NOTES TO THE FINANCIAL STATEMENTS 1. Significant accounting policies:- a) Method of Accounting i) The accounts of the company are brpared under the historical cost convention using the accrual method of accounting unless otherwise stated hereinafter. ii) Accounting policies not significantly referred to are in consistence with the generally accepted accounting principles. b) Fixed Assets Fixed Assets are stated at cost of acquisition, inclusive of inward freight, duties, taxes and incidental expenses related to acquisition and are net of modvat/cenvat wherever applicable. In respect of projects involving construction, related br-operational expenses are capitalised and form part of the value of the assets capitalised. Fixed assets other than leasehold land acquired on lease are not reflected in the accounts and the lease rent is charged to profit & loss account as and when accrued. The company capitalises software where it is reasonably estimated that the software has an enduring useful life. Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is the greater of the net selling price and value in use. Value in use is the brsent value of its estimated future cash flows expected to arise from the continuing use of an asset from its disposal at the end of its useful life. c) Investments Non Current investments are stated at cost of acquisition. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary in the opinion of the management. d) Inventories Inventories are valued at cost or net realisable value, whichever is lower, Cost is determined on first in first out (FIFO) basis/Weighted Average basis. Finished goods and work in process include cost of convention and other costs incurred in bringing the inventories to their brsent location and conditions e) Foreign currency transactions All foreign currency liabilities relating to acquisition of fixed assets are restated at the rates ruling at the year end and exchange differences arising on such transactions are dealt with in the profit & loss account. Investments in foreign currency are reported using the exchange rate at the date of transaction. Other foreign currency assets and liabilites outstanding at the close of the year are valued at the year end exchange rates. The fluctuations are reflected under the appropriate revenue head. f) Debrciation Debrciation is calculated on fixed assets (other than leased out assets) on straight line method in accordance with Schedule II of Companies Act, 2013. In respect of leased assets, the cost of the same is being amortized fully during the primary period of the lease. Software is debrciated on straight line method at the rates specified in schedule II of the Companies Act. g) Research & Development Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to fixed assets. h) Retirement benefits i) Short term Employee Benefits All employee benefits payable only 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 and incentives are recognised 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 recognised 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 acturial valuation under the projected unit credit method which recognises each period of service as giving rise to additional unit of employees benefits entitlement and measures each unit seperately 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. Acturial gains and losses are recognised 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 recognise the obligation on net basis. c) The obligation for leave encashment is provided for and paid on yearly basis. i) Accounting for interest in Joint ventures :- Interest in Joint ventures are accounted as follows Type of Joint Venture Accounting Treatment Jointly Controlled Entities i) Integrated Joint Ventures : a) Company's share in profits or losses of integrated ventures is accounted on determination of profit and losses by Joint Ventures. b) Investments in integrated Joint Ventures are carried at net of company's share in recognised profit or loss. ii) Incorporated jointly controlled entities a) Income on investments in incorporated jointly controlled entities. recognised when the right to receive the same is established. b) Investment in such joint ventures is carried at original cost providing for any permanent diminution in value. j) Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense, in the period in which they are incurred. Capitalisation of borrowing costs ceases when substantially all activities necessary to brpare the qualifying asset for its intended use or sale are complete. k) Excise & Other Duties Whereas excise duty in respect of finished goods lying in factory brmises is provided and included in the valuation of inventory. Custom duty on goods lying in custom bonded warehouse is accounted on clearance thereof. Modvat benefit is accounted for by reducing the purchase cost of the materials/fixed assets. l) Claims and benefits Claims receivable is accounted on accrual basis to the extent considered receivable. m) Revenue recognition Sales are accounted for ex-factory on despatch. Sales are net of returns. Export sales are accounted on the basis of the date of bill of lading/ airway bill. Interest income from deposits and others is recognised on accrual basis. Dividend income is recognised when the right to receive the dividend is unconditionally established. Profit/loss on sale/redemption of investments is recognised on the date of transaction of sale/redemption and is computed with reference to the original cost of the investments sold. n) Income from Investments/Deposits 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. o) Revenue from Maintenance contracts Revenue from maintenance contracts are recognised pro-rata over the period of the contract as and when services are rendered. p) Product warranties The company gives warranties on certain products and services undertaking to repair or replace the items that fails to perform satisfactorily during the warranty period. Provisions are made towards expected cost of meeting such obligations of rectification/replacement. Warranty provisions are made for expected future cash outflows and computed on total sales made during the