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Notes to Accounts of Panama Petrochem Ltd.

Mar 31, 2018

1. Company Information

Panama Petrochem Limited (“the Company”) is a public limited Company domiciled in India. The registered office ofthe Company is at Plot No. 3303, GIDC Estate, Ankleshwar 393002, Gujarat, India and corporate office at 401, Aza House, Turner Road, Bandra West, Mumbai 400050. The Company was incorporated on 9 March 1982.

The Company is engaged in the manufacture of specialty petroleum products for diverse user industries like printing, textiles, rubber, pharmaceuticals, cosmetics, power and other industrial oil.

The equity shares of the Company are listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. The Global Depository Receipts (GDRs) of the Company are listed on the Luxembourg stock exchange.

Authorisation of financial statements

The standalone financial statements were authorised for issue in accordance with a resolution of the Board of Directors passed on 25 May 2018.

a) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share, however the holders of global depository receipts (GDR’s) do not have any voting rights in respect of shares represented by the GDR’s till the shares are held by the custodian bank. The company declares and pays dividends 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.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets in proportion to the number of equity shares held by the shareholders.

*The company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development Act, 2006, by obtaining confirmations from all suppliers. Information has been collated only to the extent of information received as at the balance sheet date.

2. Segment Information

A. Factors used to identify the entity’s reportable segments, including the basis of organisation

For management purposes, as the Company is in the business of manufacturing and trading of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of Indian Accounting Standard 108.

The Managing Director (MD) evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by operating segment. The MD reviews revenue and gross profit as the performance indicator for the operating segment. However, the Company’s finance (including finance cost and finance income) and income taxes are managed on a company as a whole basis and are not allocated to any segment.

Geographical segment of the organisation

For the purpose of geographical segment the sales are divided into two segments - within India and outside India The accounting policies of the segments are the same as those described in Note 2 (O)

B. Information about reportable segment

The following table shows the distribution of the Company’s reportable segment by geographical market, regardless of where the goods were produced:

3. Details of related party transactions in accordance with Ind AS 24 ‘Related Party Disclosures’ (a) Names of related parties with whom transactions have taken place during the year

Key Management Personnel

Amirali E Rayani Amin A Rayani Samir Rayani Hussein Rayani

Relatives of key management personnel

Akbarali Rayani (Brother of Mr. Amirali E Rayani)

Vazirali Rayani (Brother of Mr. Amirali E Rayani)

Salimali Rayani (Brother of Mr. Amirali E Rayani)

Arif Rayani (Brother of Mr. Amin Rayani)

Nilima Kheraj (Sister of Mr. Samir Rayani)

Munira Rayani (Wife of Mr. Hussein Rayani)

Iqbal Rayani (Brother of Mr. Hussein Rayani)

Subsidiary ( Wholly owned )

Panol Industries RMC FZE, UAE

The shareholders in the 35th Annual General Meeting held on 18 Sept 2017 approved the issue of bonus shares in the ratio of one equity share of Rs. 2/- each for two existing share of Rs. 2/- each held and accordingly the Company has allotted 2,01,64,533 number of equity shares on 5th October 2017. Pursuant to above, earnings per share (both basic and diluted) for the year ended and comparative period has been calculated after adjustment of number of bonus share issued in compliance with para 64 of Indian Accounting Standard (Ind AS)-33.

4. Financial Instruments : Accounting classifications and fair value measurements

(i) Accounting classifications

The fair values of the financial assets and liabilities are determined 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:

The carrying amounts of trade receivables, cash and cash equivalents, bank balances, short term deposits, trade payables, payables for acquisition of property, plant and equipment, short term loans from banks, financial institutions and other current financial assets and liabilities are considered to be the same as their fair values, due to their shortterm nature.

(ii) Fair value measurements

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The following table presents carrying value and fair value of financial instruments by categories and also fair value hierarchy of assets and liabilities measured at fair value :

During the reporting period ending 31st March, 2017 and 31st March, 2016, there were no transfers between Level 1 and Level 2 fair value measurements and no transfer into and out of Level 3 fair value measurements.

5. Financial risk management Risk management framework

The Company has identified financial risks and categorised them in three parts viz. (i) Credit Risk, (ii) Liquidity Risk and (iii) Market Risk. Details regarding sources of risk in each such category and how Company manages the risk is explained in following notes:

(i) Credit risk

Credit risk refers to the possibility of a customer and other counter parties not meeting their obligations and terms and conditions which would result into financial losses. Such risk arises mainly from trade receivables and investments. Credit risk is managed through internal credit control mechanism such as credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

Trade receivables

As per the credit policy of the Company, generally no credit are given exceeding the accepted credit norms. The Company deals with large corporate houses and State Electricity Boards after considering their credit standing. The credit policy with respect to other customers is strictly monitored by the Company at periodic intervals. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers. In addition, for amounts recoverable on exports, the Company has adequate insurance to mitigate overseas customer and country risk.

The Company uses an allowance matrix to measure the expected credt losses of trade receivables (which are considered good). The following table provides information about the exposure to credit risk and loss allowance (including expected credit loss provision) for trade receivables:

Cash and cash equivalents

The Company held cash and cash equivalents of Rs. 2453.22 lakhs at 31.3.2018 (31.3.2017: Rs. 1005.42 lakhs, 1.4.2016 : Rs. 818.71 lakhs). The cash and cash equivalents are held with banks with good credit ratings. Also, the Company invests its surplus funds in bank fixed deposits, which carry no / low mark to market risks for short duration and therefore, does not expose the Company to credit risk.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Derivatives

The forward contracts were entered into with banks having an investment grade rating and exposure to counterparties is closely monitored and kept within the approved limits.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations on due date. The Company has a strong focus on effective management of its liquidity to ensure that all business and financial commitments are met on time. This is ensured through proper financial planning with detailed annual business plans, discussed at appropriate levels within the organisation. Annual business plans are divided into quarterly plans and put up to management for detailed discussion and an analysis of the nature and quality of the assumptions, parameters etc. Daily and monthly cash flows are prepared, followed and monitored at senior levels to prevent undue loss of interest and utilise cash in an effective manner. Cash management services are availed to avoid any loss of interest on collections. In addition, the Company has adequate borrowing limits with reputed banks in place duly approved.

a) Financing arrangements

The Company has an adequate fund and non-fund based limits lines with various banks. The Company’s diversified source of funds and strong operating cash flow enables it to maintain requisite capital structure discipline. The financing products include working capital loans, buyer’s credit loan, supplier’s credit loan etc.

b) Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows within one year

(iii) Market Risk

The risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market price. Market risk further comprises of (a) Currency risk, (b) Interest rate risk and (c) Commodity risk.

a) Currency Risk

The Company is exposed to currency risk mainly on account of its import payables and export receivables in foreign currency. The major exposures of the Company are in U.S. dollars. The Company hedges its import foreign exchange exposure partly through exports and depending upon the market situations partly through forward foreign currency covers. The Company has a policy in place for hedging its foreign currency exposure. The Company does not use derivative financial instruments for trading or speculative purposes.

