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Notes to Accounts of I G Petrochemicals Ltd.
Mar 31, 2025
ii. Terms/rights attached to equity shares
The Company has only one class of equity shares referred to as equity shares having par value of ? 10 per share. Each holder of equity share is entitled to one vote per share. The Company pays the 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.
iv The first ECB is secured by the first pari-passu charge on the fixed movable assets (other than current assets) and registered mortgage on immovable properties of the Company by way of first pari-passu charge. The second ECB, Foreign Currency Term Loan and Rupee Term Loan is secured by (i) first pari-passu charge on the moveable fixed assets, (ii) second pari-passu charge on all current assets of the Company, (iii) registered mortgage on immovable properties of the Company by way of first pari-passu charge and (iv) the Personal Guarantee of two Directors of the Company. However, one of the guarantors Shri M M Dhanuka ceased to be Director effective 13th February, 2025. He passed away on 19th April, 2025. Notwithstanding this, the personal guarantee remains valid and binding on his legal heirs till such time the lenders relinquish or agree otherwise.
i. Bank borrowings are secured for present and future, first pari-passu charge on the whole of the current assets of the Company and second pari-passu charge on the movable properties of the Company amongst Working Capital lenders under consortium banking arrangement. The loan is also secured by mortgage of immovable properties of the Company by way of second charge and Personal Guarantee of two Directors of the Company.
ii. Bill discounting Facility is secured by respective book debts & personal Guarantee of two Directors of the Company. However, one of the guarantor Shri M M Dhanuka ceased to be Director effective 13th February, 2025 and passed away on 19th April, 2025. Notwithstanding this, the personal guarantee remains valid and binding on his estate till such time the lenders relinquish or agree otherwise.
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39 CONTINGENT LIABILITIES |
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CONTINGENT LIABILITIES NOT PROVIDED FOR |
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As at 31st March, 2025 |
As at 31st March, 2024 |
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a. Disputed Excise & Service tax matters |
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i) Cases decided in favour of the Company which are taken further in appeal before the appellate authorities by the department. (Deposit under Protest ? NIL, (Previous year ? NIL). |
750.87 |
750.87 |
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ii) Other Matters for which the Company is in appeal. |
665.35 |
670.61 |
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(Deposits paid under protest ? 665.35 lakhs (Previous year ? 665.35 lakhs) |
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iii) Show Cause Notices received |
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(Deposits paid under protest ? 15.55 lakhs (Previous year ?15.55 lakhs) |
994.15 |
994.15 |
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b. Claim against the Company not acknowledged as Debt. (Deposit paid under protest ? 0.84 lakhs (Previous year ? 0.84 lakhs) |
220.02 |
220.02 |
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c. Income Tax matters under dispute for various years due to additions/disallowances. (Deposit under protest Nil (Previous year Nil) |
127.99 |
127.99 |
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d. Electricity Duty Disputed, writ petition has been filed before the Mumbai High Court through Captive Power Producers Association and stay has been granted. |
3,607.13 |
3,182.91 |
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The Management is confident that the matters will be in favour of the company as per legal opinions obtained/legal precedents. |
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Future cash outflows in respect of above items are determinable only on receipt of judgements/decisions pending at various forums/authorities. |
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This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of material accounting policies, including the criterial for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in significant accounting policies to the standalone financial statements.
(A) FAIR VALUE HIERARCHY
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The carrying amount of cash and bank balances, trade receivables, loans, trade payables and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to level 3, as described below :
Level-1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level-2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level-3 : Techniques which use inputs that have a significant effect on the recorded Fair Value that are not based on observable market data.
(B) FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES:
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Board.
i. Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and loans and borrowings.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowings.
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 exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.
Foreign currency risk
The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas, purchases from overseas suppliers in various foreign currencies and borrowings in foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivatives, Cash and cash equivalents, bank deposits and other financial assets.
ii. Price Risk
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
LIQUIDITY RISK
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities. The Company monitors the net liquidity position through forecasts on the basis of expected cash flows.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:
iii. Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors. Refer Note 52 for ageing of accounts receivables.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month''s operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does not foresee any credit risks on deposits with regulatory authorities.
45 EVENTS AFTER REPORTING PERIOD
The Board at its meeting held on 19th May, 2025 considered and recommended a dividend @ ? 10 per share of ? 10 each for the financial year 2024-25 amounting to ? 3,079.49 lakhs. (Previous Year ? 7.50 per Share taken as deduction under Reserves & Surplus) subject to approval of the members of the Company.
Research & Development Expenditure of ? 89.85 lakhs (Previous Year ? 73.53 lakhs) has been accounted for in the respective heads of the Statement of Profit and Loss.
For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going concern.
The Company has distributed dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing which represents external commercial borrowing and term loans from banks less cash and cash equivalents . The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2025 and 31st March, 2024.
48 CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are education, skill development and women empowerment. A CSR committee has been formed by the company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
49 There was no impairment loss on non- financial assets on the basis of review carried out by the management in accordance with the Indian Accounting Standard (Ind AS -36) " Impairment of Assets "
50 The Company had elected to exercise the option permitted under section 115 BAA of the Income Tax Act, 1961 accordingly the company has recognised Provision for Income Tax from Financial Year 2020-21.
51 The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on 28th September, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on 13th November, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact.
57 OTHER STATUTORY INFORMATION:
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii. The Company do not have any transactions with companies struck off.
iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vi. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
vii. The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
viii. The title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), are held in the name of the Company.
ix. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
x. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
xi. The Company have filed quarterly statement to banks against borrowings on security of Current Assets which are as per books of accounts.
Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.
Mar 31, 2024
J) PROVISIONS AND CONTINGENT LIABILITIES
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The contingent liability is not recognized in books of account but its existence is disclosed in financial statements unless the probability of outflow of resources is remote.
K) REVENUE FROM CONTRACT WITH CUSTOMERS
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Ind AS 115 "Revenue from contracts with Customersâ provides a control-based revenue recognition model and provides a five step application approach to be followed for revenue recognition.
A) Identify the contracts with a customer.
B) Identify the performance obligations.
C) Determine the transaction price;
D) Allocate the transaction price to the performance obligations,
E) Recognise revenue when or as an entity satisfies performance obligation.
Revenue from sale of goods is recognised at the point in time when control of the goods is Transferred to the customer, generally on delivery of the goods and there are no unfulfilled obligations.
The Company considers, whether there are other promises in the contract in which there are separate performance obligations, to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).
Export incentive
Income from export incentives such as duty drawback and MEIS are recognized on accrual basis.
Interest Income
Interest income is recognized on accrual basis.
Dividend Income
Dividend income on investments is recognized when the right to receive dividend is established.
Insurance Claims
Insurance claim receivable is accounted for when amount of claim is finalized by insurance company.
.) EMPLOYEE BENEFITS Defined contribution plans
Contributions to defined contribution schemes such as employees'' state insurance, labour welfare fund, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees.
Company''s provident fund contribution, except of certain employees, is made to an irrevocable trust set up by the company and contribution to pension fund deposited with the Regional Provident Fund Commissioner and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
In respect of certain employee, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate
of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The liability in respect of the shortfall of interest earnings of the Fund is determined on the basis of an actuarial valuation. The Company also provides for retirement/post-retirement benefits in the form of gratuity and leave pay.
Defined benefit plans
For defined benefit plans, the amount recognized as ''Employee benefit expenses'' in the Statement of Profit and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of individual events such as past/future service benefit changes and settlements (such events are recognized immediately in the Statement of Profit and Loss). The amount of net interest expense calculated by applying the liability discount rate to the net defined benefit liability or asset is charged or credited to ''Employee benefit expenseâ in the Statement of Profit and Loss. Any differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognized immediately in ''Other comprehensive income'' and subsequently not reclassified to the Statement of Profit and Loss.
The defined benefit plan surplus or deficit on the Balance Sheet comprises the total for each plan of the fair value of plan assets less the present value of the defined benefit liabilities (using a discount rate by reference to market yields on government bonds at the end of the reporting period).
All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Company''s net obligation into current and non-current is as per the actuarial valuation report.
Termination benefits
Termination benefits, in the nature of voluntary retirement benefits or termination benefits arising from restructuring, are recognized in the Statement of Profit and Loss. The Company recognizes termination benefits at the earlier of the following dates.
a) When the Company can no longer withdraw the offer of those benefits; or
b) When the Company recognizes costs for a restructuring that are within the scope of Ind AS 37 and involves the payment of termination benefits.
Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
Compensated absences
Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement at the year end.
Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year end are treated as other long term employee benefits. The Company''s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the statement of profit and loss in the year in which they arise.
Leaves under define benefit plans can be encashed only on discontinuation of service by employee.
The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilized leave balances is provided at the end of year and charged to the statement of profit and loss.
M) INCOME TAXES
Income tax expense for the year comprises of current tax and deferred tax. Tax is recognized in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in equity or in other comprehensive income. In which case, the tax is also recognized in other comprehensive income or equity.
Current Tax
Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax rates and the provisions of the Income Tax Act, 1961 at the Balance Sheet date, and any adjustment to taxes in respect of previous years.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred Tax
Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax base purposes.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
N) FOREIGN CURRENCIES
i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (?), which is the Company''s functional and presentation currency.
ii) Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/Losses arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date and the exchange differences are recognised in the Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).
O) CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the balance sheet comprise balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft.
P) EARNINGS PER SHARE
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
Q) LEASES
The Company as a Lessee
The Company''s lease asset classes primarily consist of leases for Buildings. The Company assesses whether a contract is or contains a lease, at inception of contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
i The contract involves the use of an identified asset.
ii The Company has substantially all of the economic benefits from use of the asset through the period of the lease and
iii The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROUâ) and a corresponding leases liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognizes the lease payments as on operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straightline basis over the shorter of the lease term or useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrences of certain events such as a change in the lease term or a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payment have been classified as financing cash flows.
