitable mortgages created / to be created by deposit of title deeds in respect of immoveable properties falling within the battery limit of the site of the Company's plant for manufacture of PVC Resin, situated at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

Working capital:

The aggregate limits of working capital borrowings of Rs. 1,39,575 lakhs from the Bank of India Consortium together with all interest, liquidated damages, costs, charges and other moneys payable under working capital consortium agreement/sanction letters are secured by:

(i) Hypothecation of inventories and book debts; and

(ii) Extension of second equitable mortgage, created in favour of Bank of India Consortium on pari passu basis with other second charge holder by deposit of title deeds with Axis Bank Ltd. (ABL), New Delhi. ABL acting as an agent for Bank of India Consortium, which ranks subsequent and subservient in rank of priority over the first equitable mortgages created by deposit of title deeds in respect of immoveable properties falling within the battery limit of the site of the Company's plant for manufacture of PVC Resin, situated at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

Amount Amount (Rs.In lakhs (Rs.In lakhs) 2014-15 2013-14

3. Contingent liabilities and commitments:

I) Claims against the Company not acknowledged as debt:

a) Liabilities in respect of income tax matters for which the Company 10.17 10.17 has succeeded in appeal but Income Tax Department has gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments

b) Liabilities in respect of income tax matters for which the Company has 930.29 910.97 gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments

c) Excise/Customs/Service Tax in respect of which either show cause notice is 6,322.90 5,702.89 received or the Company/Department is in appeal

d) Sales Tax matters in respect of which either show cause notice is received or 8,122.91 2,422.32 the Company/Department is in appeal

e) Amounts claimed by banks in respect of derivative transactions which 13,022.56 15,980.22 are under dispute not acknowledged as debt in USD 20,821,480/- (USD 26,671,840/-)

In view of counter claims of the Company against the banks, the facts and circumstances of the case and uncertainty of period for which the litigations will continue, a reliable estimate of the liability,if any, cannot be made. It is unlikely that there will be a material liability on the Company on this account in the near future. Therefore, in view of what is stated above no provision is required to be made out of the current year's profit.

The company has been legally advised in respect of this issue confirming the aforesaid.

Commitments:

Estimated amount of contracts remaining 104.89 927.28 to be executed on capital account and not provided for (net of capital advances)

4. Related Party Disclosures

Disclosures as required by Accounting Standard 18 ''related party disclosures'' are given below:

A) Names of related parties and nature of relationship where control exists

Name of the related party Nature of relationship

1. Pawas Port ltd. Substantial interest

B) Names of related parties with whom transactions have been entered into

Mr. Prakash P. Chhabria - Executive Chairman Key Management Personnel

Mr. Saurabh S. Dhanorkar - Managing Director Key Management Personnel

Mr. Sanjay S. Math - Director (Operations) Key Management Personnel

Finolex Cables Limited Associate Company

Finolex Plasson Industries Private Limited Associate Company

Finprop Advisory Services Limited Enterprises over which key

Magnum Machine Technologies Limited management personnel or their

relatives exercise significant

influence

5. Exceptional item includes foreign exchange loss (net) and settlement of claim against derivative Rs. 2,937.65 lacs (previous year Rs. 6,977.01 lacs) and write off of insurance claim on aircraft of Rs. 500 lacs (previous year Rs. Nil).

6. Effective from 1st April, 2014 the company has charged depreciation based on the revised useful life of the assets as per the requirements of Schedule II of the Companies Act, 2013 and in certain cases on the basis of technical evaluation. Consequently, depreciation charged is lower by Rs. 477.28 lakhs for the current year. Further, carrying value of the assets whose useful life was already exhausted as on 1st April,2014, amounting to Rs. 3,073.12 lakhs and deferred tax credit of Rs. 1,044.55 lakhs thereon has been recognised in the opening balance of Retained earnings.

7. Segment Reporting:

Primary Segment

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institue of Chartered Accountants of India, the Company's primary segments are PolyVinyl Chloride (PVC), Pipes & fittings and Power.

The above business segments have been identified considering :

i) The nature of the products

ii) The related risks and returns

iii) The internal financial reporting systems

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the segment . Revenue and expenses , which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under "Unallocable Expenses ". Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under " Unallocable Assets / Liabilities".