The table below shows sensitivity of open forex exposure to USD / INR movement. We have considered 1% ( /-) change in USD / INR movement, increase indicates appreciation in USD / INR whereas decrease indicates depreciation in USD / INR. The indicative 1% movement is directional and does not reflect management forecast on currency movement.

Impact on profit or loss due to % increase / (decrease) in currency

b) Interest rate risk

The Company is not exposed to significant interest rate risk during the respective reporting periods. Short term loans are taken on fixed interest rates.

c) Commodity Risk Raw Material Risk

“Timely availability and also non-availability of good quality base oils from across the globe could negate the qualitative and quantitative production of the various products of the Company. Volatility in prices of crude oil and base oil is another major risk for this segment. The Company procures base oils from various suppliers scattered in different parts of the world. The Company tries to enter into long term supply contracts with regular suppliers and at times buys the base oils on spot basis.”

Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

6. First time adoption of Ind AS

6.1 Mandatory exceptions, optional exemptions Transition to Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS. For the year ended 31st March, 2017, the Comapny had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2014, notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Act (‘IGAAP’). The accounting policies set out in Note 2 have been applied in preparing these Financial Statements for the year ended 31st March, 2017 and the opening Ind AS Balance Sheet on the date of transition (i.e. 1st April, 2016). In preparing its Ind AS Balance Sheet as at 1st April, 2016 and in presenting the comparative information for the year ended 31st March, 2017, the Company has adjusted amounts previously reported in the Financial Statements prepared in accordance with IGAAP. This note explains the principal adjustments made by the Comapny in restating its Financial Statements prepared in accordance with IGAAP, and how the transition from IGAAP to Ind AS has impacted the Company financial position, financial performance and cash flows.

Exemptions and exceptions availed

In preparing the Financial Statement, the Company has availed the below mentioned optional exemptions and mandatory exceptions.

A. Exceptions :

1. Classification and measurement of financial assets

As permitted under Ind AS 101, the Company has determined the classification offinancial assets based on facts and circumstances that exist on the date oftransition. In line with Ind AS 101, measurement offinancial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

2. Estimates

Ind AS estimates as at 1st April, 2016 are consistent with the estimates as at the same date made in conformity with IGAAP. Company has made estimates for following items in accordance with Ind AS at the date of transition as these were not required under IGAAP:

- investment in equity instruments carried at FVTOCI;

- impairment offinancial assets based on expected credit loss model;

- determination ofthe discounted value for financial instruments carried at amortised cost.

B. Optional exemptions : Property, plant and equipment and intangible assets

The Company has availed the exemption available under Ind AS 101 to continue the carrying value for all of its property, plant and equipment and intangible assets as recognised in the Financial Statements as at the date of transition to Ind AS, measured as per the IGAAP and use that as its deemed cost as at the date of transition (1st April, 2016).

6.2 Notes to the reconciliations

1 Property, plant and equipment:

Under previous GAAP, there was no requirement to present investment property separately and the same was included under tangible fixed assets (buildings) and measured at cost less accumulated depreciation. Under Ind AS, investment property is required to be presented separately in the balance sheet and depreciation is charged on it. Accordingly, the carrying amount of investment property as at 1st April, 2016 of Rs. 578.63 lakhs and as at 31st March, 2017 of Rs. 578.63 lakhs (before considering depreciation) under previous GAAP has been reclassified to a separate line item on the face ofthe balance sheet. There is no impact on the statement of profit and loss.

2 Fair valuation of investments:

Under previous GAAP, long term investments were measured at cost less diminution in the value which is other than temporary. Under Ind AS, these assets are classified as financial assets measured at fair value through profit or loss (FVOCI). On the date of transition to Ind AS, these financial assets have been measured at their fair value which is lower/higher than the cost as per previous GAAP, resulting in an decrease in the carrying amount by Rs. (4.69) lakhs as at 1st April, 2016 and increase by Rs. 4.01 lakhs as at 31st March, 2017.

3. Trade receivables:

Under Indian GAAP, the Company has created provision for impairment of receivables only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Credit Loss (ECL) model. Due to ECL model, the Comapny impaired its trade receivable by Rs. 35.67 lakhs on 1st April, 2016 which has been eliminated against retained earnings. The impact of Rs. (6.59) lakhs for year ended on 31st March, 2017 has been recognised in the statement of profit and loss. Moreover, all trade receivables are now classified as current financial assets as per Ind AS.

4. Other Comprehensive income:

Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains or losses are required to be presented in other comprehensive income.

5. Dividend (including dividend tax):

Under previous GAAP, proposed dividends including Dividend Distribution Tax (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the company, the declaration of dividend occurs after period end. Therefore, the short term provision of Rs. 243.84 lakhs (including DDT) for the year ended on 31st March, 2016 recorded for dividend has been derecognised against retained earnings on 1st April, 2016.

6. Employee benefits:

“Both under Indian GAAP and Ind AS, the Comapny recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements are to be recognised under other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss. On the date of transition, this change does not affect total equity. “

7. Deferred tax:

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in co-relation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax assets is of Rs. 176.29 lakhs with corresponding impact on retained earning. For the year ended 31st March, 2017, deferred tax expenses are reduced by Rs. (57.38) lakhs.

8. Revenue:

Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented on the face of the statement of profit and loss. The change does not affect total equity as at 1st April, 2016 and 31st March, 2017, profit before tax or total profit for the year ended 31st March, 2018.

9. As per Ind AS, cash and cash equivalents are shown as a separate item and other bank balances are shown separately.

10. As per Ind AS, certain assets and liabilities are reclassified as financial assets or liabilities based on the recognition criteria for financial asset or financial liability.

7. Previous year figures

The company has reclassified previous year figures to conform to this year’s classification.


Mar 31, 2017

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is entitled to one vote per share, however the holders of global depository receipts (GDR''s) do not have any voting rights in respect of shares represented by the GDR''s till the shares are held by the custodian bank. The company declares and pays dividends 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.

