Gulf Oil Corporation

1.  Demerger of Speciality Chemicals Division of the Company and merger
 of Agro Division of IDL Speciality
 
 Chemicals Limited with the Company. (the Scheme)
 
 1.1 Pursuant to a Scheme of Arrangement between the Company and IDL
 Speciality Chemicals Limited (IDL SC) and their respective
 shareholders, which was sanctioned by the Honourable High Court of
 Andhra Pradesh by its Order dated 24th March, 2009, the assets and
 liabilities of the Speciality Chemicals Division of the Company were
 transferred to and vested with IDL SC with effect from 1st April, 2008
 and the assets and liabilities of Agro Division of IDL SC were
 transferred and vested with the Company with effect from 1st April,
 2008. The Scheme has, accordingly been given effect to in these
 financial statements in accordance with the Sanctioned High Court
 order.
 
 1.2 As provided in the Scheme, the debit balance of Rs.87.04 Lakhs in
 the Profit & Loss Account as at 1st April, 2008 of Agro Division of IDL
 SC has been adjusted against the Revaluation Reserves.
 
 1.3 (a) Pursuant to the Scheme, 97,60,000 equity shares of Rs.10/- each
 of IDL Speciality Chemicals Limited are to be
 issued to the Company towards Rs.6374.14 Lakhs, representing the excess
 of assets over liabilities of the Speciality Chemicals Division
 transferred to IDL SC. Pending allotment, an amount of Rs.6374.14 Lakhs
 has been included in Investments Schedule 6 as Shares in IDL SC
 Pending allotment.
 
 (b) In accordance with the Scheme, the Company is required to discharge
 the obligations of IDL Speciality Chemicals Limited and IDL Speciality
 Chemicals Limited in turn would re-imburse the Company. Accordingly,
 the liabilities of IDL Speciality Chemicals Limited discharged/ to be
 discharged by the Company aggregating to Rs.2699.59 Lakhs has been
 included as part of Loans and Advances (Schedule 10)
 
 1.4 The adjustment to Revaluation Reserve of (a) the debit balance in
 the profit and loss account of IDL SC as at 1st April, 2008, amounting
 to Rs.87.04 Lakhs (refer Note 2.2 above) and (b) the effect of
 valuation / restatement / revision of certain assets and liabilities of
 the Company is Rs.25283.72 Lakhs [Refer Note 2.4 above] which has been
 made in pursuance of the Scheme approved by the Honourable High Court
 of Andhra Pradesh, at Hyderabad, is at variance with the Accounting
 Standards notified by the Companies (Accounting Standard) Rules, 2006.
 Had these been accounted for in accordance with the Accounting
 Standards and other guidance on accounting issued by the Institute of
 Chartered Accountants of India, the net impact (debit) on the Profit &
 Loss Account for the year would have been Rs.24357.67 Lakhs.
 
 2.  Contingent Liabilities
 
                                           As at                 As at
                                         31.03.2009            31.03.2008
                                        (Rs. Lakhs)          (Rs. Lakhs)
   
 (a) Corporate Guarantees                  441.00               349.02
 (b) Bills discounted                      311.46               277.84
 (c) Claims against the Company not acknowledged as debts hence not
 Provided
 (i) Income Tax Demands                    875.31                34.93
 (ii) Sales Tax Demands                     86.02              3219.89
 (iii) Excise Demands                       20.66               479.01
 (iv) Service Tax                            4.49                  -
 (v) Additional Demands towards cost of land 3.81                 3.81
 (vi) Claims of workmen/ex-employees        83.99                79.40
 (vii) Other Matters                       259.54               564.33
 (viii) Performance and Other Guarantees   171.72                75.26
 14.  SECURED LOANS:
 
 (a) Cash Credit facilities including foreign currency demand loan from
 Bank of Bahrain & Kuwait BSC and working capital Loan from Consortium
 Banks is secured by hypothecation of all current assets of the Company
 including raw materials, finished goods, stocks-in-process, stores and
 spares (not relating to Plant & Machinery) and present and future book
 debts of the Company ranking pari-passu and by second charge on land
 owned by the Company situated at Hyderabad, buildings and fixed assets
 of the Company both present and future, ranking pari- passu with other
 working capital lenders.
 
 (b) (i) Term loan for Capital Expenditure from State Bank of India is
 secured by first charge on the fixed assets
 created out of the loan, ranking pari-passu with other term lenders and
 second charge on land owned by the Company situated at Hyderabad,
 buildings and fixed assets of the Company both present and future,
 ranking pari-passu with other working capital lenders.
 
 (ii) Term Loan for Overseas Investment is secured by second charge on
 land owned by the Company situated at Hyderabad, buildings and fixed 
 assets of the Company both present and future, ranking pari-passu with 
 other working capital lenders.
 
 (c) (i) Term loan for Capital Expenditure from State Bank of Hyderabad
 is secured by first charge on the fixed
 assets created out of the loan ranking pari-passu with other term
 lenders and second charge on land owned by the Company situated at
 Hyderabad, buildings and fixed assets of the Company both present and
 future, ranking pari-passu with other working capital lenders.
 
 (ii) Term Loan for Overseas Investment is secured by second charge on
 land owned by the Company situated
 at Hyderabad, buildings and fixed assets of the Company both present
 and future, ranking pari-passu with other working capital lenders.
 