Mar 31, 2014

1.1 Contingent Liabilities and commitments: Rs In lakhs

Particulars 2013-14 2012-13

Claims against the Company not acknowledged as debt:

a) Liabilities in respect of income tax matters for which the Company has 10.17 179.38 succeeded in appeal but Income Tax Department has gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments

b) Liabilities in respect of income tax matters for which the Company has gone 910.97 436.23 in further appeal and exclusive of the effect of similar matters in respect of pending assessments

c) Excise/Customs/Service Tax in respect of which either show cause notice is 5,702.89 4,379.44 received or the Company/Department is in appeal

d) Sales Tax matters in respect of which either show cause notice is received 2,422.32 - or the Company/Department is in appeal

e) Amounts claimed by banks in respect of derivative transactions which are 15,980.22 14,478.81 under dispute not acknowledged as debt.

Claims in foreign exchange have been revalued at exchange rate as on Balance Sheet date.

In view of counter claims of the Company against the banks, the facts and circumstances of the case and uncertainty of period for which the litigations will continue, a reliable estimate of the liability,if any, cannot be made. It is unlikely that there will be a material liability on the Company on this account in the near future. Therefore, in view of what is stated above no provision is required to be made out of the current year''s profit. The company has been legally advised in respect of this issue confrming the aforesaid section.

f) Estimated amount of contracts remaining to be executed on capital account 927.28 1369.93 and not provided for (net off capital advances)

Basis used to determine the overall expected return:

Life Insurance Corporation of India (LIC) manages the investments of Employee Gratuity Scheme. Expected rate of return on investments is determined based on the assessment made by the LIC at the beginning of the year on the return expected on its existing portfolio, along with the estimated incremental investments to be made during the year. Yield on the portfolio is calculated based on a suitable mark-up over the benchmark Government securities of similar maturities.

1.2 Related party disclosures

Disclosures as required by accounting standard 18 ''''related party disclosures'''' are given below:

A) Names of related parties and nature of relationship where control exists

Name of the related party Nature of relationship

1. Pawas Port Ltd. Substantial interest

B) Names of related parties with whom transactions have been entered into

1. Mr. Prakash P. Chhabria - Executive Chairman

2. Mr. Saurabh S. Dhanorkar - Managing Director

3. Mr. Panyam Subramaniam - Assistant Managing Director & CFO Key management personnel (Upto 4th June, 2013)

4. Mr. Sanjay S. Math - Director Operations

5. Finolex Cables Limited Associate Company-

6. Finolex Plasson Industries Ltd. Signifcant Infuence

Enterprises over which key management personnel or their relatives exercise signifcant infuence

1. Finprop Advisory Services Ltd.

2. Magnum Machine Technologies Ltd. Signifcant Infuence

3. Kaya Software Pvt. Ltd.

1.3 Segment reporting:

Primary segment

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institute of

Chartered Accountants of India, the Company''s primary segments are PolyVinyl Chloride (PVC), Pipes & fittings and Power.

The above business segments have been identifed considering :

i) The nature of the products

ii) The related risks and returns

iii) The internal financial reporting systems

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable expenses". Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable assets / liabilities".


Mar 31, 2013

Note 1.1) Ministry of Corporate Affairs Government of India (MCA) notifcation on AS 11

Pursuant to circular No. 25/2012 dated 09.08.2012 issued by MCA, in respect of clarifcation on para 46A of notifcation number G.S.R 914(E) dated 29.12.2011 on accounting standard 11 relating to "The effects of changes in foreign exchange rates" the Company has capitalized exchange difference to the extent considered as borrowing cost debited to the proft and loss statement in the previous year. Accordingly, in the current fnancial year an amount of ? 320.83 lakhs has been capitalized. This amount includes 224.31 lakhs (net of depreciation of earlier year) credited to general reserve towards exchange difference previously recognised in the proft & loss statement.

The balance of foreign exchange difference capitalised pursuant to MCA notifcation on accounting standard 11 (AS 11) remaining to be depreciated over the balance life is ? 1286.76 lakhs. Note 1.2) Terms of debentures redemption:

500 privately placed secured redeemable non-convertible debentures of ? 10 lakhs each, aggregating to 5000 lakhs with LIC of India will be redeemed in three installments commencing at the end of 3rd, 4th and 5th year from the date of allotment i.e. 21st September, 2009 in the ratio of 3:3:4. 1000 privately placed secured redeemable non-convertible debentures of 10 lakhs each, aggregating to 10000 lakhs with LIC of India will be redeemed in full at par at the expiry of fve years from the date of allotment i.e. 17th November, 2008.