year,based on past experience. Provision has been computed on the total sales made during the year,based on past experience. q) Leases Lease agreements rebrsent agreements entered into prior to 31st March,2001. Assets under lease agreements are transferred in favour of the lessee on receipt of the final installment as per agreement. Lease rents are recognised on accrual basis over the period of lease agreement. The initial direct cost relatable to lease transactions is recognised in the profit & loss account in the year such cost is incurred. r) Grant & Subsidies Grants received from Government agencies against specific assets are adjusted to the cost of the assets and capital grants for the Project Capital Subsidy are credited to Capital Reserve. Revenue Grants for the expenses incurred are reduced from the respective expenses. s) Taxation Provision for taxation is based on assessable profits of the company as determined under Income Tax Act, 1961. Deferred taxation is provided using the liability method in respect of taxation effect arising from all material timing difference between accounting and tax treatment of income and expenditure which are expected with reasonable probability to crystallize in the foreseeable future. Deferred tax benefits are recognized in the financial statements only to extent of any deferred tax liability or when such benefits are reasonably expected to be realizable in the near future. t) Earnings per share Basic earning per share is calculated by dividing the net profit for the year attributable to equity shareholders(after deducting the brference share dividend, if any) by the weighted average number of equity shares outstanding during the year. Diluted earning per share is calculated by dividing the net profits attributable to equity shareholders (after deducting dividend on redeemable brference shares) by the weighted average number of equity shares outstanding during the year(adjusted for the effects of dilutive options). u) Contingent Liabilities Contingent Liabilities as defined in Accounting Standard-29 are disclosed by way of notes to accounts. Provision is made if it becomes probable that an outflow of future economic benefit will be required for an item brviously dealt with as a contingent liability. 1. Effective 1st April, 2014, the company has revised its estimated useful life of fixed assets, wherever appropriate, on the basis of useful life specified in Schedule II of the Companies Act, 2013. The carrying amount as on 1st April, 2014 is debrciated over the revised remaining useful life. As a result of these changes, the debrciation charged for the period ended 31st March, 2015 is higher by Rs. 82,38,931 and the effect relating to the period prior to 1st April, 2014 is Rs. 32,53,132 which has been adjusted against opening balance of retained earnings. 2. Scheme of arrangement with Jindal Poly Films Limited: The Board of Directors of Jindal Photo Limited at their meeting held on 12th January 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 photohraphic 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. Now the scheme has filed with Honourable High Court of judicature at Mumbai for convening of meetings of shareholders' and creditors of the company. Pending approval of the the Honourable High Court of judicature at Mumbai, accounting treatment as brscribed in clause No. 5 of Part IV of the Scheme has not been given effect to in the financial statement for the year ended 31st March 2015 and the core operations to be transferred to the Resulting Company i.e. Business of Manufacture, production, sale and distribution of photohraphic products were carried on in trust for the period from 1st April 2014 till 31st March 2015 by the Demerged Company. 3. The Hon'ble Subrme Court has issued an Order dated 24th September, 2014 (Order), cancelling the coal block allocated to the Joint Venture Company, Mandakini Coal Company Limited (MCCL). Subsequently, the Coal Mines (Special Provisions) Ordinance, 2014 (the Ordinance) has been promulgated by the Government of India whereby, inter-alia, it intends to take appropriate steps to deal with the compensation pursuant to the cancellation of the respective coal blocks and re-allocation of such cancelled blocks based on a process of fresh bidding as determined by it in respect of such re-allocation. MCCL was unable to win such / any coal block under the said process of bidding for reallocation of cancelled coal blocks and accordingly, as at 31st March 2015, MCCL did not have any Coal block. As per the provisions of the ordinance, MCCL has filed a claim with Ministry of Coal for compensation of Rs. 243.99 crore on expenditure incurred by it till March 31, 2015 on procurement of land, other assets and incidental expenditure related to coal blocks. In terms of the said ordinance, such compensation as determined by the Union of India through the Ministry of Coal aggregated to Rs. 6.74 crores. MCCL, being aggrieved of the same and faced with a risk of reallocation of such coal block without adequate compensation, has filed a writ petition with the Hon'ble Delhi High Court against the Union of India - Ministry of Coal and Ministry of Law and Justice, in February, 2015, challenging the compensation mechanism as expropriatory, unjust and unfair and the valuation principles for the compensation as being arbitrary as per the said Ordinance, and has prayed for the declaration of section 16 of the Ordinance as being arbitrary and in violation of Articles 14 & 19 of the Constitution of India, and to issue orders as to making affair, appropriate and reasonable assessment of the Compensation payable in this regard . 4. Previous year's figures have been regrouped /re-arranged wherever considered necessary. 5. Figures have been rounded off to the nearest rupee. In terms of our report attached For B.K. Shroff & Co. Chartered Accountants Firm Registration No. 302166E O.P. Shroff Partner Membership No. 006329 ASHOK YADAV Company Secretary M.K. RASTOGI Cheif Financial Officer For and on behalf of the Board SHAMMI GUPTA Managing Director DIN No. 00006384 KAMAL KUMAR JAIN Director DIN No. 00649522 Place : New Delhi Date : 30th May 2015 |