The amount of per share dividend recognized as distributions to equity shareholders is '' 1.00 (31 March 2016 : '' 0.50 )

In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets in proportion to the number of equity shares held by the shareholders.

* The company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development Act, 2006, by obtaining confirmations from all suppliers. Information has been collated only to the extent of information received as at the balance sheet date.

1. Employee Benefits

General Description of Defined Benefit plan Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

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

The Company expects to contribute Rs, 3.72 lakhs to gratuity in the next year (31 March 2016 : Rs, 3.19 lakhs)

2. Segment Information Business Segments :

As the Company is in the business of manufacturing and trading of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17.

Geographical Segments :

The following table shows the distribution of the Company''s sales by geographical market, regardless of where the goods were produced:

Notes :

Geographical Segment :

a) For the purpose of geographical segment the sales are divided into two segments - within India and outside India.

b) The accounting policies of the segments are the same as those described in Note 2

3. Related party disclosures as required under AS-18, "Related Party Disclosures", are given below:

(a) Names of related parties with whom transactions have taken place during the year

Key Management Personnel

Amirali E Rayani

Amin A Rayani

Samir Rayani

Hussein Rayani

Relatives of key management personnel

Akbarali Rayani (Brother of Mr. Amirali E Rayani)

Vazirali Rayani (Brother of Mr. Amirali E Rayani)

Salimali Rayani (Brother of Mr. Amirali E Rayani)

Arif Rayani (Brother of Mr. Amin Rayani)

Nilima Kheraj (Sister of Mr. Samir Rayani)

Munira Rayani (Wife of Mr. Hussein Rayani)

Iqbal Rayani (Brother of Mr. Hussein Rayani)

Subsidiary

Panol Industries RMC FZE, UAE

4. Taxation

Minimum Alternate Tax (MAT) :- The Company has during the year, provided the current year tax liability of Rs, 2075.00 lakhs (31 March 2016 Rs, 986.41 lakhs) calculated in accordance with the normal rate of income of tax. The MAT credit entitlement of Rs, 16.32 lakhs (31 March 2016 Rs, 103.52 lakhs) has been availed for the year ended 31 March 2017 which has been assessed and paid during the year against the MAT liablity of Rs, 10.84 lakhs for the F.Y. 2011-12 and Rs, 5.49 lakhs for the F.Y. 2013-14, respectively.

5. Transfer Pricing

Transactions with related parties are governed by transfer pricing regulations of the Indian Income-tax Act, 1961. Management believes that the Company''s transactions with related parties entered into during the year and previous year are at arm''s length and that the transfer pricing legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

6. Disclosure as per clause 32 of the Listing Agreement

Particulars in respect of loans and advances to subsidiary companies:

* Permitted receipts includes cash withdrawn from bank

For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

7. Previous year figures

The company has reclassified previous year figures to conform to this year''s classification.


Mar 31, 2016

b. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of '' 2 per share. Each holder of equity shares is entitled to one vote per share, however the holders of global depository receipts (GDR''s) do not have any voting rights in respect of shares represented by the GDR''s till the shares are held by the custodian bank (Refer Note 35). The company declares and pays dividends 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.

The amount of per share dividend recognized as distributions to equity shareholders is '' 0.50 (31 March 2015 : '' 2 )

In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets in proportion to the number of equity shares held by the shareholders.

Terms of Securities and repayment

Cash credit from banks is secured against the hypothecation of Stocks, Book debts and Plant & Machineries (both present & future), Pledge of Fixed Deposit Receipts, Further secured by Equitable Mortgage of Company''s present Immovable Property situated at Ankleshwar, Daman, Marol industrial estate, property of group companies situated at Navi Mumbai, property belonging to the Directors and corporate guarantee given by Anirudh Distributors Private Limited (Refer Note 41). The cash credit is repayable on demand and carried an interest rate of 11.75% to 13.75% p.a.

# Excise duty on sales amounting to Rs, 5,697.42 lakhs (31 March 2015 : Rs, 6,206.40 lakhs) has been reduced from sales in profit and loss statement and excise duty on increase/(decrease) in stock amounting to Rs, 2.27 lakhs (31 March 2015 : Rs, (24.94) lakhs) has been considered as expense/(income) in note 22 of the financial statements.

1. Shares Split Information

a. Pursuant to resolution passed at the Annual General Meeting of the company held on 4 September 2014, the Company sub-divided its shares of face value of Rs, 10 each into five shares of Rs, 2 each. Accordingly as per resolution, read with amendments made to Memorandum of Association as required by Companies Act, 2013. Authorized share capital of the company stands at Rs, 2,555 lakhs i.e. 1,277.5 lakhs shares of Rs, 2 each.

b. Each GDR of the company, representing five equity shares of Rs, 10 each, post stock split , now has underlying One GDR representing twenty five equity shares of face value of Rs, 2 each.

2. Employee Benefits

General Description of Defined Benefit plan Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

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

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

The overall expected rate of return on assets is determined based on the market prices prevailing as on that date, applicable to the period over which the obligation is expected to be settled.

3. Segment Information Business Segments :

As the Company is in the business of manufacturing and trading of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17.

Geographical Segments :

The following table shows the distribution of the Company''s sales by geographical market, regardless of where the goods were produced:

Geographical Segment :

a) For the purpose of geographical segment the sales are divided into two segments - within India and outside India.

b) The accounting policies of the segments are the same as those described in Note 2

41. Related party disclosures as required under AS-18, "Related Party Disclosures", are given below:

(a) Names of related parties with whom transactions have taken place during the year

Key Management Personnel

Amirali E Rayani

Amin A Rayani

Samir Rayani

Hussein Rayani

Relatives of key management personnel

Akbarali Rayani (Brother of Mr. Amirali E Rayani)

Vazirali Rayani (Brother of Mr. Amirali E Rayani)

Salimali Rayani (Brother of Mr. Amirali E Rayani)

Arif Rayani (Brother of Mr. Amin Rayani)

Nilima Kheraj (Sister of Mr. Samir Rayani)

Munira Rayani (Wife of Mr. Hussein Rayani)

Iqbal Rayani (Brother of Mr. Hussein Rayani)

Subsidiary

Panol Industries RMC FZE, UAE

4. Taxation

Minimum Alternate Tax (MAT) :- The Company has during the year, provided the current year tax liability of Rs, 986.41 lakhs (31 March 2015 Rs, 369.09 lakhs) calculated in accordance with the normal rate of income of tax. The MAT credit entitlement of Rs, 103.52 lakhs (31 March 2015 Rs, 184.28 lakhs) has been availed for the year ended 31 March 2016, which is disclosed under ''Loans and advances''.