Note 1.2) Segment reporting:

Primary segment

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institue of Chartered Accountants of India, the Company''s primary segments are PolyVinyl Chloride (PVC), pipes & fttings and power.

The above business segments have been identifed considering :

i) The nature of the products

ii) The related risks and returns

iii) The internal fnancial reporting systems

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable expenses". Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable assets/liabilities".


Mar 31, 2012

Note 1.1) Contingent Liabilities and commitments:

i) Guarantees given by the Company's Bankers on behalf of the Company towards performance and other matters: Rs. 1421.44 lakhs (Rs. 1565.07 lakhs).

ii) Claims against the Company not acknowledged as debt:

a) Liabilities in respect of income tax matters for which the Company has suc- ceeded in appeal but Income Tax Department has gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments, Rs. 179.38 lakhs (Rs. 30.37 lakhs).

b) Liabilities in respect of income tax matters for which the Company has gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments, Rs. 412.22 lakhs (Rs. 887.75 lakhs).

c) Excise/Customs/Service Tax in respect of which either show cause notice is received or the Company/Department is in appeal, Rs. 2674.87 lakhs (Rs. 2435.29 lakhs).

d) Amounts claimed by banks in respect of derivative transactions which are under dispute not acknowledged as debt, Rs. 22254.30 lakhs (Rs. 23977.54 lakhs).

In view of counter claims of the Company against the Banks, the facts and circumstances of the case and uncertainty of period for which the litigations will continue, a reliable estimate of the obligation, if any, cannot be made. It is unlikely that there will be a material liability on the Company on this account in near future. Therefore, in view of what is stated above no provision is required to be made out of the current year's profit.

The Company has been legally advised in respect of this issue confirming the aforesaid action.

e) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance payments), Rs. 3317.09 lakhs (Rs. 1424.59 lakhs).

Note 1.2) Changes in Accounting Policy / Assumption:

a) Pursuant to notification dated 29th December, 2011 issued by Ministry of Corporate Affairs, Government of India in respect of changes to Accounting Standard 11, the Company has exercised the option of capitalizing exchange differences arising on reporting of long term foreign currency loans in so far as they relate to the acquisition of depreciable capital assets. Accordingly in the current financial year an amount of Rs. 1146.92 lakhs has been capitalized. This amount includes Rs. 986.20 lakhs credited to General Reserve towards exchange difference previously recognised in the profit & loss Account for the previous years. This amount will be depreciated from the date of capitalization over the remaining life of the asset. Had this change not been effected, the profit before tax for the year would have been lower by Rs. 123.00 lakhs, the Gross Block of assets would have been lower by Rs. 1146.92 lakhs and correspondingly depreciation would have been lower by Rs. 37.72 lakhs.

b) The balance of foreign exchange difference capitalised pursuant to above, remaining to be depreciated over the balance life is Rs. 1086.66 lakhs.

c) Liability on account of Leave encashment to employees was considered as short term compensation expense provided on actual basis upto 31st March 2011. The same has been considered on actuarial basis from 1st April 2011. Had this change not been effected, the profit before tax for the year would have been lower by Rs. 78.64 lakhs.

Note 1.3) Debentures: Terms of Redemption:

1000 Privately placed Secured Redeemable Non-Convertible Debentures ("Debentures") of Rs. 1,000,000 (Rupees ten lakhs only) each, aggregating Rs. 100 crore with LIC of India will be redeemed in full at par at the expiry of five years from the date of allotment i.e. 17th November, 2008.

500 Privately placed Secured Redeemable Non-Convertible Debentures of Rs. 1,000,000 (Rupees ten lakhs only) each, aggregating Rs. 50 crore with LIC of India will be redeemed in three equal instalments at par at the expiry of third, fourth and fifth year from the date of allotment i.e., 18th September, 2009.