The Company as a Lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
R) DIVIDEND DISTRIBUTIONS
The Company recognizes a liability to make the payment of dividend to owners of equity, when the distribution is authorized, and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
1D: MATERIAL ACCOUNTING JUDGEMENT, ESTIMATES AND ASSUMPTION
The preparation of financial statements in conformity with Ind AS requires the Management to make estimate and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from these estimates.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future years. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting
estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(i) Defined benefit plans (gratuity benefits and compensated absences)
The cost of the defined benefit plans such as gratuity and compensated absences are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each year end.
The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis.
(ii) Useful lives of property, plant and equipment (PPE) and intangible assets
Property, plant and equipment/ intangible assets are depreciated /amortised over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of Depreciation/ amortisation to be recorded during any reporting period. The useful life and residual values are based on the company''s historical experience with similar assets and take into account anticipated technological changes, expected level of usage and product life-cycle. The depreciation /amortisation for future periods is revised if there are significant changes from previous estimates.
(iii) Legal & Tax matters and contingent liabilities
Various litigations and claims related to Company are assessed primarily by the management and
also in certain cases by with the support of the relevant external advice. Disclosures related to such provision for legal cases, as well as contingent liabilities, require judgment and estimations.
(iv) Recognition of property, plant and equipment (PPE) and Capital work-in-progress
Significant level of judgement is involved in assessing whether the expenditure incurred meets the recognition criteria under Ind AS 16, Property and equipment. Also estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the management.
(v) Impairment of Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than the carrying amount, a material impairment loss may arise.
1E: RECENT ACCOUNTING PRONOUNCEMENTS
Ministry of Corporate Affairs ("MCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
43 FINANCIAL INSTRUMENTS
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of material accounting policies, including the criterial for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in material accounting policies to the standalone financial statements.
(a) Fair Value Hierarchy
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The carrying amount of cash and bank balances, trade receivables, loans, trade payables and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The following table Presents carrying amount and fair Value of each category of financial assets and liabilities.
(b) Financial Risk Management Policies and objectives:
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Board.
i. Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and loans and borrowings.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowings.
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 exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.
Foreign currency risk
The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas, purchases from overseas suppliers in various foreign currencies and borrowings in foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivatives, Cash and cash equivalents, bank deposits and other financial assets.
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities. The Company monitors the net liquidity position through forecasts on the basis of expected cash flows.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors. Refer Note 52 for ageing of accounts receivables.
The following table summarizes the changes in loss allowances measured using life time expected credit loss model -
45 EVENTS AFTER REPORTING PERIOD
The Board at its meeting held on 22nd May, 2024 considered and recommended a dividend @ ? 7.50 per share of ? 10/ each for the financial year 2023-24 amounting to ? 2,309.61 lakhs. (Previous Year ? 10 per Share taken as deduction under Reserves & Surplus) subject to approval of the members of the Company.
46 RESEARCH & DEVELOPMENT
Research & Development Expenditure of ? 73.53 lakhs (Previous Year ? 94.05 lakhs) has been accounted for in the respective heads of the Statement of Profit and Loss
47 CAPITAL MANAGEMENT
For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going concern.
The Company has distributed dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing which represents external commercial borrowing and term loans from banks less cash and cash equivalents. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
48 CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are education, skill development and women empowerment. A CSR committee has been formed by the company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
57 OTHER STATUTORY INFORMATION:
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii. The Company do not have any transactions with companies struck off.
iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vi. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
vii. The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
viii The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
ix. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
x. The Company have filed quarterly statement to banks against borrowings on security of Current Assets which are as per books of accounts.
58 PREVIOUS YEAR COMPARATIVES
Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
As per our report of even date For and on behalf of the Board of Directors of
For M S K A & Associates For S M M P & Company I G Petrochemicals Limited
Chartered Accountants Chartered Accountants CIN L51496GA1988PLC000915
Firm''s Registration No.: 105047W Firm''s Registration No.: 120438W
Siddharth Iyer Chintan Shah M M Dhanuka Nikunj Dhanuka
Partner Partner Chairman Managing Director & CEO
Membership No.: 116084 Membership No.: 166729 DIN 00193456 DIN 00193499
Sudhir R Singh Rajesh R Muni Pramod Bhandari
Place : Mumbai Company Secretary Independent Director Chief Financial Officer
Date : 22nd May, 2024 Membership No.: F4880 DIN 00193527 Membership No.: 191333
Mar 31, 2023
K) PROVISIONS AND CONTINGENT LIABILITIES
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.
If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The contingent liability is not recognized in books of account but its existence is disclosed in financial statements.
L) REVENUE FROM CONTRACT WITH CUSTOMERS
Revenue is recognised to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Ind AS 115 "Revenue from contracts with Customers" provides a control-based revenue recognition model and provides a five step application approach to be followed for revenue recognition.
A) Identify the contracts with a customer
B) Identify the performance obligations.
C) Determine the transaction price;
D) Allocate the transaction price to the performance obligations,
E) Recognise revenue when or as an entity satisfies performance obligation.
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the customer, generally on delivery of the goods and there are no unfulfilled obligations.
The Company considers, whether there are other promises in the contract in which there are separate performance obligations, to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).
Export incentive
Income from export incentives such as duty drawback and MEIS are recognized on accrual basis.
Interest Income
Interest income is recognized on accrual basis.
Dividend Income
Dividend income on investments is recognized when the right to receive dividend is established.
Insurance Claims
Insurance claim receivable is accounted for when amount of claim is finalized by insurance company.
M) EMPLOYEE BENEFITS
Defined contribution plans
Contributions to defined contribution schemes such as employees'' state insurance, labour welfare fund, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees.
Company''s provident fund contribution, except of certain employees, is made to an irrevocable trust set up by the company and contribution to pension fund deposited with the Regional Provident Fund Commissioner and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
In respect of certain employee, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees
Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The liability in respect of the shortfall of interest earnings of the Fund is determined on the basis of an actuarial valuation. The Company also provides for retirement/post-retirement benefits in the form of gratuity and leave pay.
Defined benefit plans
For defined benefit plans, the amount recognized as ''Employee benefit expensesâ in the Statement of Profit and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of individual events such as past/future service benefit changes and settlements (such events are recognized immediately in the Statement of Profit and Loss). The amount of net interest expense calculated by applying the liability discount rate to the net defined benefit liability or asset is charged or credited to ''Employee benefit expenseâ in the Statement of Profit and Loss. Any differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognized immediately in ''Other comprehensive incomeâ and subsequently not reclassified to the Statement of Profit and Loss.
The defined benefit plan surplus or deficit on the Balance Sheet comprises the total for each plan of the fair value of plan assets less the present value of the defined benefit liabilities (using a discount rate by reference to market yields on government bonds at the end of the reporting period).
All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Companyâs net obligation into current and non-current is as per the actuarial valuation report.
Termination benefits
Termination benefits, in the nature of voluntary retirement benefits or termination benefits arising from restructuring, are recognized in the Statement of Profit and Loss. The Company recognizes termination benefits at the earlier of the following dates.
(a) When the Company can no longer withdraw the offer of those benefits; or
(b) When the Company recognizes costs for a restructuring that is within the scope of IndAS 37 and involves the payment of termination benefits.
Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
Compensated absences
Compensated Absences: Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement at the year end.
Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months from the end of the year end are treated as other long term employee benefits. The Company''s liability is actuarially
determined (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the statement of profit and loss in the year in which they arise.
Leaves under define benefit plans can be encashed only on discontinuation of service by employee.
The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilized leave balances is provided at the end of year and charged to the statement of profit and loss.
N) IMPAIRMENT OF NON FINANCIAL ASSETS
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset. unless the asset does not generate cash inflows that are largely independent of those from other assets.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the assets. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that
would have been determined (net of any accumulated amortization or
depreciation) had no impairment loss been recognized for the asset in prior years.
O) INCOME TAXES
Income tax expense for the year comprises of current tax and deferred tax. Tax is recognized in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in equity
or in other comprehensive income. In which case, the tax is also recognized in other comprehensive income or equity.
Current Tax
Current tax is the expected tax payable/ receivable on the taxable income/ loss for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years.
Deferred Tax
Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax base purposes.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognized deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Current tax assets and current tax liabilities are off set when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred tax assets and deferred tax liabilities are off set when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
P) FOREIGN CURRENCIES
i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currencyâ). The financial statements are presented in Indian rupee (INR), which is the Companyâs functional and presentation currency.
ii) Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/Losses arising out of fluctuation
in foreign exchange rate between the transaction date and settlement date are recognised in the Statement of Profit and Loss.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date and the exchange differences are recognised in the Statement of Profit andLoss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
Q) CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the balance sheet comprise balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purposes of the cash flow statement, cash and cash equivalents include balance with banks, cash on hand, cheques/ draft on hand and short-term deposits net of bank overdraft.
R) EARNINGS PER SHARE
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
S) BUSINESS COMBINATION
Business combinations are accounted for using the acquisition accounting method as at the date of the acquisition, which is the date at which control is transferred to the Company. The consideration transferred in the acquisition and the identifiable assets acquired and liabilities assumed are recognized at fair values on their acquisition date. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for noncontrolling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. The Company recognizes any noncontrolling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the noncontrolling interest''s proportionate share of the acquired entityâs net identifiable assets. Consideration transferred does not include amounts related to settlement of pre-existing relationships. Such amounts are recognized in the Statement of Profit and Loss.
Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity securities. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value of contingent consideration are recognized in the Statement of Profit and Loss.
T) LEASES
The Company as a Lessee
The Company''s lease asset classes primarily consist of leases for Buildings. The Company assesses whether a contract is or contains a lease, at inception of contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
i. The contract involves the use of an identified asset.
ii. The Company has substantially all of the economic benefits from use of the asset through the period of the lease and
iii. The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding leases liability for all lease arrangements in which it is a lessee, except for leases with
a term of twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognizes the lease payments as on operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at costless accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term or useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrences of certain events such as a change in the lease term or a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payment have been classified as financing cash flows.