5. Transfer Pricing

Transactions with related parties are governed by transfer pricing regulations of the Indian Income-tax Act, 1961. Management believes that the Company''s transactions with related parties entered into during the year and previous year are at arm''s length and that the transfer pricing legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.


Mar 31, 2015

A. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 2 per share (2014: Rs. 10 per share). Each holder of equity shares is entitled to one vote per share, however the holders of global depository receipts (GDR's) do not have any voting rights in respect of shares represented by the GDR's till the shares are held by the custodian bank (Refer Note 35). The company declares and pays dividends 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.

The amount of per share dividend recognized as distributions to equity shareholders is Rs. 2 (face value Rs. 2) [31 March 2014 : Rs. 6 (face value Rs. 10)]

In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets in proportion to the number of equity shares held by the shareholders.

Terms of Securities and repayment

Cash credit from banks is secured against the hypothecation of Stocks, Book debts and Plant & Machineries (both present & future), Pledge of Fixed Deposit Receipts, Further secured by Equitable Mortgage of Company's present Immoveable Property situated at Ankleshwar, Daman, Marol industrial estate, property of group companies situated at Navi Mumbai, property belonging to the Directors and corporate gurantee given by Anirudh Distributors Private Limited (Refer Note 43). The cash credit is repayable on demand and carried an interest rate of 12% to 16% p.a

31 March 2015 31 March 2014 Rs. In lakhs Rs. In lakhs

2. Contingent Liabilities

i) Service tax Matter disputed with the Deputy Commissioner of Service Tax (Dispute regarding demand raised on service tax payable on interest on usance charges for the period September 2008 to March 2013) 80.71 58.25

ii) Excise duty Matter disputed with the Commissioner of Central Excise, Customs & Service Tax, Daman,(Dispute regarding demand raised on excise duty not recovered on freight charged to customers) 99.64 99.64

iii) Custom duty Matter disputed Customs, Excise and Service Tax Appellate Tribunal, Mumbai, (Dispute regarding demand raised for classification of product) 126.70 126.70

iv) Bank Gurantees 546.17 339.60

(The contingent liabilities, if materialized, shall entirely be borne by the company, as there is no likely reimbursement from any other party.)

3. Current Liabilities & Provisions

In the opinion of the Board, adequate provision has been made for all known liabilities and the same is not in excess of the amounts considered reasonably necessary.

4. Current assets, loans and advances

In the opinion of the Board, the current assets, loans and advances have value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet.

5. Shares Split Information

a. Pursuant to resolution passed at the Annual General Meeting of the company held on 4 September 2014, the Company sub-divided its shares of face value of Rs. 10 each into five shares of Rs. 2 each. Accordingly as per resolution, read with amendments made to Memorandum of Assocation as required by Companies Act, 2013. Authorized share capital of the company stands at Rs. 2,555 lakhs i.e. 1,277.5 lakhs shares of Rs. 2 each as compared to 255.5 lakhs shares of Rs. 10 each last year.

b. Each GDR of the company, representing five equity shares of Rs. 10 each, post stock split, now has underlying One GDR representing twenty five equity shares of face value of Rs. 2 each.

c. Consequently, the earning per share has been restated for the previous year based on the number of equity shares post split, in accordance with Accounting Standard (AS-20) on "Earnings Per Share".

6. In accordance with section 77A, 77AA and 77B of the Companies Act, 1956 and in pursuant to the buy-back announcement dated 1 March 2013, the Company bought back a total of 5,53,522 Equity Shares during the period 14 February 2013 to 13 February 2014. All the shares have been duly extinguished before 31 March 2014. Consequently, an amount of Rs. 55.36 lakhs, being the nominal value of equity shares bought back had been transferred to Capital Redemption Reserve from the Profit and Loss Statement upto 31 March 2014. Further, a total amount of Rs. 732.61 lakhs being the premium on buy-back had also been appropriated from General Reserve upto 31 March 2014.

7. Global Depository Receipts ('GDRs') issue

On 20 July 2011, the Company raised US $ 1,39,99,985 (Rs. 6,233.79 lakhs) through issuance of 4,91,469 GDRs representing 24,57,345 equity shares of Rs. 10 each at a price of Rs. 253.68 per equity share of Rs. 10 each. The issue price of each GDR is US $ 28.486 and the GDRs are listed on the Luxembourg Stock Exchange. The holders of GDR do not have voting rights with respect to the shares represented by the GDRs, but rank pari passu with the existing share holders in all respect including entitlement of dividend declared. The Company has paid Rs. Nil (31 March 2014 : Rs. 11.49 lakhs) on account of issue expenses towards the issue of Global Depository Receipts , which has been incurred for issue of GDR, and same has been adjusted against Securities Premium during the previous year.

8. Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof : Rs. 57.78 Lakhs is included in donation and charity.

9. Employee Benefits

General Description of Defined Benefit plan Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

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

10. Segment Information Business Segments :

As the Company is in the business of manufacturing and trading of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17.

Geographical Segments :

The following table shows the distribution of the Company's sales by geographical market, regardless of where the goods were produced:

11. Related party disclosures as required under AS-18, "Related Party Disclosures", are given below: (a) Names of related parties with whom transactions have taken place during the year Key Management Personnel

Amirali E Rayani Amin A Rayani Samir Rayani

Relatives of key management personnel

Akbarali Rayani (Brother of Mr. Amirali E Rayani)

Vazirali Rayani (Brother of Mr. Amirali E Rayani)

Salimali Rayani (Brother of Mr. Amirali E Rayani)

Arif Rayani (Brother of Mr. Amin Rayani)

Nilima Kheraj (Sister of Mr. Samir Rayani)

Subsidiary

Panol Industries RMC FZE, UAE

Enterprises owned or significantly influenced by key management personnel or their relatives

Anirudh Distributors Private Limited

12. Taxation

Minimum Alternate Tax (MAT) :-The Company has during the year, provided the current year tax liability of Rs. 369.09 lakhs (previous year Rs. 429 lakhs) calculated in accordance with the normal rate of income of tax. However, the tax liability for the previous year is calculated as per the provisions of Section 115JAA of the Income Tax Act, 1961. The MAT credit entitlement of Rs. 182.25 lakhs has been reversed during the year and Rs. 76.62 lakhs has been availed for the year ended 31 March 2015, which is disclosed under 'Loans and advances'

13. Previous year figures

The company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2014

1. Employee benefits

General Description of Defined benefit plan

Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to ffteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

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

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

The over all expected rate of return on assets is determined based on the market prices prevailing as on that date, applicable to the period over which the obligation is expected to be settled.