Note 1.4) Security for Secured Loans:

(I) The outstanding amount payable on the debentures mentioned at Note 1.4 with the interest accrued thereon but unpaid and all other costs, charges, expenses and fees payable to the debenture trustees namely Axis Trustee Services Limited ("ATSL") under the Debenture Trust deed dated 16th February, 2009 for 12.25% NCDs of Rs.100 crore and Debenture Trust Deed dated 5th March, 2010 for 9.50% NCDs of Rs.50 crore respectively have been secured by creation of english mortgage on pari passu basis in favour of ATSL on the Company's immovable properties situate at 1B, 1st Floor, Mahakant Building, Ellisbridge, Ahmedabad in the State of Gujarat.

(II) The outstanding amount payable on the:

(a) 12.25% NCDs of Rs.100 crore redeemable on 17th November, 2013 i.e. after 5 years from deemed date of allotment 17th November, 2008;

(b) 9.50% NCDs of Rs.50 crore redeemable in 3 installments commencing at the end of 3rd, 4th and 5th year from the date of allotment i.e. 21st September, 2009 in the ratio of 3:3:4.

(c) Borrowings by way of foreign currency term loan availed from ICICI Bank Limited, Singapore Branch (the "ICICI Bank") in the year 2007-2008 at the interest rate of 1.37% p.a. repayable in 3 equal installments beginning from financial year 2011-2012 (accordingly the first installment has been paid), for which Axis Bank Limited (the "ABL") is acting as security trustee; and

(d) Borrowings by way of term loan availed from Central Bank of India, Pimpri Branch, Pune (the "Central Bank") at the interest rate of 11.75% p.a. repayable in 3 equal installments from the date of disbursement: together with all interest, liquidated damages, commitment charges, premia on prepayment or on redemption, costs, expenses and other moneys and fees payable as applicable under the respective Deeds and Agreement are secured by:

(a) equitable mortgage created in favour the ATSL and the ABL; and

(b) equitable mortgage to be created in favour of Central Bank: on pari passu basis by depositing with ABL, New Delhi, ABL acting for itself and as an agent of ATSL and Central Bank, all the documents of title, evidences, title deeds and writings in respect of immovable properties falling within the battery limit of the site of the Company's plant for manufacture of PVC, situate at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plants and machinery attached to the earth or permanently fastened to anything attached to the earth; and

(c) will be further secured by equitable mortgage to be created in favour the ATSL, ABL and the Central Bank on pari passu basis by depositing with ABL, New Delhi, ABL acting for itself and as an agent of ATSL and Central Bank, all the documents of title, evidences, title deeds and writings in respect of immovable properties falling within the battery limit of the Company's 43 MW power plant situate at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plants and machinery attached to the earth or permanently fastened to anything attached to the earth; and

(III) The aggregate limits of working capital borrowings of Rs. 139575 lakhs from the Bank of India Consortium together with all interest, liquidated damages, costs, charges, and other monies payable under working capital consortium agreement/sanction letters are secured by:

(a) Hypothecation of inventories and book debts; and

(b) by extension of second equitable mortgage created in favour of Bank of India Consortium by deposit of title deeds with ABL, ABL acting as an agent for Bank of India Consortium, which ranks subsequent and subservient in rank of priority over the first equitable mortgages created / to be created by deposit of title deeds in respect of immoveable properties falling within the battery limit of the site of the Company's plant for manufacture of PVC Resin, situate at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

Note 1.5) Sundry Creditors:

A) Outstandings to creditors other than Micro, Small & Medium Enterprise Rs. 12946.47 lakhs (Rs. 24017.23 lakhs ) [Interest Paid/Payable is Rs. Nil (Rs. Nil)]

B) Outstandings to Micro, Small & Medium Enterprise : Rs. 28.34 lakhs (Rs. 68.88 lakhs)

The Identification of suppliers as micro, small and medium enterprise Defined under "The Micro, Small and Medium Enterprises Development Act, 2006" was done on the basis of information to the extent provided by the suppliers of the Company. There were no outstanding dues to micro, small and medium enterprises which were outstanding for more than the stipulated period.

Note 1.6) Political contribution in terms of provisions of Section 293A of the Companies Act, 1956. Donation of Rs. 5.00 lakhs (Rs. Nil) paid to Shiv Sena, a Political party.

Note 1.7) Segment Reporting :

Primary Segment

Based on the guiding principle given in the Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India,the Company's primary segments are PolyVinyl Chloride ( PVC ), Pipes & fittings and Power.