The Company as a Lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of owner ship to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
1C: Significant accounting Judgement-estimates and Assumption
The preparation of financial statements in conformity with Ind AS requires the Management to make estimate and assumptions that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the accompanying financial statements are based upon the Management''s evaluation of the relevant facts and circumstances as at the date of the financial statements. Actual results could differ from these estimates.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future years. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are revised and in any future years affected.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the year end date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
(i) Defined benefit plans (gratuity benefits and compensated absences)
The cost of the defined benefit plans such as gratuity and compensated absences are determined using actuarial valuations. An actuarial valuation involves making variousas sumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved inthe valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each year end.
The principal assumptions are the discount and salary growth rate. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of liabilities. Salary increase rate takes into account of inflation, seniority, promotion and other relevant factors on long term basis.
(ii) Useful lives of property, plant and equipment (PPE) and intangible assets
Property, plant and equipment/ intangible assets are depreciated / amortised over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of Depreciation/ amortisation to be recorded during any reporting period. The useful life and residual values are based on the company''s historical experience with similar assets and take into account anticipated technological changes, expected level of usage and product lifecycle. The depreciation /amortisation for future periods is revised if there are significant changes from previous estimates.
(iii) Legal & Tax matters and contingent liabilities
Various litigations and claims related to Company are assessed primarily by the management and also in certain cases by with the support of the relevant external advice. Disclosures related to such provision for legal cases, as well as contingent liabilities, require judgment and estimations.
(iv) Recognition of property, plant and equipment (PPE) and Capital work in Progress
Significant level of judgement is involved
in assessing whether the expenditure incurred meets the recognition criteria under Ind AS 16, Property and equipment. Also estimates are involved in determining the cost attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the management.
(v) Impairment of Goodwill
Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the management to estimate the future cash flows expected to arise from the cashgenerating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than the carrying amount, a material impairment loss may arise.
1D: Recent accounting pronouncements issued but not yet effective
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standard) Amendment Rules 2023 dated 31st March, 2023 to amend the existing Ind AS which are effective from 1st April, 2023. The Company does not expect the amendment to have any significant impact in its financial statements.
Note:
a) Amount in bracket represents figures for previous year.
b) The related party relationships have been determined on the basis of the requirements of the Indian Accounting Standard (Ind AS -24) " Related party disclosures and the same have been relied upon by auditors.
c) The relationships as mentioned above pertain to those related parties with whom transcations have taken place during the year.
d) Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions.
e) During the year, outstanding loan as on 30th June, 2022 of ^ 3,525.27 lakhs got converted to equity share.
f) Retirement benefits (i.e. gratuity) related to Key managerial personnel are recognised under employee benefit expenses in statement of profit and loss with other employees gratuity cost of the Company based on the actuarial valuation carried out by independent actuary.
43 FINANCIAL INSTRUMENTS
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of significant accounting policies, including the criterial for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in significant accounting policies to the standalone financial statements.
(a) Fair Value Hierarchy
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The carrying amount of cash and bank balances, trade receivables, loans, trade payables and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The following table Presents carrying amount and fair Value of each category of financial assets and liabilities.
Notes forming part of the Standalone Financial Statements for the year ended 31st March, 2023
(b) Financial Risk Management Policies and objectives:
The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Board.
i. Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and loans and borrowings. The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowings.
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 exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.
Foreign currency risk
The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas, purchases from overseas suppliers in various foreign currencies and borrowings in foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.
Financial instruments that are subject to Concentrations of credit risk principally consist of trade receivables, investments, derivatives, Cash and cash equivalents, bank deposits and other financial assets.
ii. Price Risk
The Company is mainly exposed to the price risk due to its investment in mutual funds. In order to manage its price risk arising from investment in mutual funds, the Company diversifies its portfolio based on past performance. The impact of price risk with respect to investment in mutual fund is insignificant.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities. The Company monitors the net liquidity position through forecasts on the basis of expected cash flows.
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:
45 BUSINESS COMBINATION
During the year ended 31st March, 2018 the Company has acquired the manufacturing unit of Mysore Petro Chemicals Limited with effect from 1st April, 2017 for a consideration of ^ 7,448.00 lakhs on slump sale basis, as per the valuation by Haribhakti & Co. LLP. The transaction was accounted under Ind AS 103 " Business Combination " as a business combination with the purchases price being allocated to identifiable assets and liabilities at fair value as determined by an approved valuer.
46 RESEARCH & DEVELOPMENT
Research & Development Expenditure of ^ 94.05 lakhs (Previous Year ^ 75.65 lakhs) has been accounted for in the respective heads of the Statement of Profit and Loss.
47 CAPITAL MANAGEMENT
For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value and to ensure the Company''s ability to continue as a going concern.
The Company has distributed dividend to its shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of non-current borrowing which represents external commercial borrowing and term loans from banks less cash and cash equivalents. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
48 CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are education, skill development and women empowerment. A CSR committee has been formed by the Company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
49 There was no impairment loss on non- financial assets on the basis of review carried out by the management in accordance with the Indian Accounting Standard (Ind AS -36) " Impairment of Assets "
50 The Company had elected to exercise the option permitted under section 115 BAA of the Income Tax Act, 1961 accordingly the Company has recognised Provision for Income Tax from Financial Year 2020-21.
51 The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on 28th September, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on 13th November, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.
The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact.
57 OTHER STATUTORY INFORMATION:
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
ii. The Company do not have any transactions with companies struck off.
iii. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv. The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
vi. The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
vii. The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
viii. The title deeds of all the immovable properties including Investment property and other line items where applicable to the financial statements, are held in the name of the Company.
ix. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
x. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
xi. The Company have filed quarterly returns to banks against borrowings on security of Current Assets which are as per books of accounts.
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Mar 31, 2022
1. Buildings include ? 250/- (Previous year ? 250/-) for shares issued in favour of the Company having office premises in a co-operative society.
2. Capital work in Progress & Addition to fixed Assets includes Property,Plant & Equipment under construction ? 1,690.88 lakhs (Previous year - ? 3,709.36 lakhs), Machinery Spares Stock ? 0.90 lakhs (Previous year -? 194.48 lakhs) and preoperative expenses and trial run expenses incurred during the year in the form of Employee Benefits expense of? 157.35 lakhs (Previous year ? 396.71 lakhs), Rates & Taxes - ? Nil (Previous year ?4.76 lakhs), Interest & Finance Expenses ? 18.98 lakhs (Previous Year - ? 724.93 lakhs), Insurance Premium ? 29.14 lakhs (Previous Year - ? 44.48 lakhs), Power, Fuel & Water Charges ? 19.66 lakhs(Previous year ? 436.02 lakhs), Raw material consumed ? 98.41 lakhs (Previous year 2,807.71 lakhs), Closing stock (? 112.41) lakhs (Previous year Nil), Stores and packing material consumed ? 5.87 lakhs(Previous year ? 41.75 lakhs), Repair & Maintenance ? Nil (Previous year ? 33.31 lakhs), Selling expenses ? Nil (Previous year ? 124.72 lakhs), Depreciation ? Nil (Previous year ? 47.71 lakhs) and Miscellaneous Expenses ? 273.15 lakhs (Previous Year - ? 31.63 lakhs) Less Sale of Finished Goods ? Nil (Previous year ? 5,066.00 lakhs) and Other operating income ? Nil (Previous year ? 5.62 lakhs).
3. Goodwill
The Company tests goodwill annually for impairment
Goodwill was recognised from business combination during the year ended 31st March, 2018 and represents difference of purchase consideration paid & allocation to Identified Assets & Liabilities as per Valuerâs Report on acquiring manufacturing unit of Maleic Anhydride. The estimated value-in-use of the Unit is based on the future cash flows using at 2% annual growth rate for periods subsequent to the forecast period of 5 years and discount rate of 17%. An analysis of the sensitivity of the computation to a change in key parameters (operating margin, discount rates and long term average growth rate), based on reasonable assumptions, did not identify any probable scenario in which the recoverable amount of the Unit would decrease below its carrying amount.
4. Pursuant to the amendment to the Companies (Accounting Standards), Rules, 2006 by notification dated 29th December 2011 issued by the Ministry of Corporate Affairs and exemption allowed vide D133AA of Ind AS-101 first time adoption of Ind AS, the Company continues to exercise the option in terms of Para 46A inserted in the Standard for long term foreign currency monetary assets and liabilities. Consequently the loss of foreign exchange of? 11.39 lakhs for the year and loss of foreign exchange ? 1,180.15 lakhs as on 31st March, 2022 has been capitalised.
i. The Company has availed two External Commercial Borrowings (ECB) which are repayable in 17 equal semi-annual instalments commencing from 29th November, 2019 and 15th September, 2013. The ECB is secured by the first pari-pasu charge on the fixed movable assets (other than current assets) and registered mortgage on immovable properties of the Company by way of first pari-passu charge. The ECB whose repayment commenced on 15th September, 2013 has since been repaid in full on 15th September, 2021.
ii. Term Loan from Export Import Bank of India is secured by hypothecation of the Current assets, movable plant machinery and equipment, etc. of the Company and Personal Guarantee of two Directors of the Company,the loan is repayable in 20 equal quarterly instalments commencing from 1st October, 2024.
i. Bank borrowings are secured by first pari passu charge on the whole of the current assets of the Company and second pari passu charge on the movable properties of the Company amongst Working Capital lenders under consortium banking arrangement. The loan is also secured by mortgage of immovable properties of the Company by way of second charge and Personal Guarantee of two Directors of the Company.
ii. Bill discounting Facility is secured by respective book debts & personal Guarantee of two Directors of the Company.
|
31 | CONTINGENT LIABILITIES |
||
|
Contingent Liabilities not provided for a. Disputed Excise & Service tax matters i) Cases decided in favour of the Company which are taken further in appeal before the appellate authorities by the department. (Deposit under Protest '' NIL, (Previous year '' NIL). |
750.87 |
750.87 |
|
ii) Other Matters for which the Company is in appeal. (Deposits paid under protest '' 665.35 lakhs (Previous year '' 735.53 lakhs) |
665.35 |
735.53 |
|
iii) Show Cause Notices received (Deposits paid under protest '' 15.55 lakhs (Previous year ''15.55 lakhs) |
333.71 |
333.71 |
|
b. Claim against the Company not acknowledged as Debt. |
197.08 |
189.29 |
|
c. I ncome Tax matters under dispute for various years due to additions/ disallowances. (Deposit under protest '' 707.94 lakhs) (Previous year '' 707.94 lakhs) |
5,910.56 |
5,984.23 |
|
d. Electricity Duty Disputed, writ petition has been filed before the Mumbai High Court through Captive Power Producers Association and stay has been granted. |
2,355.51 |
1,949.58 |
The Management is confident that the matters will be in favour of the Company as per legal opinions obtained/ legal precedents.