2. Segment Information

Business Segments:

As the Company is in the business of manufacturing and trading of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17.

31 March 2014 31 March 2013 Rs. In lakhs Rs. In lakhs

3. Contingent Liabilities

i) Service tax Matter disputed with the Deputy Commissioner of Service Tax (Dispute regarding demand raised on service tax payable on interest on usance charges for the period September 2008 to March 2014) 58.25 10.88

ii) Bank Gurantees 339.60 259.86

(The contingent liabilities, if materialized, shall entirely be borne by the company, as there is no likely reimbursement from any other party.)

4. Related party disclosures as required under AS-18, "Related Party Disclosures'', are given below: (a) Names of related parties with whom transactions have taken place during the year Key Management Personnel

Amirali E Rayani

Amin A Rayani

Samir Rayani

Hussein Rayani (Resigned w.e.f. 25/03/2013)

Relatives of key management personnel

Akbarali Rayani (Brother of M r. Amirali E Rayani) Vazirali Rayani (Brother of Mr. Amirali E Rayani) Salimali Rayani (Brother of Mr. Amirali E Rayani)

41. In accordance with section 77A, 77AA and 77B of the Companies Act, 1956 and pursuant to the buy back announcement made by the Company on 1st March 2013, the Company has bought back from open market through stock exchanges 541,757 (31 March 2013 : 11,765) equity shares of Rs. 10 each during the year for a total consideration of Rs. 772.08 lakhs (31 March 2013 : Rs. 15.88 lakhs) of this, the Company has extinguished 550,322 (31 March 2013 : 3,200) equity shares have been extinguished. Consequently, an amount of Rs. 32.90 lakhs (31 March 2013 : Rs. 1.18 lakhs) being the nominal value of equity shares bought back has been transferred to Capital Redemption Reserve from profit & loss account. An amount of Rs. 717.91 lakhs (31 March 2013 : Rs. 14.70 lakhs) being the premium on buyback has been appropriated from General Reserve.

5. Taxation

Minimum Alternate Tax (MAT) :-The Company has during the year, provided the current year tax liability of Rs. 429 lakhs (previous year Rs. 260 lakhs) calculated in accordance with the provisions of Section 115JAA of the Income Tax Act, 1961. The MAT credit entitlement of Rs. 47.66 lakhs has been reversed during the year and availed Rs. 311.66 lakhs has been availed for the year ended March 31 2013, which is disclosed under ''Loans and advances''.

6. Previous year figures

The company has reclassified previous year figures to conform to this year''s classification.


Mar 31, 2013

1. Corporate Information

Panama Petrochem Limited (the company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company is engaged in the manufacture of specialty petroleum products for diverse user industries like printing, textiles, rubber, pharmaceuticals, cosmetics, power and other industrial oil.

2. Basis of preparation

The fnancial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these fnancial statements to comply in all material respects with the Accounting Standards notifed by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The fnancial statements have been prepared under the historical cost convention.

The accounting policies adopted in the preparation of fnancial statements are consistent with those of previous year.

3. Employee Benefts

General Description of Defned Beneft plan Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the beneft equivalent to ffteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The beneft vests after fve years of continuous service.

The following tables summaries the components of net beneft expense recognized in the statement of proft and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

4. Leases

Operating Lease: company as lessee

The Company has entered into arrangements for taking on leave and license basis certain offce premises and warehouses. The specifed disclosure in respect of these agreements is given below :

5. Segment Information

Business Segments:

As the Company is in the business of manufacturing of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17.

Geographical Segments :

The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced:

6. Contingent Liabilities

31 March 31 March 2013 2012 Rs. In Lakhs Rs. In Lakhs

i) Service tax Matter disputed 10.88 10.88

with the Deputy Commissioner of Service Tax

(Dispute regarding demand raised on service tax payable on interest on usance charges for the period September 2008 to November 2009)" 10.88 10.88

(The contingent liabilities, if materialized, shall entirely be borne by the company, as there is no likely reimbursement from any other party.)

7. Related party disclosures as required under AS- 18, "Related Party Disclosures'', are given below:

a) Names of related parties with whom transactions have taken place during the year

Key Management Personnel

Amirali E Rayani Amin A Rayani Samir Rayani Hussein Rayani

Relatives of key management personnel

Akbarali Rayani (Brother of M r. Amirali E Rayani)

Vazirali Rayani (Brother of M r. Amirali E Rayani)

Salimali Rayani (Brother of M r. Amirali E Rayani)

Arif Rayani (Brother of M r. Amin Rayani)

Nilima Kheraj (Sister of M r. Samir Rayani)

Iqbal Rayani (Brother of M r. Hussien Rayani)

Munira Rayani (Wife of Hussein Rayani)

Enterprises owned or signifcantly infuenced by key management personnel or their relatives

Anirudh Distributors Pvt. Ltd.

Ittefaq Ice & Cold Storage Co. Pvt. Ltd.

Panama Builders & Developers Pvt. Ltd.

8. Global Depository Receipts (''GDRs'') issued during the year

On July 20, 2011, the Company raised USD 13,999,985 (Rs. 6,233.79 lakh) through issuance of 491,469 GDRs representing 2,457,345 equity shares of Rs. 10 each at a price of Rs. 253.68 per equity share of Rs. 10 each. The issue price of each GDR is USD 28.486 and the GDRs are listed on the Luxembourg Stock Exchange. The holders of GDR do not have voting rights with respect to the shares represented by the GDRs, but rank pari passu with the existing share holders in all respect including entitlement of dividend declared. The Company has incurred Rs. Nil (Previous Year Rs. 97.30 Lakhs) on account of issue expenses towards the issue of Global Depository Receipts, has been adjusted against Securities Premium.

9. Dividend in respect to previous year represent dividend of Rs. 5/- per share paid to the holders of GDR, which were issued subsequent to the declaration of dividend and adoption of account for the year ended March 31, 2011, and were outstanding on the book closure date.

