STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES I. Basis of Accounting a) The financial statements have been brpared to comply with the Accounting Standards referred to in section 133 and the relevant provisions of The Companies Act, 2013 .The financial statements have been brpared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the Company unless otherwise stated. b) All assets and liabilities are classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, 12 months has been considered by the Company for the purpose of current/ non-current classification of assets and liabilities. ii. Recognition of Income and Expenditure All revenues and expenditures are accounted for on accrual basis except wherever stated otherwise. iii. Sales Sales, other than export sales, are inclusive of Excise Duty and shown net of returns and discounts. The Company is engaged in the business of manufacturing & sales of various types of films of various dimensions and grades. As per the company's usual policy, the low graded/surplus stock of films are sold at special discounted prices and such discounts are adjusted in unit sale price. iv. Tangible Assets Tangible Assets are stated at cost less debrciation. v. Debrciation Debrciation on fixed assets has been calculated on the basis of useful life of fixed assets as specified in Schedule-II of the Companies Act, 2013. However in case of plant and machineries where ever applicable, higher/lower debrciation rates are charged based upon residual useful life. vi. Investments Current Investments are valued at acquisition cost or market value whichever is lower. Non- Current investments(Long Term) are valued at acquisition cost. Diminution in value of Non-Current investment is provided only if such a diminution is other than temporary in the opinion of the management vii. Inventories Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence ,if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective brsent location and condition. Cost of raw materials is determined on FIFO basis, cost of process chemicals, stores, packing materials are determined on weighted average basis. Non usable wastes are valued at net realizable value. viii. Excise Duty Excise duty is accounted for and included in the closing stock valuation of finished goods. ix. Foreign Currency Transactions Exchange difference arising on repayment of foreign currency liabilities taken for the purpose of acquiring fixed assets, which are carried in terms of historical cost, are recognized as income or expenses for the year as the case may be. Exchange difference arising due to reinstatement of outstanding foreign currency loans taken for acquiring the fixed assets, by applying the closing rate of such foreign currency or the rate as per forward exchange contract if any, are recognized as income or expenses for the year as the case may be. Exchange difference arising on foreign currency transactions other than those relating to liabilities incurred for the purpose of acquiring fixed assets, are recognised as income or expenses for the year as the case may be. Any profit or loss arising on cancellation or renewal of a forward exchange contract in those cases is also recognised as income or expense for the year. All current assets and current liabilities in any foreign currency outstanding at the end of the year are translated by applying the closing rate or the rate as per forward exchange contract, if any. x Export Benefits Export incentives in the form of Duty Draw back benefit is accounted for on accrual basis and treated as income from operations. Advance licenses obtained against actual export made are being accounted on accrual basis based upon difference between domestic vs. imported raw material prices brvailing at the end of the period and is adjusted to raw material cost. xi Employee Benefits i. Short term Employee Benefits All employee benefits payable within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages etc. and the expected cost of bonus, exgratia, incentives are recognized in the period during which the employee renders the related service. ii. Post employment Benefits (a) Defined Contribution Plans State Government Provident Fund Scheme is a defined contribution plan. The contribution paid/payable under the scheme is recognized in the profit & loss account during the period during which the employee renders the related service. (b) Defined Benefit Plans The employee Gratuity Fund Scheme managed by a trust is a defined benefit plan. The brsent value of obligation under such defined benefit plan is determined based on actuarial valuation under the projected unit credit method which recognizes each period of service as giving rise to additional unit of employees benefits entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the brsent value of future cash flows. The discount rates used for determining the brsent value of the obligation under defined benefit plans is based on the market yields on government securities as at balance sheet date, having maturity periods approximated to the returns of related obligations. Actuarial gains and losses are recognized immediately in the profit & loss account. In case of funded plans the fair value of the planned assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on net basis. (c) The obligation for leave encashment is provided for and paid on yearly basis. xii. Borrowing Costs Borrowing costs that are directly attributable to the acquisition of assets are being capitalized as part of the cost of that asset up to the date of such asset is ready for its intended use. All other borrowing costs are charged to revenue in the period when they are incurred. xiii. Taxation a) Current Year Charge Provision for Income-tax is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961. b) Deferred Tax The company provides for deferred tax using the liability method, based on the tax effect of timing difference resulting from the recognition of items in the financial statements and in estimating its current income tax provision. xiv. Earnings per share Earning per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. xv. Miscellaneous Expenditure Preliminary expenditure/ share issue expenses are being written off over a period of five years. xvi. Expenses during construction period Expenses incurred during construction period are capitalised as part of the cost of that asset up to the date of such asset is ready for its intended use, except where some expenditure paid during subsequent year pertaining to already installed Asset. xvii Impairment of Assets An Asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Impairment Loss is charged to Profit & Loss A/c in the year in which impairment is identified. xviii Income from investments/Deposit Income from investments is credited to revenue in the year in which it accrues. Income is stated in full with the tax thereon being accounted for Under Income tax deducted at source. Dividend income is booked, when the owner's right to receive its investments payment in shares established. xix Claims and benefits Claims receivable is accounted on accrual basis to the extend considered receivable. xx Contingent Liability Contingent Liabilities, if material, are disclosed by way of notes. NOTE NO. 2 2.1 Pursuant to the adoption of Accounting Standards referred to Section 133 of the Companies Act 2013 and notification no.G.S.R.914 (E) dated 29th December, 2011 and as required by Accounting Standard 11, Loss of Rs 2,98,350,55 lacs (brvious year loss of Rs 26,76,48,936 lacs) on translation/settlement of foreign currency monetary items including borrowings have been shown as exceptional items in the profit and loss account. 