Future cash outflows in respect of above items are determinable only on receipt of judgments / decisions pending at various forums/authorities.
e. The Board at its meeting held on 20th May, 2022 considered and recommended a dividend @100 % i.e. '' 10/-per share of '' 10/- each for the financial year 2021-22 amounting to '' 3,079.49 lakhs. (Previous Year @75% i.e. '' 7.50/- per share taken as deduction under Reserves & Surplus) subject to approval of the members of the Company.
32 | SEGMENT INFORMATION
Primary Business Segment
The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.
Notes:
a) The related party relationships have been determined on the basis of the requirements of the Indian Accounting Standard (Ind AS -24) âRelated party disclosuresâ and the same have been relied upon by auditors.
b) The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year.
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of significant accounting policies, including the criterial for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note-I of significant accounting policies to the financial statements.
(b) The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to level 3, as described below:
Level-1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level-2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level-3: Techniques which use inputs that have a significant effect on the recorded Fair Value that are not based on observable market data.
(c) Financial Risk Management Policies and objectives:
The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and loans and borrowings.
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowings.
Interest rate risk
The Companyâs does not have any significant interest bearning asset however there are certain unsignificant interest bearing liability. As such, the Company is not exposed to significant interest rate risk as at the reporting date.
Foreign currency risk
The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies.
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company maintains sufficient cash and cash equivalents to manage its liquidity risk.
Credit Risk
Credit risk is the risk that counterparty will default on its contractual obligations resulting in a financial loss to the Company. To manage this, the Company periodically assess the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and agreeing of accounts receivable. Individual risk limit are set accordingly.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, derivatives, cash and cash equivalents, bank deposits and other financial assets.
During the year ended 31st March, 2018 the Company had acquired the manufacturing unit of M/s Mysore Petro Chemicals Limited with effect from 1st April, 2017 for a consideration of '' 7,448.00 lakhs on slump sale basis, as per the valuation by Haribhakti & Co. LLP. The transaction was accounted under Ind AS 103 "Business Combinationâ as a business combination with the purchases price being allocated to identifiable assets and liabilities at fair value as determined by an approved valuer.
Goodwill arose in the acquisition of above business because the cost of combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and assembled workforce of acquired business combination. These benefits are not recognised separately from goodwill as they do not meet the recognised criteria for identifiable intangible assets.
39 | RESEARCH & DEVELOPMENT
Research & Development Expenditure of '' 75.65 lakhs (Previous Year '' 69.96 lakhs) has been accounted for in the respective heads of the Statement of Profit and Loss.
40 | The outbreak of corona virus (Covid-19) pandemic globally and in India is causing significant disturbance and slowdown of economic activity. The management has made an assessment of the impact of Covid-19 on the Companyâs operations, financial performance and position as at 31st March, 2022 and has concluded that there is no material impact which is required to be recognised in the Standalone financial statements. Accordingly, no adjustment have been made to the financial results. However the Company continues to monitor the situation and take appropriate action, as considered necessary.
42 There was no impairment loss on non- financial assets on the basis of review carried out by the management in accordance with the Indian Accounting Standard ( Ind AS-36 ) "Impairment of Assetsâ
43 The Company had elected to exercise the option permitted under Section 115 BAA of the Income Tax Act, 1961. Accordingly the Company has recognised Provision for Income Tax from Financial Year 2020-21.
44 | The Code on Social Security 2020 (''the Codeâ) relating to employee benefits, during the employment and postemployment, has received Presidential assent on 28th September, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on 13th November, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.
The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact.
Mar 31, 2018
Bank borrowings are secured by Hypothecation of current assets of the company i.e. stock of raw materials, stock in process, finished goods, stores & spares and book debts on first pari passu basis amongst Working Capital lenders under consortium banking arrangement. It is further secured by hypothecation of Fixed and movable properties and registered mortgage of immovable properties of the Company on second charge basis.
The above Bank borrowings are further secured by Personal Guarantee of two Directors of the company.
Dues to parties covered under the Micro, Small and Medium Enterprises as per MSMED Act, 2006 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 Auditor.
The Management is confident that the matters will be in favour of the company as per legal opinions obtained / legal precedents.
f. Income Tax Matters
The Income Tax Assessments have been completed upto Assessment year 2015-16. While completing the Income tax Assessments, the Income Tax department had disallowed certain claims of the Company which resulted in reduction of carried forward benefits available to the Company as per the Income Tax Act, 1961. Due to this the additional liability remains to be provided as on date amounts to Rs. 2,302.20 Lakhs (Previous Year Rs. 5,209 Lakhs). These matters are under Appeal before the Honâble Karnataka High Court and with other Appellate Authorities, based on the favourable decisions in similar cases / legal opinions taken by the Company / discussions with solicitors etc. the management is confident that matters will be in favour of the company, hence no provision has been made in the accounts.
Future cash outflows in respect of item b, c, e, and f above are determinable only on receipt of judgments / decisions pending at various forums / authorities.
g. The Board at its meeting held on 28th May, 2018 considered and recommended a dividend @ 40% i.e. Rs. 4/- per share of Rs. 10/ each for the financial year 2017-18 (Previous Year @ 30% i.e. Rs. 3/- per Share taken as deduction under Reserves & Surplus ) subject to approval of the members of the company.
h. Workmenâs Union Demand of the Company at Taloja with effect from June 1, 2017 is under negotiation, amount presently not ascertainable.
H SEGMENT information primary Business Segment
The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of customer. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset / liability.
1 employee benefits
i. General Description of defined benefit plan
The Gratuity scheme is funded with an insurance company in the form of a qualifying insurance policy.
The following tables summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognized in the balance sheet.
The estimates of future salary increase, considered in actuarial valuation, taken account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
2 EXPLANATION ON TRANSITION TO IND AS
(i) Ind AS 101 â First time adoption of Indian accounting standardsâ permits companies adopting Ind AS for the first time to take certain exemptions from the full retrospective application of Ind AS in the transition period. The company, on transition to Ind AS , has availed the following key exemptions:-
(a) Property, Plant and equipment :
The Company has elected to take the carrying value of its property, Plant & Equipment and intangible assets as per previous GAAP ( IGAAP) as its deemed cost for Ind AS as at 1st April, 2016.
(b) Investment in Subsidiary and associates
The Company has elected to take the carrying amount of the investments in subsidiary as at 1st April, 2016.
(c) Financial Instruments
The Company has designated its investment in equity instruments, other than investment in subsidiary and associate, as at Fair Value through Profit & Loss, based on facts and circumstances existed on the date of transition.
(ii) Exception applicable to company
(a) De-recognition of financial assets and liabilities
The Company has elected to apply the de-recognition provisions of Ind AS 109 ( Financial Instruments ) prospectively from the date of transition to Ind AS.
(b) Classification and measurement of financial assets
The Company has classified the financial assets in accordance with the Ind AS 109 ( Financial Instruments ) on the basis of facts and circumstances that existed as at the date of transition to Ind AS.
Notes :
1 The Company has designated its investments, which are held for trading , at Fair value through Profit & loss Account (FVPL), impact of such fair value changes as on the date of Transition is recognised in the opening reserves and changes thereafter are recognised in Statement of Profit & Loss.
2 Proposed dividend declared by the Company is accounted for once approved in the Annual General Meeting, as opposed to the earlier practice of accounting for the same after being proposed by the Board under IGAAP.
3 The Company has recognised all actuarial gains and losses on post retirement defined benefit schemes in other Comprehensive Income. Deferred taxes pertaining to these losses has also been recognized in other Comprehensive Income.
4 Other adjustment primarily includes re-measurement of retention at fair value.
5 Other Comprehensive Income includes re-measurement gains / losses on actuarial valuation of post-employment defined benefits.
3 FINANCIAL INSTRUMENTS
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 21(4)(VIII) to the financial statements.
(a) Financial assets and liabilities:
The following table presents carrying amount and fair value of each category of financial assets and liabilities.
(b) The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into level 1 to level 3, as described below :
Level-1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities
Level-2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level-3 : Techniques which use inputs that have a significant effect on the recorded Fair Value that are not based on observable market data.
(c) Financial Risk Management policies and objectives:
The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables, payables and loans and borrowings
The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowings.
Interest rate risk
The Companyâs exposure to interest rate risk is minimal as the Company does not have any significant interest earning asset or interest bearing liability. As such, the Company is not exposed to significant interest rate risk as at the reporting date.
Foreign currency risk
The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies
The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company maintains sufficient cash and cash equivalents to manage its liquidity risk.
credit Risk
Credit risk is the risk that counterparty will default on its contractual obligations resulting in a financial loss to the Company. To manage this, the Company periodically assess the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and agreeing of accounts receivables. Individual risk limit are set accordingly.
Financial assets are provided for when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for provision as per provisioning policy of the Company. Where loans or receivables have been provided, the Company continues to engage in enforcement activity to attaempt to recover the receivable due. Where recoveries are made, these are recognized in the statement of profit and loss.
A upfront processing fees on loan
The Company has amortized upfront processing fees over the term loan.
B Investments
Investments in financial assets are carried at amortized cost in Ind AS compared to being carried at cost under IGAAP.