 (d) The Term loan for Capital Expenditure from Oriental Bank of
 Commerce is secured by first charge on the fixed assets created out of
 the term loan ranking pari-passu with other term lenders and second
 charge on land owned by the Company situated at Hyderabad, buildings
 and fixed assets of the Company both present and future, ranking
 pari-passu with other working capital lenders.
 
 (e) The Term loan for Capital Expenditure from Andhra Bank is secured
 by first charge on the fixed assets created out of the term loan
 ranking pari-passu with other lenders and second charge on land owned
 by the Company situated at Hyderabad, buildings and fixed assets of the
 Company both present and future, ranking pari-passu with other working
 capital lenders.
 
 (f) Fixed Deposits to the extent of Rs.375.86 Lakhs were secured by a
 second charge on all tangible movable property and fixed assets
 including all movable machinery and plant & machinery, spares and
 stores, tools and accessories and other movables both present & future
 as approved by the Controller of Capital Issues vide his letter dated
 1st November, 1980.
 
 (g) Term Loans from ABN Amro Bank NV, SREI Infrastructure Finance
 Limited, Kotak Mahindra Bank Limited are secured by way of first charge
 on specific mining equipment of the Company
 
 (h) Loan received from Hinduja Ventures Limited is secured by an
 exclusive charge on the Companys land at Yalahanka, Bangalore.
 
 3.  FIXED ASSETS
 
 Buildings include:
 
 (i) Rs.7.09 Lakhs, which represents the cost of ownership flats Rs.7.08
 Lakhs and Rs.0.01 Lakhs being the value of Share money in Sett Minar
 Co-operative Housing Society Limited.
 
 (ii) Rs.4.70 Lakhs, which represents the cost of ownership flats
 Rs.4.43 Lakhs and Rs.0.27 Lakhs being the value of 270 ordinary shares
 of Rs.100 each, fully paid up in Shree Nirmal Commercial Limited.
 
 4.  INVESTMENT IN SUBSIDIARY COMPANIES:
 
 The Company has investments in its subsidiary of Rs.71.91 Lakhs (31st
 March 2008; Rs.71.91 Lakhs) in Gulf Oil Bangladesh Limited (GOBL).
 
 GOBL has accumulated losses. However, having regard to the long term
 involvement of the Company in this company, management is of the view
 that no provision is required on this account.
 
 5.  MISCELLANEOUS:
 
 (a) The net exchange gain / (loss), (i.e., difference between the spot
 rate on the dates of the transactions and the actual rate at which the
 transactions are settled/appropriate rates applicable at the year end)
 debited to Profit & Loss Account is Rs.2579.61 Lakhs (Previous year
 credit of Rs.223.45 Lakhs).
 
 (b) Exchange difference in respect of forward exchange contracts to be
 recognised in the Profit and Loss Account in the subsequent accounting
 period is Rs.3.59 Lakhs (loss) (Previous year credit of Rs.8.65 Lakhs)
 
 (c) (i) The Company has entered into the following derivative
 instruments:
 
 The following are the outstanding Forward Exchange Contracts entered
 into by the company as on 31st March, 2009:
 
 6.  INCOME FROM PROPERTY DEVELOPMENT:
 
 The Company in an earlier year entered into Option for Development
 Rights with Hinduja Realty Ventures Limited (HRVL) (formerly Aasia
 Property Development Limited) wherein, HRVL has only the right to
 decide whether or not to exercise the option to acquire the development
 rights in respect of certain properties of the Company located at
 
 Hyderabad and Bangalore. The offer of grant of the development rights
 in respect of the said properties by the Company is open up to 30th
 September, 2007 and further extended to 31st July, 2008. In the current
 year the validity to exercise the option for development rights has
 been extended in respect of Bangalore and Hyderabad Property in view of
 delay in receipt of approvals from the appropriate authorities. In
 consideration of the Company agreeing to keep such offer open HRVL has
 paid a further amount of Rs.1050 Lakhs (previous year Rs.300 Lakhs) as
 a non refundable commitment amount for extending the agreement. If the
 option for development is exercised by HRVL, Development Agreements for
 the respective properties would be entered with the Company, wherein
 the Company shall be entitled to share of the Gross Sale Proceeds (as
 determined in the agreement) realized from the sale of buildings
 constructed on the said properties.
 
 The consideration received on extension granted through the above
 agreements has been included under Income from Property Development
 in the Profit and Loss account.
 
 7.  Land meant for property development situated at Bangalore and
 Hyderabad had been revalued as at 31st March, 2008, based on a
 valuation by an approved valuer. The resultant surplus on such
 revaluation amounting to Rs.183,896.69 Lakhs had been credited to
 Revaluation Reserve last year. In view of steep recession in the realty
 sector, management has reassessed the valuation of the aforesaid
 properties as on 31st March, 2009 and based on the guidelines issued by
 the Registration and Stamps Department of Karnataka & Andhra Pradesh,
 the value of the subject lands has been reassessed and, the resultant
 surplus on revaluation amounted to Rs.43799.82 lakhs. The resultant
 write down aggregating to Rs.140096.87 Lakhs has, in accordance with
 the requirement of Accounting Standard-10 Accounting for Fixed assets
 been debited to Revaluation Reserve.
 
 8.  (a) The figures for the current year are not comparable with those
 of the previous year as the figures for the previous
 
 year include transactions relating to Speciality Chemicals Division
 transferred to IDL Speciality Chemicals Limited and the figures for the
 current year include transactions relating to Agro Division of IDL
 Speciality Chemicals Limited (Refer Note 2)
 
 (b) Previous years figures have been regrouped / recast wherever
 necessary.