10. In accordance with section 77A, 77AA and 77B of the Companies Act, 1956 and pursuant to the buy back announcement made by the Company on 1st March 2013, the Company has bought back from open market through stock exchanges 11,765 equity shares of Rs. 10 each during the year for a total consideration of Rs. 15.88 Lakhs. of this, the Company has extinguished 3200 equity shares till 31st March, 2013 and 8,565 equity shares have been extinguished subsequent to the balance sheet date. Consequently, an amount of Rs. 1.18 Lakhs being the nominal value of equity shares bought back has been transferred to Capital Redemption Reserve from proft & loss account. An amount of Rs. 14.70 Lakhs being the premium on buyback has been appropriated from General Reserve.

11. Taxation

"Minimum Alternate Tax (MAT) :- The Company has during the year, provided the current year tax liability of Rs. 260 Lakhs (previous year Rs. Nil) calculated in accordance with the provisions of Section 115JAA of the Income Tax Act, 1961. The MAT credit entitlement in respect of MAT liability for the current and earlier years has been assessed Rs. 312.79 Lakhs as at March 31, 2013 and is disclosed under ''Loans and advances''.

12. Previous year fgures

The company has reclassifed previous year fgures to conform to this year''s classifcation.


Mar 31, 2012

1. Corporate Information

Panama Petrochem Limited (the company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company is engaged in the manufacture of specialty petroleum products for diverse user industries like printing, textiles, rubber, pharmaceuticals, cosmetics, power and other industrial oil.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except change in accounting policy as explained below.

a. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share, however the holders of global depository receipts (GDR's) do not have any voting rights in respect of shares represented by the GDR's till the shares are held by the custodian bank (Refer Note 41). The company declares and pays dividends 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.

The amount of per share dividend recognized as distributions to equity shareholders is Rs 5/- (31 March 2011 : Rs 5/-)

In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets in Cash credit from banks is secured against the hypothecation of Stocks, Book debts and Plant & Machineries (both present & future), Pledge of Fixed Deposit Receipts, Further secured by Equitable Mortgages of Company's present Immoveable Property situated at Daman, Marol industrial estate, property of group companies situated at Navi Mumbai, and property belonging to the Directors. The cash credit is repayable on demand and carried an interest rate of 12% to 16% p.a.

# Excise duty on sales amounting to Rs 4,587.55 lakhs (31 March 2011 : Rs 3,786.67 lakhs) has been reduced from sales in profit and loss and excise duty on increase decrease in stock amounting to Rs (21.60) lakhs (31 March 2011 : Rs 2.84 lakhs) has been considered as (income)/expense in note 23 of financial statements.

3. Employee Benefits

General Description of Defined Benefit plan Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

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

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

The over all expected rate of return on assets is determined based on the market prices prevailing as on that date, applicable to the period over which the obligation is expected to be settled.

4. Leases

Operating Lease: company as lessee

The Company has entered into arrangements for taking on leave and license basis certain office premises and warehouses. The specified disclosure in respect of these agreements is given below :

Notes:

(i) There is no escalation clause in the lease agreement

(ii) There are no restrictions imposed by lease arrangements

(iii) There are no subleases

5. Capitalization of expenditure

During the year, the company has capitalized the following expenses to the cost of fixed assets. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

6. Segment Information

Business Segments:

As the Company is in the business of manufacturing of specialty petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17.

Geographical Segments:

The following table shows the distribution of the Company's consolidated sales by geographical market, regardless of where the goods were produced:

Notes :

Geographical Segment :

a) For the purpose of geographical segment the sales are divided into two segments - India and outside India.

b) The accounting policies of the segments are the same as those described in Note 2.1

7. Contingent Liabilities

31 March 31 March 2012 2011 Rs In lakhs Rs In lakhs

Claims against the Company not acknowledged as debts:

i) Income Tax Matter in appeal with tribunal (AY 06-07) (Amount paid 24.61) - 24.96

(Dispute relating the provisions of Section 145 A of the Income Tax Act, 1961 relating to the AY 06-07 pending in the Income Tax Appellate Tribunal.)"

ii) Service tax Matter disputed with the Deputy Commissioner of Service Tax 10.88 - (Dispute regarding demand raised on service tax payable on interest on usance charges for the period September 2008 to November 2009) 10.88 24.96

(The contingent liabilities, if materialized, shall entirely be borne by the company, as there is no likely reimbursement from any other party.)

8. Global Depository Receipts ('GDRs') issued during the year

On July 20, 2011, the Company raised USD 13,999,985 (Rs 6,233.79 lakh) through issuance of 491,469 GDRs representing 2,457,345 equity shares of Rs10 each at a price of Rs 253.72 per equity share of Rs 10 each. The issue price of each GDR is USD 28.486 and the GDRs are listed on the Luxembourg Stock Exchange. The holders of GDR do not have voting rights with respect to the shares represented by the GDRs, but rank pari passu with the existing share holders in all respect including entitlement of dividend declared. The Company has incurred Rs 97.30 lakhs on account of issue expenses towards the issue of Global Depository Receipts of which Rs 84.11 lakhs incurred in the current year, has been adjusted against Securities Premium.

9. Dividend in respect to previous year represent dividend of Rs 5/- per share paid to the holders of GDR, which were issued subsequent to the declaration of dividend and adoption of account for the year ended March 31, 2011, and were outstanding on the book closure date.

10. Amalgamation of Monaco Petroleum Private Limited with the Company

a) In previous year ended March 31, 2011 pursuant to the scheme of amalgamation (the Scheme) of the erstwhile Monaco Petroleum Private Limited (MPPL) (hereinafter referred to as transferor company) with Panama Petrochem Limited (PPL) ( hereinafter referred as transferee company), as approved by the members at a court convened meeting approved by the shareholders of the Company and MPPL and subsequently sanctioned by the Hon'ble High Courts of Gujarat vide its order dated 23rd March 2011, the assets and liabilities of MPPL have been transferred to and vested in the Company with retrospective effect from April 01, 2010 (the Appointed date). The Scheme has accordingly been given effect to in the accounts in the previous year.

In accordance with the scheme of amalgamation, the difference between the share capital issued and the net assets taken over is adjusted in general reserve.