C Other financial liabilities
Security deposits are carried at amortized cost in Ind AS compared to being carried at cost under IGAAP.
D other equity
a) Adjustments to the retained earnings have been made in accordance with Ind AS for the above mentioned items.
b) In addition, in accordance with Ind AS 19 âEmployee Benefitsâ, acturial gains and losses are recognised in other comprehensive income as compared to being recognised in Statement of Profit and Loss under IGAAP.
c) Adjustment reflected dividend (including corporate dividend tax), declared and approved post reporting period.
E Employee benefit expenses
In accordance with Ind AS 19, âEmployee Benefitsâ acturial gains and losses are recognised in other comprehensive income and not reclassified to profit and loss in subsequent period.
F Deferred tax
Ind AS 12, âIncome taxesâ, requires entities to account for deferred taxes using the balance sheet approach, which focusses on temporary differences between the carrying amount of an liability in the balance sheet and its tax base.
In the previous year, in view of the revised profitability projections, the MAT credit which were written down in the respective earlier years amounting to Rs. 3,957.22 lakhs had been recognized by the Company during the last year, on a reassessment by the management at the year end based on convincing evidence that the Company would pay normal income tax during the specified period and would therefore be able to utilize the MAT credit so recognized (which is in accordance with the recommendations contained in the Guidance Note issued by ICAI), the said asset was created by way of Credit to the statement of Profit and Loss account and shown as MAT credit entitlement. Deferred Tax Liability of Rs. 3,864.22 Lakhs provided during the previous year includes the deferred tax liability recalculated and provided on prudential basis on account of reduction of unabsorbed benefits of earlier years.
4 BUSINESS COMBINATION
During the year ended 31st March, 2018 the Company has acquired the manufacturing unit of M/s Mysore Petro Chemicals Limited with effect from 1st April, 2017 for a consideration of Rs. 7,448.00 lakhs on slump sale basis, as per the valuation by Haribhakti & Co. LLP. The transaction was accounted under Ind AS 103 â Business Combination â as a business combination with the purchases price being allocated to identifiable assets and liabilities at fair value as determined by an approved valuer.
Goodwill arose in the acquisition of above business because the cost of combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and assembled workforce of acquired business combination. These benefits are not recognised separately from goodwill as they do not meet the recognised criteria for identifiable intangible assets. The Goodwill is expected to be deductiable for Income Tax purposes.
5 disputed foreign currency liability
Foreign currency liability of Rs.4,077.11 lakhs (31st March, 2017 Rs.3,501.89 lakhs, 1st April, 2016 Rs.3,792.62 lakhs) shown under Trade Payables (Current liabilities) has been disputed. A counter claim has been made, however this liability has been converted by applying exchange rate at the close of the year as per Accounting Standard.
6 research & development
Research & Development Expenditure of Rs. 48.07 lakhs (Previous Year Rs. 49.86 lakhs) have been accounted for in the respective heads of the Statement of Profit and Loss.
7 Revenue from operations for Current year includes excise duty which is discontinued effective 1st July, 2017 upon H implementation of Goods and Service Tax (GST), In accordance with Ind AS18 GST is not included in Revenue from I operations. In view of this Revenue from operations for the year are not comparable with the previous year.
8 corporate social responsibility
As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceeding three financial years on Corporate Social Responsibility (CSR) activities.
(a) Gross amount required to be spent by the Company during the year is Rs. 146.42 lakhs, and
(b) Amount spent during the year :
9 previous year comparatives
Previous yearâs figures have been regrouped / reclassified wherever necessary to correspond with the current yearâs classification / disclosure. Previous years accounts has been audited by M/s ASA & Associates LLP (one of the Joint auditors) , and M/s Hariharan & Co. (Predecessor joint auditors)
Mar 31, 2017
1. Non-Current Liabilities
i The Term Loans are secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu charge basis with ECB lenders. It is further secured by second charge on the Current Assets of the Company. The Term Loans are further secured by personal guarantee of two directors of the company and by others.
ii The External Commercial Borrowings (ECB) is secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu basis with Term Loan lenders. The ECB is payable in 17 equal semi annual instalments from 15thSeptember, 2013.
iii Car loans are secured by the assets acquired through such finance.
2. Tax Expenses
In view of the revised profitability projections, the MAT credit which were hitherto written down in the respective earlier years amounting to Rs.3957.22 lakhs has been recognised by the Company during the year , on a reassessment by the management at the year end ,based on convincing evidence that the Company would pay normal Income tax during the specified period and would therefore be able to utilise the MAT credit so recognised (which is in accordance with the recommendations contained in the Guidance Note issued by ICAI ),the said asset is created by way of Credit to the statement of Profit and Loss account and is shown as MAT credit entitlement.
Deferred Tax Liability provided during the year includes the deferred tax liability recalculated and provided on prudential basis on account of reduction of unabsorbed benefits.
3. Segment Information Primary Business Segment
The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.
Information about Secondary Geographical Segments
4. Employee Benefits
i. General Description of defined benefit plan
The Gratuity scheme is funded with an insurance company in the form of a qualifying insurance policy.
The following tables summarise the components of net benefit expense recognised in the statement of profit and loss account and the funded status and amounts recognized in the balance sheet.
a. Profit and Loss account
Net employee benefit expense (recognized in Personnel Expenses in Note 16)
b Balance sheet
Details of Provision for gratuity
c Changes in the present value of the defined benefit obligation are as follows:
d Changes in the fair value of plan assets are as follows:
e History of Asset values. Present Beneift Obligation, Surplus/Deficit & Experience Gains/Losses - Leave
History of Asset values. Present Beneift Obligation, Surplus/Deficit & Experience Gains/Losses - Gratuity
f The principal assumptions used in determining gratuity obligations for the Companyâs plans are shown below:
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.
Provident Fund
Pending the issuance of Guidance Note from the Actuarial Society of India, the Companyâs Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at 31st March, 2017 and no provision has been made.
ii Defined Contribution Plan
Employees Benefits Expenses in Note 17 includes the following contributions to defined contribution plan
5. Derivative Instruments and Unhedged Foreign Currency Exposure
The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency. The Information on derivative instruments is as follows:
6. Disputed foreign Currency Liability
Foreign currency liability of Rs.3501.89 lakhs (Previous Year Rs.3797.62 lakhs) shown under Creditors ( current laibilities ) has been disputed, a counter claim has been made and is not likely to be settled in near future, however this liability has been convertetd by applying exchange rate at the close of the year as per Accounting Standard.
7. Research & Development
Research & Development Expenditure of Rs.49.86 lakhs (Previous Year Rs.39.49 lakhs) have been accounted for in the respective heads of the Statement of Profit and Loss.
Donation
Donation and Contribution to Charitable Institution includes payment of Rs.10 lakhs to Shiv Sena , a political party.
8. Commission to Directors
Commission payable to Managing Director, Chairman & Independent Directors totaling to 2.50% of profit, amounting to? 337.58 lakhs is subject to approval by shareholders in the ensuing annual general meeting.
9. Previous Year Comparatives
Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/ disclosure.
Mar 31, 2016
on Financial Statements
i. The Term Loans are secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu charge basis with ECB lenders. It is further secured by second charge on the Current Assets of the Company. The Term Loans are further secured by personal guarantee of two directors of the Company. The Term Loans are payable in 60 equal monthly installments from commencement of commercial production of new Phthalic Anhydride Plant i.e. 28th September 2013.
ii. The External Commercial Borrowings (ECB) is secured by Hypothecation of movable properties (other than current assets) and registered mortgage on immovable properties of the Company on first pari passu basis with Term Loan lenders. The ECB is payable in 17 equal semiannual installments from 15.09.2013.
iii. Car loans are secured by the assets acquired through such finance.
i. Working Capital facilities are secured by Hypothecation of current assets of the company i.e. stock of raw materials, stock in process, finished goods, stores & spares and book debts on first pari passu basis amongst Working Capital lenders under consortium banking arrangement excluding receivables pertaining to specific customers assigned for Factoring facilities. It is further secured by hypothecation of movable properties and registered mortgage of immovable properties of the Company on second charge basis.
Working Capital facilities are further secured by Personal Guarantee of two Directors of the Company.
ii. Factoring facilities are secured by way of exclusive first charge on receivables factored and subservient charge on other Current Assets. Further they are secured by personal guarantee of two directors of the Company.
Notes :
1. Buildings include Rs. 250/- (Previous year Rs. 250/-) for shares in office premises in a co-operative society.
2. Capital work in Progress includes preoperative expenses incurred during the year in the form of Employees benefits expense of Rs. 50.84 lacs (Previous Year Nil), Legal & Professional Fees Rs. 90.94 lacs (Previous Year Rs. Nil), Rates & Taxes Rs. 1.50 Lacs (Previous Year Nil), Other expenses Rs. 9.35 lacs (Previous Year Nil) and Plant & Machinery under construction Rs. 288.77 lacs (Previous Year Rs. 77.19 lacs).
3. Pursuant to the amendment to the Companies (Accounting Standards) Rules, 2006 by notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs, the Company has exercised the option in terms of Para 46A inserted in the Standard for long term foreign currency monetary assets and liabilities. Consequently the loss of foreign exchange of Rs. 710.66 lacs for the year and loss of foreign exchange Rs. 742.33 lacs as on 31.03.2016 has been capitalized.
NOTE - 2: TAX EXPENSES
The Company has carried forward losses and unabsorbed depreciation as per the Income Tax Act, 1961. The deferred tax assets have not been recognized considering the principle of virtual certainty as stated in the Accounting Standard AS-22-Accounting for Taxes on Income.
In view of availability of Carried Forward benefits as referred above, the Company has provided for the liability for the Current Year under Section 115 JB (MAT) of the Income Tax Act, 1961.
NOTE - 3 : SEGMENT INFORMATION
Primary Business Segment
The Company is exclusively engaged in a single business segment of manufacture and sale of organic chemicals and accordingly this is the only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to Customers within India) and revenues outside India (sales to customers located outside India). Secondary segment assets and liabilities are based on the location of such asset/liability.