The above business segments have been identified considering :

i ) The nature of the products

ii ) The related risks and returns

iii ) The internal financial reporting systems

Revenue and expenses have been accounted for on the basis of their relationship to the operating activities of the segment . Revenue and expenses , which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under "Unallocable Expenses ". Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under " Unallocable Assets / Liabilities".

Note 1.8) Related Party Disclosures :

Disclosures as required by the Accounting Standard 18 "Related Party Disclosures"are given below :

a) List of Related Parties

1 Finolex Cables Ltd. Key management personnel

2 Finolex Plasson Industries Pvt.Ltd. 1. Mr. P. P. Chhabria – Chairman

3 Finprop Advisory Services Ltd. 2. Mr. K. P. Chhabria – Executive Vice Chairman

4 Pawas Port Ltd. 3. Mr. Prakash P. Chhabria – Managing Director

5 Orbit Electricals Pvt.Ltd. 4. Mr. S. S. Dhanorkar – Assistant Managing Director & COO

6 Kaya Software Pvt.Ltd. 5. Mr. P. Subramaniam – Assistant Managing Director & CFO

Note 1.9)

During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. Revised Schedule VI has significantly impacted the presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet. The Company has reclassified previous year's figures to conform to this year's classification.


Mar 31, 2011

1) Contingent Liabilities:

i) Guarantees given by the Company Rs. 1565.07 Lakhs (Rs. 1923.31 Lakhs)

ii) Claims against the Company not acknowledged as debt:

a) Liabilities in respect of income tax matters for which the Company has succeeded in appeal but Income Tax Department has gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments, Rs. 30.37 Lakhs (Rs.30.37 Lakhs).

b) Liabilities in respect of income tax matters for which the Company has gone in further appeal and exclusive of the effect of similar matters in respect of pending assessments, Rs. 887.75 Lakhs (Rs. 887.75 Lakhs).

c) Excise/Customs/Service Tax in respect of which either show cause notice is received or the Company/Department is in appeal, Rs. 2435.29 Lakhs (Rs. 2478.44 Lakhs).

d) Amounts claimed by banks in respect of derivative transactions which are under dispute not acknowledged as debt Rs. 23977.54 Lakhs. (Rs. 29474.16 Lakhs).

2) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance payments), Rs. 1424.59 Lakhs (Rs. 2714.73 Lakhs).

3) A. Quantitative information of derivative instruments outstanding as at the balance sheet date:

B. The Company has entered into forward contract / option transactions with an objective to hedge the financial risks associated with its business viz. foreign exchange, interest rate.

C. The Company has not hedged the following foreign currency exposures:

i) Borrowings grouped under secured loans equivalent to Rs. 2301.70 lakhs (Rs. 3452.48 Lakhs) and under unsecured loans equivalent to Rs. 2268.55 Lakhs. (Rs. 15892.52 Lakhs).

ii) Creditors for imports equivalent to Rs. 8341.28 Lakhs (Rs. 12714.73 Lakhs).

4) Debentures: Terms of Redemption

1000 Privately placed Secured Redeemable Non-Convertible Debentures of Rs. 10,00,000 (Rupees ten lakhs) each ("1000 Debentures") will be redeemed in full at par at the expiry of five years from the date of allotment i.e. 17th November, 2008.

500 Privately placed Secured Redeemable Non-Convertible Debentures of Rs.10,00,000 (Rupees ten lakhs) each ("500 Debentures") will be redeemed in three equal instalments at par at the expiry of third, fourth and fifth year from the date of allotment i.e., 18th September, 2009.

5) Security for Secured Loans:

(I) The outstanding amount payable on the above referred “1000 Debentures" with the interest accrued thereon but unpaid and all other costs, charges, expenses and fees payable to the Axis Trustee Services Limited (“ATSL or “Trustees") under the Debenture Trust deed dated 16th February, 2009 and for “500 Debentures" under the Debenture Trust Deed dated 5th March, 2010 respectively have been secured by creation of english mortgage on pari passu basis in favour of Trustees on the Companys immovable properties situate at 1B, 1st Floor, Mahakant Building, Ellisbridge, Ahmedabad in the State of Gujarat.