Had the treatment based on Accounting Standard 14- "Accounting for Amalgamation" been followed, Security Premium would have been higher by Rs 1,022.71 Lakhs and General Reserve would have been lower by Rs 1,022.71 Lakhs.

b) Monaco Petroleum Private Limited (MPPL), (the amalgamating company) engaged in manufacturing of Petrochemicals, having plant in Taloja.

c) The arrangement has been accounted for under the "pooling of interest" method as prescribed by Accounting Standard (AS 14), "Accounting for Amalgamation". Accordingly the assets, liabilities and other reserve of MPPL as on April 1, 2010 have been aggregated at their book value as specified in the Scheme.The difference between the amount recorded as share capital issued by the Company as consideration for the merger and the amount of share capital of the MPPL has been adjusted in the General Reserve Account of the Company in accordance with the scheme.

d) 321,750 Equity Shares of Rs 10/- each fully paid up are to be issued to the equity share holder of the MPPL whose names are registered in the register of members on record date, without payment being received in cash. Pending allotment, the face value of such shares has been shown as "Share Capital Suspense Account" which has been allotted in the current year.

11. Previous year figures

Till the year ended March 31, 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable for the company. The company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1 (a) Nature of Operations

Panama Petrochem Limited is engaged in the manufacture of specialty petroleum products for diverse user industries like printing, textiles, rubber, pharmaceuticals, cosmetics, power and other industrial oil.

( Rs. Rs.000)

2 Contingent Liabilities not 31.03.2011 31.03.2010 provided for

Claims against the Company not acknowledged as debts:

Service Tax Matter - 930

Income Tax Matter in appeal

with tribunal (AY 06-07)

(Amount paid Rs. 1,248) 2,496 2,496

Bank Guarantee 14,722 8,631

(The contingent liabilities, if materialised, shall entirely be borne by the company, as there is no likely reimbursement from any other party.)

3 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 53,113 72,060

4 Major Components of deferred tax assets/ (liabilities) arising on account of timing

differences are :

Deferred Tax Asset :

a. Employee Retirement and

other Long term benefits 843 907

b. Provision for doubtful

debt/advances 2,009 181

c. Allowed in the Income tax on payment basis and other timing differences - 2,691

2,852 3,779

Deferred Tax Liability :

Difference in depreciation and other differences in block 12,028 1,381 of fixed assets as per tax books and financial books

12,028 1,381

5 Net Deferred Tax Asset / (Liability) (9,176) 2,398

Legal & Professional

charges includes Auditors'

remuneration :

(excluding service tax, where

applicable)

As auditor:

- Audit fees 1,100 500

- Limited Review fees 600 -

- Out of Pocket expenses 48 -

Tax audit Fees 20 20

Others - 50

1,768 570

6 Managerial remuneration under Section 198 of the Companies Act, 1956

Salary 5,550 1,386

Perquisites 1,648 1,327

7,198 2,713

Note: As the liabilities for gratuity are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the directors are not included above. Similarly group mediclaim insurance taken for all employees of the Company as a whole are not included above.

7 Employee Benefits

General Description of Defined Benefit plan Gratuity

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to ffteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The following tables summaries the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans.

8a The Company has availed the exemption as per the notification dated February 8, 2011 issued by Ministry of Corporate Affairs and accordingly, the additional information pursuant to the provision of paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b), 3(ii)(d), of Part II of Schedule VI to the Companies Act, 1956 has not been disclosed in the financial statement.

9 Related party disclosures as required under AS-18, "Related Party Disclosures', are given below:

(a) Names of related parties with whom transactions have taken place during the year

Key Management Personnel

1 Amirali E Rayani

2 Amin A Rayani

3 Samir Rayani

Relatives of key management personnel

1 Akbarali Rayani (Brother of Mr. Amirali E Rayani)

2 Vazirali Rayani (Brother of M r. Amirali E Rayani)

3 Salimali Rayani (Brother of M r. Amirali E Rayani)

4 Arif Rayani (Brother of Mr. Amin Rayani)

5 Nilima Kheraj (Sister of Mr. Samir Rayani)

6 Hussein Rayani (Brother of Mr. Amin Rayani)

7 Iqbal Rayai (Brother of Mr. Amin Rayani)

8 Munira Rayani (Daughter in law of Amirali E Rayani)

Enterprises owned or significantly infuenced by key management personnel or their relatives

1 Anirudh Distributors Pvt. Ltd.

2 Ittefaq Ice & Cold Storage Co. Pvt. Ltd.

3 Panama Petroleum Products

4 Panama Builders & Developers Pvt. Ltd.

5 Asiatic Corporation

10 Segment Information :

Business Segments:

As the Company is in the business of manufacturing of speciality petroleum products, the Company has considered petroleum products as the only business segment for disclosure in this context of accounting standard 17 issued by the institute of Chartered Accountants of India.

11 Amalgamation of Monaco Petroleum Private Limited with the Company

a Pursuant to the scheme of amalgamation (the Scheme) of the erstwhile Monaco Petroleum Private Limited (MPPL) (hereinafter referred to as transferor company) with Panama Petrochem Limited (PPL) (hereinafter referred as transferee company), as approved by the members at a court convened meeting approved by the shareholders of the Company and MPPL and subsequently sanctioned by the Hon'ble High Courts of Gujarat vide its order dated 23rd March 2011, the assets and liabilities of MPPL have been transferred to and vested in the Company with retrospective effect from April 01, 2010 (the Appointed date). The Scheme has accordingly been given effect to in these accounts.

In accordance with the scheme of amalgamation, the difference between the share capital issued and the net assets taken over is adjusted in general reserve. Had the treatment based on Accounting Standard 14- "Accounting for Amalgamation" been followed, Security Premium would have been higher by Rs. 102,271 thds and General Reserve would have been lower by Rs. 102,271 thds.

b Monaco Petroleum Private Limited (MPPL), (the amalgamating company) engaged in manufacturing of Petrochemicals, having plant in Taloja.

c The arrangement has been accounted for under the "pooling of interest" method as prescribed by Accounting Standard (AS 14), "Accounting for Amalgamation". Accordingly the assets, liabilities and other reserve of MPPL as on April 1, 2010 have been aggregated at their book value as specified in the Scheme.The difference between the amount recorded as share capital issued by the Company as consideration for the merger and the amount of share capital of the MPPL has been adjusted in the General Reserve Account of the Company in accordance with the scheme.

d 321,750 Equity Shares of Rs 10/- each fully paid up are to be issued to the equity share holder of the MPPL whose names are registered in the register of members on record date, without payment being received in cash. Pending allotment, the face value of such shares has been shown as "Share Capital Suspense Account".

e From the effective date the authorized share capital will stand increased by Rs. 5,500 ('000) consisting of 5,50,000 Equity shares of Rs 10 each.

The figure for the current year includes fgures of Monaco Petroleum Private Limited (MPPL) which is amalgamated with the Company with effect from April 1, 2010 and are therefore to that extent not comparable with those of previous year.