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.
Provident Fund
Pending the issuance of Guidance Note from the Actuarial Society of India, the Company''s Actuary has expressed his inability to reliably measure the Provident Fund Liability. There is no deficit in the fund as at 31st March, 2016 and no provision has been made.
NOTE - 4: DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency. The Information on derivative instruments is as follows:
iv. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006
Dues to parties covered under the Micro, Small and Medium Enterprises as per MSMED Act, 2006 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.
NOTE - 5 : DISPUTED FOREIGN CURRENCY LIABILITY
Foreign currency liability of Rs. 3,797.62 Lacs (Previous Year Rs. 3,414.04 Lacs) shown under Creditors (current liabilities) has been disputed, a counter claim has been made and is not likely to be settled in near future, however this liability has been converted by applying exchange rate at the close of the year as per Accounting Standard.
NOTE - 6:RESEARCH & DEVELOPMENT
Research & Development Expenditure of Rs. 39.49 Lacs (Previous Year Rs. 39.82 Lacs) have been accounted for in the respective heads of the Statement of Profit and Loss.
NOTE - 7: PREVIOUS YEAR COMPARATIVES
Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
Accounts of the Previous year has been audited by M/s Hariharan & Co.
Mar 31, 2015
1. i. The Term Loans are secured by Hypothecation of movable properties
(other than current assets) and registered mortgage on immovable
properties of the Company on first pari passu charge basis with ECB
lenders. It is further secured by second charge on the Current Assets
of the Company. The Term Loans are further secured by personal
guarantee of two directors of the company and by others. The Term Loans
are payable in 60 equal monthly instalments from commencement of
commercial production of new Phthalic Anhydride Plant i.e. 28th
September 2013.
ii. The External Commercial Borrowings (ECB) is secured by
Hypothecation of movable properties (other than current assets) and
registered mortgage on immovable properties of the Company on first
pari passu basis with Term Loan lenders. The ECB is payable in 17 equal
semi annual instalments from 15.09.2013.
iii. Hire Purchase finance are secured by the assets acquired through
such finance.
2. i. Working Capital facilities are secured by Hypothecation of current
assets of the company i.e. stock of raw materials, stock in process,
finished goods, stores & spares and book debts on first pari passu basis
amongst Working Capital lenders under consortium banking arrangement
excluding receivables pertaining to specific customers assigned for
Factoring facilities. It is further secured by hypothecation of movable
properties and registered mortgage of immovable properties of the
Company on second charge basis.
Working Capital facilities are further secured by Personal Guarantee of
two Directors of the company and by others.
ii. Factoring facilities are secured by way of exclusive first charge
on receivables factored and subservient charge on other Current Assets.
Further they are secured by personal guarantee of two directors of the
Company.
3. Certain fixed assets of the company were revalued on the basis of
the net replacement value determined by an approved valuer during the
year ended 30.09.1999. To follow uniform valuation of all assets the
company has reinstated the historic cost value of these Fixed Assets.
Accordingly the revalued amount of Plant & Equipments and other assets
have been reversed on 01.04.2014 resulting in deduction in Gross Block
of Rs. 7,139.97 lacs under Plant & Equipments, Rs. 666.95 lacs under
Lease Hold Land and Rs. 26.20 lacs under buildings, reduction of
depreciation reserve of Rs. 5,466.36 lacs under plant & Equipment, Rs.
105.80 lacs under Lease Hold Land and Rs. 13.33 lacs under buildings
thus resulting net reversal to revaluation of reserve of Rs. 2,247.60
lacs.
4. Buildings include Rs. 250/- (Previous year Rs. 250/-) for shares in
office premises in a co-operative society. Vehicles include vehicles
with Gross book value of Rs. 323.55 lacs (Previous Year Rs. 342.96 lacs
) and Net book value of Rs. 139.35 lacs (Previous year Rs. 172.44 lacs)
acquired on Hire Purchase contracts.
5. Effective from April 1, 2014, the company has charged depreciation
based on the revised remaining useful life of the assets as per
requirement of Schedule II of the Companies Act 2013. Depreciation is
now provided on a straight line basis as against the policy of
providing on written down value basis for some assets. Had there not
been any change in useful life of Fixed Assets, the depreciation
charged for the year would have been higher by Rs. 1,035.07 Lacs.
Further carrying value of Fixed Assets, where the remaining useful life
of the assets was determined to be nil as on April 1,2014 , aggregating
to Rs. 116.69 Lacs is adjusted against the opening Surplus balance in
the Statement of Profit and Loss under Reserves and Surplus.
Depreciation for Previous Year of Rs. 2,189.32 lacs includes Rs. 385.98
lacs charged to Revaluation Reserve.
6. From April 1, 2006 to March 31, 2014 the company had provided the
depreciation for the Plant & Equipments installed in Phthalic Anhydride
Plant-2 (PA-2) on straight line method based on the balance useful life
of the assets as determined by an approved valuer instead of providing
at the rates specified in Schedule XIV of the Companies Act 1956.
Arrears arisen due to this amounting to Rs. 2,111.10 lacs for the above
period is now provided and accounted under extra ordinary item in the
statement of Profit & Loss.
7. a) Addition to Fixed Assets includes preoperative and trial run
expenses incurred during the year in the form of Employees benefits
expenses of Rs. 50.48 lacs (Previous Year Rs. 170.50 lacs), Power Fuel
& Water Charges Rs. 193.82 lacs (Previous Year Rs. 1,256.18 lacs) and
Other expenses Rs. 73.85 lacs (Previous Year Rs. 442.08 lacs).
b) Capital Work in Progress includes Plant & Equipments under
Construction Rs. 77.19 lacs (Previous Year Rs. 64.25 lacs).
8. Pursuant to the amendment to the Companies ( Accounting Standard )
Rules 2006 by notification dated 29th December, 2011 issued by the
Ministry of Corporate Affairs, the Company has exercised the option in
terms of Para 46A inserted in the Standard for long term foreign
currency monetary assets and liabilities. Consequently the Gain of
foreign exchange of Rs. 1,427.26 lacs for the year and loss of foreign
exchange Rs. 31.67 lacs as on 31.03.2015 has been capitalised.
9. TAX EXPENSES
The Company has carried forward losses and unabsorbed depreciation as
per the Income Tax Act 1961. The deferred tax assets have not been
recognized considering the principle of virtual certainty as stated in
the Accounting Standard AS-22 - Accounting for Taxes on Income.
In view of availability of Carried Forward benefits as referred above,
the Company has provided for the liability for the Current Year under
Section 115 JB (MAT) of the Income Tax Act 1961.
10. CONTINGENT LIABILITIES March March
31, 2015 31, 2014
Rs. in Lacs Rs. in Lacs
Contingent Liabilities not provided for
a. Bills of Exchange Discounted - With Banks 1,617.54 4,694.36
b. Disputed Excise & Service tax matters *
i) Cases decided in favour of the Company
which are taken further in appeal before
the appellate authorities by the department.
9,274.71 10,564.25
ii) Other Matters for which the
Company is in appeal. 1,845.96 1,969.97
(Deposits paid under protest
Rs. 854.68 Lacs
(Previous Year Rs. 854.68 Lacs)
iii) Show Cause Notices received 778.10 12,176.42
The Management is confident that
the matters will be in favour of the
company as per legal opinion obtained
/ legal precedents.
c) Claim against the Company not
acknowledged as Debt in respect of 29.63 29.63
Electricity Duty on internal
power generation.
d) Claim against the Company not
acknowledged as Debt in other matters. 489.00 489.00
(Deposits paid under protest
Rs. 489.00 Lacs (Previous Year
Rs. 489 Lacs)
e) The Income tax assessments of the
Company have been completed upto
the assessment year 2012-2013 and
while completing the assessments for 490.06 1,408.69
certain years the Income tax
Department had disallowed certain
claims of the company which had
resulted in reduction of Carried
Forward benefits available to the
company as per the Income Tax Act
1961 and the additional tax
liability that may arise amounts to:
These matters are in appeal before
the Appellate authorities. Based on
the interpretation of the relevant
provisions of the Income Tax Act,
the Company has been legally
advised by an eminent Counsel that
the matters will be in favour of the
Company.
Future cash outflows in respect of
item b, c and e above are
determinable only on receipt of
judgments / decisions pending at
various forums/ authorities.
f) Workmen''s Union. Demand of
the Company at Taloja w.e.f 1st
June, 2015 is under negotiations
amount presently not ascertainable.
*Against certain demands on these matters, the Company / Department had
filed appeal during the earlier years in the case of certain Excise /
Custom demands amounting to Rs. 6,383.34 Lacs (Previous Year Rs.
7,672.89 Lacs) before the Honourable Supreme Court which are disputed
by the Company and the matter is subjudice. Based on decisions of the
Supreme Court and other interpretation of the relevant provisions, the
Company has been legally advised by an eminent Counsel that matter will
be in favour of the Company.
NOTE - 11 : SEGMENT INFORMATION
Primary Business Segment
The Company is exclusively engaged in a single business segment of
manufacture and sale of organic chemicals and accordingly this is the
only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of
customers. The geographical segments have been disclosed based on
revenues within India (sales to Customers within India) and revenues
outside India (sales to customers located outside India). Secondary
segment assets and liabilities are based on the location of such
asset/liability.
NOTE - 12: RELATED PARTY DISCLOSURE
As required by Accounting Standard (AS)-18
i. Names of related parties where control exists irrespective of
whether transactions have occurred or not
Individuals owning, directly
or indirectly, an interest in
- the voting power that gives
them control or significant
influence
ii. Names of other related
parties with whom transactions
have taken place during the year
a. Key Management Mr. Nikunj Dhanuka -
Personnel Managing Director
Mr. R Chandrasekaran -
Chief Financial
Officer & Secretary
b. Relatives of key Mr. Umang Dhanuka -
management personnel Brother of Managing Director.
Mrs. Raj Kumari Dhanuka -
Mother of Managing Director.