(II) The above referred Debentures and the borrowing from ICICI Bank Limited, Singapore Branch (“ICICI Bank") [Axis Bank Ltd.(" Axis Bank") acting as Security Trustee of ICICI Bank] by way of foreign currency loan together with all interest, liquidated damages, commitment charges, premia on prepayment or on redemption, costs, expenses and other moneys and fees payable as applicable to the trustees under the Debentures Trust Deeds and Security Trustee Agreement have been secured by creating first equitable mortgage on pari passu basis in favour of the ATSL and the Axis Bank by depositing with Axis Bank, Axis Bank acting for itself as a Trustee of the above referred foreign currency loan of ICICI Bank and as an agent of ATSL, all the documents of title, evidences, title deeds and writings in respect of immovable properties falling within the battery limit of the site of the Companys plant for manufacture of PVC, situate at Village Golap, District Ratnagiri in the State of Maharashtra (“Title Deeds") together with all buildings and structures thereon and all plants and machinery attached to the earth or permanently fastened to anything attached to the earth.

(III)The aggregate limits of working capital borrowing of Rs. 139575 lakhs from the Bank of India Consortium together with all interest, liquidated damages, costs, charges, and other monies payable under working capital consortium agreement/sanction letters is secured by:

(a) Hypothecation of inventories and book debts.

(b) By extension of second equitable mortgage created in favour of Bank of India Consortium by deposit of Title Deeds with Axis Bank, Axis Bank acting as an agent for Bank of India Consortium, which ranks subsequent and subservient in rank of priority over the first equitable mortgages created / to be created by deposit of Title Deeds in respect of immoveable properties falling within the battery limit of the site of the Companys plant for manufacture of PVC Resin, situate at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

8) Sundry Creditors

A) Outstanding to creditors other than Micro, Small & Medium Enterprise Rs. 24017.23 lakhs (Rs. 18765.19 Lakhs) [Interest Paid/Payable is Nil ( Rs. Nil)

9) Donation includes political donation of Rs. Nil paid to political parties (Rs. 10 lakhs each paid to Nationalist Congress Party and Shiv Sena).

(19) Segment Reporting :

Primary Segment

Based on the guiding principle given in the Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India,the Companys primary segments are PolyVinyl Chloride ( PVC ), Pipes & fittings and Power.

The above business segments have been identified considering :

i ) The nature of the products

ii ) The related risks and returns

iii ) The internal financial reporting systems

Revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment . Revenue and expenses , which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under Unallocable Expenses. Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis , have been included under Unallocable Assets / Liabilities.

(20) Related Party Disclosures :

Disclosures as required by the Accounting Standard 18 " Related Party Disclosures " are given below : a) List of Related Parties

1 Finolex Cables Limited

2 Finolex Plasson Industries Limited

3 Finprop Advisory Services Limited

4 Pawas Port Limited

5 Akash-Tatva Investments Pvt Ltd.

6 Coated Fabrics Pvt Ltd.

7 Corrugated Box Industries (I) Pvt.Ltd.

8 Finolib Chemicals Pvt. Ltd.

9 Orbit Electricals Pvt Ltd.

10 Kaya Software Pvt. Ltd.

11 Devita Investments Pvt Ltd.

12 Mohini Investments Pvt Ltd.

13 Fino Communication Equipments Pvt Ltd.

14 K.P. Investments Pvt Ltd.

15 Majesty Investments Pvt Ltd.

16 Magnum Machines Pvt Ltd.

17 V.K.C. Investments Pvt Ltd.

18 Hi-Tech Poly Coatings Pvt Ltd.

19 Pratibha Xero-Graphic Impression Pvt Ltd.

Key management personnel

1 Mr. P. P. Chhabria - Chairman

2 Mr. K. P. Chhabria - Vice-Chairman

3 Mr. Prakash P. Chhabria - Managing Director

4 Mr. S. S. Dhanorkar -Wholetime Director

5 Mr. P. Subramaniam -Wholetime Director


Mar 31, 2010

1) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advance payments), Rs. 2714.73 lakhs (Rs. 2487.80 lakhs).

a. The Company has entered into derivative transactions with an objective to hedge the financial risks associated with its business, viz., foreign exchange, interest rate.

b. The Company has not hedged the following foreign currency exposures:

i) Borrowings grouped under secured loans equivalent to Rs. 3452.48 lakhs (Rs. 5,083.36 lakhs) and under unsecured loans equivalent to Rs. 15892.52

lakhs. (Rs. 22613.48 lakhs). ii) Creditors for imports equivalent to Rs. 12714.73 lakhs (Rs. 10049.51 lakhs).