12 Excise duty on sales amounting to Rs. 378,667 P.Y. ( Rs.267,573) has been reduced from sales in profit & loss account and excise duty on decrease/(increase) in stock amounting to Rs. 284 P.Y. ( Rs. (1,862)) has been considered as expense/(Income) in Schedule 14 of financial statements.

13. The figures of the previous year were audited by a Firm of Chartered Accountants other than S.R. Batliboi & Co. The fgures in respect of the previous year have been regrouped, wherever necessary to conform to this year's classification.


Mar 31, 2010

1. In pursuance to the Special Resolution passed in the Annual General Meeting held on 29th September, 2007 the Company had received 10% upfront money from the promoters amounting to Rs.63.75 Lacs in the FY. 2007-08 against the issue on preferential basis of 4,25,000 Share Warrants carrying an option/entitlement to subscribe equivalent number of equity shares of Rs. 10 each on a future date not exceeding 18 months i. e. 30th- June 2009 from the date of issue at a conversion price of Rs. 150 per share including premium of Rs. 140 per share. However, on expiry of the said time limit and option not been exercised, the said amount was forfeited during the year by Company.

2. Contingent Liabilities

As at the As at the

year ended year ended 31/03/2010 31/03/2009 (RS;) (Rs.)

(a) Disputed Income-Tax 24.96 Lacs 26.98 Lacs Liability in appeal

(b) Bank Guarantee 86.31 Lacs 77.69 Lacs

(c) Letter of Credit Facility 9826.14 Lacs 10286.45 Lacs

(d) Disputed Service Tax 9.30 Lacs Nil

Liability

The Company does not expect any liability to devolve on it on account of the above referred contingent liabilities and therefore no provision is held.

3. Estimated amount of Contracts remaining to be executed on Capital Account & not provided for (Net of Advances paid) is Rs. 720.60 Lacs (P.Y. Rs.2,992.52 Lacs).

4. As per the Revised Accounting Standard 15 "Employees Benefits", the disclosure of employee benefits as defined in the Accounting Standard are given below:

5. Assets namely moveable assets like bank accounts and various deposits taken over under the scheme of amalgamation under scheme of amalgamation effected in previous year are still held in the name of the erstwhile transferor company viz Mobile Petro chem. Pvt. Ltd., the company is in the process of getting it transferred in its name.

6. Excise duty Liability on Manufactured goods lying as on 31st March 2010 is provided at Rs. 33.72 lacs (Previous year Rs. 52.33 lacs). Customs duty on imported materials/ goods lying in customs bonded warehouse as on 31st March 2010 is provided at Rs. 721.19 lacs (Previous year Rs. 79.44 lacs)

7. The companys geographical operations at Ankleshwar, Marol & Daman consist of petroleum products. There are no other business segments related to the company and that the geographical locations are not subject to significantly differing risks and returns. In the opinion of the management;segmental reporting based on geographical locations is not required.

8. As per Accounting Standard 18, notified under the Companies (Accounting Standards) Rules 2006, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

List of Related Parties: (Associates):

1. Anirudh Distributors Pvt. Ltd

2. Dunhill Development Pvt. Ltd

3. H.A. Constructions Pvt. Ltd

4. Ittefaq Ice & Cold Storage Co. Pvt. Ltd

5. Express Industries

6. Express Industries - AOP.

7. Iqbal Rayani Consultancy

8. Panama Petroleum Products

9. Asiatic Corporation

10. Iqbal Rayani Consultancy

11. Arif Iqbal Rayani Family Trust

12. Chemifine

13. Diamond Wax Agency

14. Monaco Petroleum Pvt. Ltd

15. S. R. Realities Pvt. Ltd.

16. Panama Builders & Developers Pvt. Ltd

17. Pickol Fibrotech

9. Leases

In accordance with the Accounting Standard on Leases (AS 19), notified under the Companies (Accounting Standards) Rules 2006 disclosures in respect of leases are made below:

a) The Company has taken a Factory/Office Premises on Operating Lease basis. Lease payments in respect of such leases recognized in Profit & Loss Account Rs. 20.00 Lacs (P.Y. - Rs. 10.28 Lacs).

c) The lease terms do not contain any exceptional / restrictive covenants other than prior approval of the lessee before renewal of lease.

d) There are no restrictions such as those concerning dividend and additional debt other than in some cases where prior approval of lessor is necessitated for further leasing.

e) Other lease arrangements, in respect of which payments are made by the Company, are cancelable.

10. Earnings Per Share computed as per AS-20 as follows: Net Profit attributable to equity shareholders: Rs. 2392 lacs. Weighted Average Number of Equity Shares Outstanding during the year: 58.40 lacs equity shares for Basic EPS and 58.40 lacs equity shares for Diluted EPS.

Earnings per share (Rs) Basic: Rs. 40.96, Diluted: Rs. 40.96

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

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

12. Details in respect of the products manufactured, Licensed and Installed Capacity, Opening Stock, Production and Purchases. Sales, Closing Stock and Raw Materials consumed are taken as certified by the Management and are as follows:

13. Inter Unit Transfer & Captive Consumption

Inter Unit transfers are valued, either at factory cost of the transferor unit or at sales price plus transport and other charges. Inter Unit transfers amounting to Rs.695.85 Lacs (Previous Year Rs. 1758.43 lacs) and Captive Consumption amounting to Rs.NIL (Previous Year Rs.NIL lacs) totaling to Rs.695.85 lacs (Previous year Rs. 1758.43 lacs) have been reduced from both purchases and sales during the year. The method adopted is similar to the method adopted in previous year.

14. As per the past practice consistently followed by the company, all indirect expenditure incurred at the Head Office are allocated to the Daman unit on the basis of the turnover ratio for the purpose of working out the profit of the said unit for availing deduction u/s 80 IB.

15. Current assets, loans & advances are approximately of the value stated, except otherwise stated, if realized in the ordinary course of business. The provision of all known liabilities, is adequate and not in excess of the amounts reasonably necessary. Balance in sundry debtors, loans and advances, deposits, current liabilities and unsecured loans are subject to confirmations.

16. Sundry Debtors include Rs.119.81 lacs (PY. Rs. 122.89 lacs) due for a period exceeding 2 years as on the balance sheet date. In the opinion of the management, the same are good and recoverable and hence the same has not been provided for.

17. Figures for the previous year have been regrouped/ recasted wherever necessary to make them comparable with the figures of the current year.

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