Mrs. Bina Devi Dhanuka -
Uncle''s Wife of
Managing Director.
Mr. Mayank Dhanuka -
Uncle''s Son of
Managing Director.
c. Associates -
d. Enterprises owned or Mysore Petro Chemicals Limited
significantly influenced by
key management personnel
or their relatives
NOTE - 13 : EMPLOYEE BENEFITS
i. General Description of defined benefit plan Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The following tables summarise the components of net benefit expense
recognised in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet.
NOTE - 14 : EXCEPTIONAL ITEM
a. In the previous year due to significant movement and volatility in
value of Indian rupee against US dollar the net foreign exchange loss
had been considered by the Company as exceptional in nature.
b. Foreign currency liability of Rs. 3414.04 Lacs (Previous Year Rs.
3516.89 Lacs) shown under Creditors (current liabilities) has been
disputed, a counter claim has been made and is not likely to be settled
in near future, however this liability has been converted by applying
exchange rate at the close of the year as per Accounting Standard
issued by ICAI.
NOTE - 15 : RESEARCH & DEVELOPMENT
Research & Development Expenditure of Rs. 39.82 Lacs (Previous Year Rs.
33.01 Lacs) have been accounted for in the respective heads of the
Statement of Profit and Loss.
NOTE - 16 : CORPORATE SOCIAL RESPONSIBILITY
The Company has incurred Rs. 29.13 Lacs (Previous Year Rs. 23.62) on
Corporate Social Responsibility which have been accounted for in the
respective heads of the Statement of Profit and Loss.
NOTE - 17 : PREVIOUS YEAR COMPARATIVES
Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Mar 31, 2014
NOTE - 1 : TAX EXPENSES
The Company has carried forward losses and unabsorbed depreciation as
per the Income Tax Act 1961. The deferred tax assets have not been
recognized considering the principle of virtual certainty as stated in
the Accounting Standard AS-22 Â Accounting for Taxes on Income.
In view of availability of Carried Forward benefits as referred above,
the Company has provided for the liability for the Current Year under
Section 115 JB (MAT) of the Income Tax Act 1961.
As at As at
March 31, 2014 March 31, 2013
Rs. in Lacs Rs. in Lacs
NOTE - 2: CONTINGENT LIABILITIES
Contingent Liabilities not provided for
a. Bills of Exchange Discounted
- with Banks 4,694.36 374.45
b. Disputed Excise & Service tax
matters
i) Cases decided in favour of the
Company which are taken further in 10 564 25 10,564.25
appeal before the appellate authorities
by the department.
i) Other Matters for which the Company
is in appeal. (Deposits paid under I 1,969.97 1,969.97
protest Rs. 854.68 Lacs
(Previous Year Rs. 818.61 Lacs)
iii) Show Cause Notices received 12,176.42 12,030.53
The Management is confident that the matters will be in favour of the
company as per legal opinion obtained / legal precedents.
29.63 29.63
c) Claim against the Company not acknowledged as Debt in respect of
Electricity Duty on internal power generation.
d) Claim against the Company not acknowledged as Debt in other matters.
489.00 --
(Deposits paid under protest Rs. 489.00 Lacs
(Previous Year Rs. Nil)
e) Custom Duty on Raw Material under
Advance Licence pending -- 273.14
Export Obligation. (Includes Cenvat Credit
available Rs. Nil (Previous Year
Rs. 208.42 Lacs).
f) The Income tax assessments of the
Company have been completed upto 1,408.69 2,127.91
the assessment year 2011-2012 and while
completing the assessments for
certain years the Income tax Department
had disallowed certain claims of
the company which had resulted in
reduction of Carried Forward benefits
available to the company as per the
Income Tax Act 1961 and the additional
tax liability that may arise amounts to:
These matters are in appeal before the Appellate authorities. Based on
the interpretation of the relevant provisions of the Income Tax Act,
the Company has been legally advised by an eminent Counsel that the
matters will be in favour of the Company.
Future cash outflows in respect of item b, c and e above are
determinable only on receipt of judgments / decisions pending at
various forums/authorities.
* Against certain demands on these matters, the Company / Department
had filed appeal during the earlier years in the case of certain Excise
/ Custom demands amounting to Rs. 7,672.89 Lacs (Previous Year Rs. 7,672.89
Lacs) before the Honourable Supreme Court which are disputed by the
Company and the matter is subjudice. Based on decisions of the Supreme
Court and other interpretation of the relevant provisions, the Company
has been legally advised by an eminent Counsel that matter will be in
favour of the Company.
NOTE - 3 : SEGMENT INFORMATION Primary Business Segment
The Company is exclusively engaged in a single business segment of
manufacture and sale of organic chemicals and accordingly this is the
only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of
customers. The geographical segments have been disclosed based on
revenues within India (sales to Customers within India) and revenues
outside India (sales to customers located outside India). Secondary
segment assets and liabilities are based on the location of such
asset/liability.
NOTE - 4 : RELATED PARTY DISCLOSURE
Individuals owning, directly or indirectly, an interest in the voting
power that gives them control or significant influence Â
ii. Names of other related parties with whom transactions have taken
place during the year
a. Key Management Personnel
Shri. Nikunj Dhanuka - Managing Director
Shri. J.K.Saboo - Executive Director
b. Relatives of key management personnel
Shri. Umang Dhanuka  Brother of Managing Director.
Mrs. Raj Kumari Dhanuka  Mother of Managing Director.
Mrs. Santosh Saboo  Wife of Executive Director.
c. Associates Â
d. Enterprises owned or significantly influenced by key
management personnel or their relatives
Mysore Petro Chemicals Limited
NOTE - 5 : EMPLOYEE BENEFITS
i. General Description of defined benefit plan Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The following tables summarise the components of net benefit expense
recognised in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet.
NOTE - 6 : EXCEPTIONAL ITEM
a. Due to significant movement and volatility in value of Indian rupee
against US dollar the net foreign exchange loss has been considered by
the Company as exceptional in nature.
b. Foreign currency Liability of Rs. 3,516.89 Lacs shown under sundry
Creditors ( current Liabilities) has been disputed, a counter claim has
been made and is not likely to be settled in a near future, hence this
liability has not been converted by applying exchange rate at the close
of the year as the liability may not reflect with reasonable accuracy
the amount that is likely to be settled due to significant movement and
volatility in value of Indian Rupee against Euro. Had the liability
been converted as on the rates prevailing as at the close of the year
(31st March, 2014 ) as recommended in the Accounting Standard issued by
ICAI, the amount shown under exceptional item would have been higher by
Rs. 659.07 Lacs and Trade Payable as appearing in "Current liabilities"
would have been higher by the similar amount.
NOTE - 7: RESEARCH & DEVELOPMENT
Research & Development Expenditure of Rs. 33.01 Lacs (Previous Year Rs.
30.51 Lacs) have been accounted for in the respective heads of the
Statement of Profit and Loss.
NOTE - 8 : PREVIOUS YEAR COMPARATIVES
Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Mar 31, 2013
NOTE - 1 : TAX EXPENSES
The Company has carried forward losses and unabsorbed depreciation as
per the Income Tax Act 1961. The deferred tax assets have not been
recognized considering the principle of virtual certainty as stated in
the Accounting Standard AS-22 - Accounting for Taxes on Income.
In view of availability of Carried Forward benefits as referred above,
the Company has provided for the liability for the Current Year under
Section 115 JB (MAT) of the Income Tax Act 1961.
NOTE -2: CONTINGENT LIABILITIES Contingent Liabilities not provided
for
a. Bills of Exchange Discounted
- with Banks 374.45 551.16
- with Others  1,306.51
b. i) Cases decided in favour of the Company which are taken further
in 10,564.25 10,564.25 appeal before the appellate authorities by the
department.
ii) Other Matters for which the Company is in appeal. (Deposits paid
under 1,969.97 2,004.10 protest Rs. 670.60 Lacs (Previous Year Rs. 665.35
Lacs)
NOTE - 3 : SEGMENT INFORMATION
Primary Business Segment
The Company is exclusively engaged in a single business segment of
manufacture and sale of organic chemicals and accordingly this is the
only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of
customers. The geographical segments have been disclosed based on
revenues within India (sales to Customers within India) and revenues
outside India (sales to customers located outside India). Secondary
segment assets and liabilities are based on the location of such
asset/liability.
NOTE - 4 : EMPLOYEE BENEFITS i. General Description of defined
benefit plan Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The following tables summarise the components of net benefit expense
recognised in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet.
NOTE - 5 :RESEARCH & DEVELOPMENT
Research & Development Expenditure of Rs. 30.51 Lacs (Previous Year Rs.
21.74 Lacs) have been accounted for in the respective heads of the
Statement of Profit and Loss.
NOTE - 6 : PREVIOUS YEAR COMPARATIVES
Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2012
I. The Rupeee Term Loans are secured by Hypothecation of movable
properties (other than current assets) and equitable mortgage on
immovable properties of the Company on first pari passu charge basis
with ECB lender. It is further secured by second charge on the Current
Assets of the Company. The Rupeee Term Loans are further secured by
personal guarantee of two directors of the company.
ii. The External Commercial Borrowings (ECB) is secured by
Hypothecation of movable properties (other than current assets) and
registered mortgage on immovable properties of the Company on first
pari passu charge basis with Rupee Term Loan lenders.
iii. Hire Purchase finance are secured by the assets acquired through
such finance.
i. Working Capital facilities are secured by Hypothecation of current
assets of the company i.e. stock of raw materials, stock in process,
finished goods and book, debts. It is further secured by hypothecation
of movable properties and equitable mortgage of immovable properties of
the Company on second and subservient charge basis.
Working Capital facilities are further secured by Personal Guarantee of
two Directors of the Company.
ii. Factoring facility is secured by respective book debts & personal
guarantee of two directors of the Company.