2) Debentures: Terms of Redemption

1000 Privately placed Secured Redeemable Non-Convertible Debentures ("Debentures") of Rs. 10,00,000 (Rupees ten lakhs only) each will be redeemed in full at par at the expiry of five years from the date of allotment, i.e., 17th November, 2008.

500 Privately placed Secured Redeemable Non-Convertible Debentures of Rs. 10,00,000 (Rupees ten lakhs only) each will be redeemed in full at par at the expiry of five years from the date of allotment, i.e., 18,h September, 2009.

3) Security for Secured Loans:

(I) The outstanding amount payable on the above referred Debentures with the interest accrued thereon but unpaid and all other costs, charges, expenses and fees payable to the Axis Trustee Services Limited ("ATSL or "Trustees" for 1000 Debentures under the Debenture Trust deed dated 16th February, 2009 and for 500 Debentures under the Debenture Trust Deed dated 5th March, 2010 respectively) have been secured by creation of English mortgage on pari passu basis in favour of Trustees on the Companys immovable properties situate at IB, 1st Floor, Mahakant Building, Ellisbridge, Ahmedabad in the State of Gujarat.

(II) The above referred Debentures and the borrowings from ICICI Bank Limited, Singapore Branch ("ICICI Bank") (Axis Bank is acting as Security Trustee of ICICI Bank) by way of foreign currency loan together with all interest, liquidated damages, commitment charges, premia on prepayment or on redemption, costs, expenses and other moneys and fees payable as applicable to the trustees under the Debentures Trust Deeds and Security Trustee Agreement have been secured by creating equitable mortgage on pari passu basis in favour Axis Bank and the ATSL by depositing with Axis Bank, Axis Bank acting for itself as a Trustee of the above referred foreign currency loan of ICICI Bank and as an agent of ATSL, all the documents of title, evidences, title deeds and writings in respect of immovable properties falling within the battery limit of the site of the Companys plant for manufacture of PVC, situate at Village Golap, District Ratnagiri in the State of Maharashtra ("Title Deeds") together with all buildings and structures thereon and all plants and machinery attached to the earth or permanently fastened to anything attached to the earth.

(Ill) The aggregate limits of working capital borrowing of Rs. 129575 lakhs from the Bank of India Consortium together with all interest, liquidated damages, costs, charges, and other monies payable under working capital consortium agreement/sanction letters are secured by:

(a) Hypothecation of inventories and book debts.

(b) By extension of second equitable mortgage created in favour of Bank of India Consortium by deposit of Title Deeds with Axis Bank, Axis Bank acting as an agent for Bank of India Consortium, which ranks subsequent and subservient in rank of priority over the first equitable mortgages created/to be created by deposit of Title Deeds in respect of immoveable properties falling within the battery limit of the site of the Companys plant for manufacture of PVC Resin, situate at Village Golap, District Ratnagiri in the State of Maharashtra together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth.

4) Sundry Creditors

A) Outstanding to creditors other than Micro, Small & Medium Enterprise Rs. 18765.19 lakhs (Rs. 17687.58 lakhs) [Interest Paid/Payable is Rs. Nil (Rs. Nil)].

B) Outstanding to Micro, Small & Medium Enterprise: Rs. 39.44 lakhs (Rs. 90.46 lakhs)

The identification of suppliers as "Micro, Small and Medium Enterprises Development Act, 2006" was done on the basis of information to the extent provided by the suppliers of the company. Total outstanding dues of Micro, Small and Medium which were outstanding more than stipulated period are given below.

5) Donation includes political donation of Rs. 10 lakhs each (Nil) paid to Nationalist Congress Party and Shiv Sena.

6) Segment Reporting:

Primary Segment

Based on the guiding principle given in the Accounting Standard - 17 "Segment

Reporting" issued by the Institute of Chartered Accountants of India, the Companys primary segments are Polyvinyl Chloride ( PVC ) and Pipes & fittings.

The above business segments have been identified considering:

i) The nature of the products

ii) The related risks and returns

iii) The internal financial reporting systems

Revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Expenses". Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets/Liabilities".

7) Figures in respect of the previous year have been regrouped or rearranged wherever necessary to conform to the current periods classification.

Find IFSC