2.2 A sum of Rs.13,11,88,659 (brvious year Rs.4,56,76,415) being the difference between domestic vs. imported raw material prices brvailing at the year ended on 31st March 2015 on account of advance licenses excess utilized for which exports are yet to be made, has been adjusted in the cost of raw material. 2.3 Advance receivable in cash or in kind includes Rs. 2,82,54,171 (Previous Year Rs. 2,82,54,171 ) being the amount of custom duty deposited against import of capital goods assessed under provisional assessments in earlier year. 2.4 Non – Current Investment includes 6 shares of Jindal Films India Ltd (Previously known as Jindal Metal & Mining Ltd). of which the Company is beneficial owner are held by certain individuals in fiduciary capacity. 2.5 Certain old balances of sundry debtors and sundry creditors are subject to reconciliation and confirmation. 2.6 Under the Package Scheme of Incentive 2001/2007 approved by the Government of Maharashtra, the Company is entitled to industrial promotion subsidy to the extent of 100% of the fixed capital investment or to the extent of taxes paid to the State Government within a period of 7 years, whichever is lower. During the year amount of subsidy receivable under the above said scheme amounting to Rs 51,57,72,707 (brvious year Rs 51,20,30,553) has been added to Capital Reserve . 2.7 In the opinion of the Board and to the best of their knowledge and belief, the realizable value of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet. 2.8 Stores and spares consumed and salaries and wages incurred during the year for repair and maintenance of plant & machinery and sheds & building, have been charged to the former accounts wherever separation is not ascertainable. 2.9 The Company has not received from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given. 2.10 The Export obligation undertaken by the company for import of capital equipments under EPCG scheme of the Central Government at the concessional rate of custom duty are in the opinion of the management expected to be fulfilled within their respective due dates/extended due date. 31.16 During the year the Company had invested INR 191.20 Crore in the zero percent Optionally Convertible Preference Shares at a par and Rs 38.50 Crore in the Zero Percent Redeemable Preference share Capital of Jindal India Powertech Limited (JIPL), a group company. JIPL is the holding Company of Jindal India Thermal Power Limited (the borrower), which is setting up Power Plant ( 600 X 2 MW) at Derang, Distt Angul, Odisha. The Company has already commenced its commercial production. Due to various reasons beyond the control of Borrower, there were delays in the implementation of the project and consequently the project cost has been increased. The Borrower had tied-up with its Lenders, for financing the increased project cost in the ratio of 70:30. In terms of resolution passed by the Board of Directors of the company from time to time, and the last one on 17th Mar 2015, the Company, JIPL and Jindal Photo Limited has jointly and severally undertaken to meet the shortfall and other cost overrun of the JITPL (the borrower) in the manner and form satisfactory to the Lenders. The said investments in JIPL have been made in compliance of the undertaking given to the Lenders of the Borrower and as per the board resolution passed by the Board of Directors as above. 2.11 The Board of Directors of the Company (Jindal Poly Films Ltd.) had, at its meeting held on January 12, 2015 approved the scheme of arrangement (‘the scheme’) between Jindal Photo Limited (“Demerged Company”) and Jindal Poly Films Limited (“Resulting Company”) for the demerger of the demerged undertaking (as defined in part (III) of the Scheme – Business of Manufacture, production, sale and distribution of photographic products of demerged company into the Resulting Company. As per the scheme, the Demerged Undertaking of Jindal Photo Limited will stand transferred to the Resulting Company with effect from 1st April 2014, the Appointed Date. The scheme has already been approved by BSE Limited(“BSE”) and National Stock Exchange of India Limited (“NSE”) vide letter dated 11.03.2015 & 12.03.2015 respectively Further Hon’ble Allahabad high Court called a court convened meeting of Shareholders, Secured Creditors and Unsecured Creditors on 6th June, 2015. The Scheme shall be implemented only upon and subject to all conditions brscribed in the Scheme, including approval of the Public Shareholders and the approval and sanction by the Hon’ble High Courts. 2.12 The Company Pledged 3,61,08,000 equity sharers of Rs 10/ each of Global Nonwoven Limited "GNL" a subsidiary Company and mortgaged 26.54 acres land of the Company situated at Nasik Maharashtra (Leased out to GNL) to SBICAP Trustee Company Limited as security for Rs 287.70 crore loan availed by GNL from consortium of Bankers. 2.13 Corporate Social Responsibility: The Company has incurred an expenditure of Rs. 7,46,900/- towards various schemes of Corporate Social Responsibility of promoting education, health care, eradication of hunger and malnutrition as brscribed under section 135 of companies act 2013. Gross amount required to be spent by the Company during the year Rs 217 Lacs. The company spent during the year is Rs 7.47 Lacs only. 2.14 Previous year's figures have been regrouped and/or rearranged wherever required. As per our report of even date annexed hereto For Kanodia Sanyal & Associates Chartered Accountants Firm Registration No : 008396N (R. K. KANODIA) Partner M No: 016121 (Sanjay Mittal) Whole-time Director DIN - 01327274 (Sumita Dhingra) Whole-time Director DIN - 06929317 (Manoj Gupta) Chief Finance Officer (Sanjeev Kumar) Company Secretary ACS - 18087 Place : New Delhi Date : 30th May, 2015 |