Note :
1. Land, Buildings at factory site and Plant & Equipment as on
3D.09.99 were revalued on the basis of net replacement value determined
by an approved valuer resulting in an increase in value of Land by Rs
666.95 lacs, Buildings by Rs 35.53 lacs and Plant & Equipment by Rs
7,330.20 lacs which was credited to Revaluation Reserve .
2. Buildings include Rs 250/- (Previous year Rs 250/-) for shares in
office premises in a co-operative society. Vehicles include vehicles
with Gross book value of Rs 223.03 lacs (Previous Year Rs 257.54 lacs )
and Net book value of Rs 136.09 iacs (Previous year Rs 158.52 lacs)
acquired on Hire Purchase contracts.
3. Depreciation on Plant & Equipment w.e.f. 01-04-2006 is provided on
straight line method based on the balance useful iife of the assets as
determined by an approved valuer which is higher as compared to
Schedule XIV of the Companies Act, 1956. Had the depreciation been
provided on straight line method based on rates specified in Schedule
XIV of the Companies Act 1956 the depreciation charged for the year
would have been higher by Rs 859.53 Lacs (Previous Year Rs 859.28 Lacs)
and accumulated depreciation would have been higher by Rs 5213.19 Lacs
(Previous Year Rs 4,353.66 Lacs).
4. Capital work in progress includes Plant & Equipment under
construction Rs 2,129.87 lacs (Previous YearRs 1,909.86 lacs), Building
under Construction X 465.36 lacs (Previous Year Rs 366.40 Lacs),
Employees benefits expenses of Rs 194.25 lacs (Previous year Rs 174.70
lacs) and Other expenses X 299.71 lacs (Previous Year Rs 320.98 lacs),
Interest & Finance charges Rs 651.22 lacs (Previous Year Nil), less
capitalized during the year Rs 1,893.33 lacs (Previous year Rs 920.80
lacs)
NOTE - 1 : TAX EXPENSES
The Company has carried forward losses and unabsorbed depreciation as
per the income Tax Act 1961. The deferred tax assets have not been
recognized considering the principle of virtual certainty as stated in
the Accounting Standard AS-22 - Accounting for Taxes on Income.
In view of availability of Carried Forward benefits as referred above,
the Company has provided for the liability for the Current Year under
Section 115 JB (MAT) of the Income Tax Act 1961 [Further refer Note No.
13(e)],
NOTE - 2: CONTINGENT LIABILITIES
Contingent Liabilities not provided for
a. Bills of Exchange Discounted
- with Banks 551.16 1,110.36
- with Others 1,306.51 2,084.12
b. i) Cases decided in favour of
the Company which are taken further
in 10,564.25 10,564.25
appeal before the appellate
authorities by the department.*
ii) Other Matters for which the
Company is in appeal. 2,004.10 2,138.72
(Deposits paid under protest Rs
665.35 Lacs (Previous Year Rs 665.35
Lacs)
iii) Show Cause Notices received 14509.57 13424.15
The Management is confident that
the matters will be in favour of the
company as per legal opinion obtained
/' legal precedents. 1
c) Claim against the Company not
acknowledged as Debt in respect of 29.63 109.47
Electricity Duty on internal power
generation.
d) Custom Duty on Raw Material
under Advance Licence pending Export
1,785.65 1,320.59 Obligation.
(Includes Cenvat Credit available Rs
1.362.55 Lacs (Previous
Year Rs 975.45 Lacs).
e) The Income tax assessments of the
Company have been completed up to
1,597.89 1108.47
the assessment year
2009-2010 and while completing the
assessments
for certain years the Income tax Department had disallowed certain
claims of the company which had resulted in reduction of Carried
Forward benefits available to the company as per the income .Tax Act
1961 and the additional tax liability that may arise amounts to:
These matters are in appeal before the Appellate authorities. Based on
the interpretation of the relevant provisions of the Income Tax Act,
the Company has been legally advised by an eminent Counsel that the
matters will be in favour of the Company.
Future cash outflows in respect of item b, c and e above are
determinable only on receipt of judgments / decisions pending at
various, forums/authorities.
* Against certain demands on these matters, the Company / Department
had filed appeal during the earlier years in the case of certain Excise
/ Custom demands amounting to Rs 7,672.89 Lacs (Previous Year Rs 7,672.89
Lacs) before the Honourable Supreme Court which are disputed by the
Company and the matter is subjudice. Based on decisions of the Supreme
Court and other interpretation of the relevant provisions, the Company
has been legally advised by an eminent Counsel that matter will be in
favour of the Company.
f) Workmen's Union Demand of the Company at Taloja with effect from
1st June 2011 is under negotiation, amount presently not ascertainable.
NOTE - 3: SEGMENT INFORMATION Primary Business Segment
The Company is exclusively engaged in a single business segment of
manufacture and sale of organic chemicals and accordingly this is the
only primary reportable segment.
Geographical Segments
Secondary segmental reporting is based on the geographical location of
customers. The geographical segments have been disclosed based on
revenues within India (sales to Customers within India) and revenues
outside India (sales to customers located outside India). Secondary
segment assets and liabilities are based on the location of such
asset/liability.
NOTE - 4:
The Company had obtained a real opinion from an eminent legal counsel
/ also on the basis of judgment by Additional District Judge, Panaji
stating /' held that privately placed debentures cannot be construed to
be ''Debentures" for the purpose of Clause (g) of Sub Section (1)
of Section 274 of the Companies Act. 1956.
Note: Amount in bracket represents figures for previous year.
* As per contract with Mysore Petro Chemicals Limited, certain exchange
transactions of services / goods mutually beneficial have been entered
into which have not been quantified above.
NOTE - 5 : EMPLOYEE BENEFITS
i. General Description of defined benefit plan Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy,
The following tables 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.
iv. Details of dues to Micro, Small and Medium Enterprises as per
MSMED Act, 2006
There are no outstanding to parties covered under the Micro, Smail 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.
NOTE - 6:RESEARCH & DEVELOPMENT .
Research & Development Expenditure of Rs 24.64 lacs (Previous Year Rs
21.74 lacs) have been accounted for in the respective heads of the
Statement of Profit & Loss.
NOTE - 7 PREVIOUS YEAR COMPARISON
The Revised Schedule VI has become effective from April 1,2012 for the
preparation of financial statements. This has significantly changed the
disclosure and presentation made in the financial statements. Previous
year's figures have been regrouped / reclassified wherever necessary to
correspond with the current year's classification / disclosure.
Mar 31, 2010
1. Nature of Operations
IG Petrochemicals Limited (the Company) is engaged in the manufacture
of Phthalic Anhydride having its manufacturing unit at Taloja
(Maharashtra).
2. The Company had obtained a legal opinion from an eminent legal
counsel / also on the basis of judgment by Additional District Judge,
Panaji stating / held that privately placed debentures cannot be
construed to be "Debentures" for the purpose of Clause (g) of Sub
Section (1) of Section 274 of the Companies Act. 1956.
3. Fixed Deposits of Rs.639.84 Lacs (Previous Year Rs.1789.84 Lacs)
have been lodged with Banks and Rs.0.25 Lacs (Previous Year Rs.0.25
Lacs) with Government Departments as a security.
4. Depreciation:
Depreciation on Plant & Machinery for the year is provided on straight
line method based on the balance useful life of the assets as
determined by an approved valuer which is higher as compared to
Schedule XrV of the Companies Act, 1956. Had the depreciation been
provided on straightline method based on rates specified in Schedule
XIV of the Companies Act 1956 the depreciation charged for the year
would have been higher by Rs.866.22 Lacs (Previous Year Rs. 869.35
Lacs) and accumulated depreciation would have been higher by Rs.3494.38
Lacs (Previous Year Rs.2628.16 Lacs).
5. Loans and Advances includes a sum of Rs.903.00 Lacs towards claims
preferred on account of Loss of Profit Claim of Rs.150.00 Lacs and fire
claim of Rs.753.00 Lacs with the Insurance Company on the basis of loss
/ expenses incurred by the Company which are pending settlement with
the Insurance Company. The Management is of the view that this is fully
recoverable & considered good.
6. (i) The Company has carried forward losses and unabsorbed
depreciation as per the Income Tax Act 1961. The deferred tax assets
have not been recognized considering the principle of virtual certainty
as stated in the Accounting Standard AS-22 - Accounting for Taxes on
Income.
(ii) In view of availability of Carried Forward benefits as referred
above, the Company has provided for the liability for the Current Year
under Section 115 JB (MAT) of the Income Tax Act 1961 ( Further refer
Note No. 13(e).
7. Segment Information
Primary Business Segment
The Company is exclusively engaged in a single business segment of
manufacture and sale of organic chemicals and accordingly this is the
only primary reportable segment.
8. Provisions and Contingencies
Contingent Liabilities not provided for
(Rs. in Lacs)
March
31,2010 March 31, 2009.
a. Bills or Exchange Discounted
with Banks 130.41 1,409.56
with Others 2,195.06 646.56
b. Excise Matters
i) Cases decided in favour of the Company
which are taken further in
appeal 5,543.98 4.878.63
before the appellate authorities by
the department.
ii) Other Matters for which the Company is
in appeal. 2,011.66 8,074.16
(Deposits paid under protest Rs.665.35
Lacs (Previous Year
Rs.665.35 Lacs)
iii) Show Cause Notices received 12,640.26 11,121.46
* Against certain demands on these matters, the Company / Department
had filed appeal during the earlier years in the case of certain
Excise/ Custom demands amounting to Rs. 1128.02 Lacs before the
Honourable Supreme Court (Previous Year Rs.7048.69 Lacs before the
Honourable Supreme Court / Honourable High Court of Mumbai) which are
disputed by the Company and the matter is subjudice. Based on decisions
of the Supreme Court and other interpretation of the relevant
provisions, the Company has been legally advised by an eminent Counsel
that matter will be in favour of the Company.
9. Research & Development Expenditure of Rs.23.25 Lacs (Previous Year
Lacs) have been accounted for in the respective heads of the Profit and
Loss Account.
10. Previous Year Comparatives
Previous years figures have been regrouped wherever necessary to
conform to this years classification.
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