Home  »  Company  »  Ecoplast L  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Ecoplast Ltd.

Mar 31, 2015

1. Corporate Information

Ecoplast Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the business of manufacturing, processing and selling of Co-extruded Plastic Film for packaging and industrial applications. The principal place of business of the company is at Abrama-Valsad. The Company caters to both domestic and international markets. It has various certifications like ISO 9001, ISO 14001 and ISO 22000 registration for products thereby complying with globally accepted quality standards.

NOTE NO. 2 : DISCLOSURE IN ACCOUNTANCY WITH REVISED AS-13 ON "ACCOUNTING FOR INVESTMENTS"

In respect of Investment of Rs. 153.72 Lacs (Previous Year : Rs. 153.72 Lacs) made in Subsidiary Company Synergy Films Pvt. Ltd. the accumulated losses as per audited accounts as at 31st March, 2015 amounts to Rs. 316.92 Lacs (Previous Year : Rs. 326.41 Lacs) representing the erosion of the entire net worth of the Subsidiary company due to operational losses. The company has, at the close of the year, assessed the carrying value of its investments and based on such assessment, the company has not made any provision during the year (Previous Year - NIL) for permanent diminution in the value of its investments in Synergy Films Pvt. Ltd.

NOTE NO. 3 DISCLOSURES UNDER ACCOUTING STANDARD AS15

Particulars

Employee benefit plans

Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 24,20,399 (Year ended 31 March, 2014 Rs. 20,50,348) for Provident Fund contributions and Rs. 18,10,660 (Year ended 31 March, 2014 Rs. 15,86,066) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

NOTE NO. 4 DISCLOSURES UNDER ACCOUNTING STANDARD AS 17

Segment Reporting :

The Company's sole business segment is Plastic Films and all activities are incidental to this sole business segment. Given this fact and that the Company services its domestic and export markets from India only, the financial statements reflect the information required by AS - 17 for the sole business segment of Plastic Films. The whole of the business assets are situated in India.

NOTE NO. 5 IMPAIRMENT OF ASSETS - AS 28

As at March 31, 2015, the Company has reviewed the future earnings of all its cash generating assets in accordance with the Accounting Standard 28 "Impairment of Assets". As the carrying amount of assets does not exceed the future recoverable amount, consequently, no adjustment to carrying amount of assets is considered necessary by the management.

NOTE NO. 6 CONTINGENT LIABILITIES AND COMMITMENTS

31.3.2015 31.3.2014 Rs. Rs.

(I) Contingent Liabilities

In respect of claims against the Company not acknowledged as debts(Net) - 224,273

Customs duty on raw materials imported under advance authorisation, against which - 1,148,834 export obligation is to be fulfilled

(ii) Commitments

The Company has given irrevocable and unconditional Corporate 60,600,000 41,000,000

Guarantee/ Collateral Securities to North Eastern Development

Finance Corporation Ltd. (NEDFi), Assam/ Bank of Baroda - Valsad on behalf of Synergy Films Pvt. Ltd., a Subsidiary company in which the company is holding 100 % of the equity shares as on 31/03/2015 as a collateral security for Working capital Term Loan availed by subsidiary company.

(iii) On account of Capital Commitments (Net of advances) - 6,150,175

(iv) On account of Income Tax and Service Tax demand under contest 904,795 -

The Company has imported Plant and Machineries for production of new Speciality Film under Export Promotion Capital Goods Scheme (EPCG) without payment of Custom Duty. In the event of non-fulfilment of export obligations as specified, Company may be held liable to pay custom duty of Rs. 33.45 lacs (Previous year Rs. 33.45 lacs) in terms of the said Scheme. As on 31st March 2015 Company is not in any default under the Scheme.

NOTE NO. 7

The Company prior to it being listed had issued Bonus shares on 29th June, 1994 for Rs. 10 Million (10,00,000 equity shares of Rs. 10/- each) by capitalising part of its revaluation reserve. Accordingly, the paid up equity share capital of the company stands increased by Rs. 10 Million and the revaluation reserve stands reduced by that amount. The issue of bonus shares as aforesaid is contrary to the circular issued by the Department of Company Affairs issued in September, 1994 and the recommendations of the Institute of Chartered Accountants of India issued in November, 1994. However, the Hon'ble Supreme Court in the recent decision in the case of Bhagwati Developers Vs Peerless General Finance & Investment Co. & others (2005) Comp LJ 377 (SC) has held that there is no specific bar under the Companies Act for issue of Bonus Shares out of Revaluation Reserve and that the Department's Communique was advisory in nature, without any mandatory effect. The Management is therefore of the opinion that both according to the accounting principles and provisions of Company Law, the Company was justified in capitalizing its Revaluation Reserve.


Mar 31, 2014

1. Corporate Information

Ecoplast Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the business of manufacturing, processing and selling of Co-extruded Plastic Film for Packaging, Industrial and Consumer applications. The principal place of business of the company is at Abrama-Valsad. The Company caters to both domestic and international markets. It has various certifications like ISO 9001, ISO 14001 and ISO 22000 registration for products thereby complying with globally accepted quality standards.

NOTE NO. 2 : DISCLOSURE IN ACCOUNTANCE WITH REVISED AS-13 ON "ACCOUNTING FOR INVESTMENTS"

In respect of Investment of Rs.153.72 Lacs ( Previous Year : Rs. 133.25 Lacs) made in Subsidiary Company Synergy Films Pvt. Ltd. the accumulated losses as per audited accounts as at 31st March, 2014 amounts to Rs.326.41 Lacs (Prvious Year : Rs. 329.11 Lacs) representing the erosion of the entire net worth of the Subsidiary company due to operational losses. The company has, at the close of the year, assessed the carrying value of its investments and based on such assessment, the company has made not made any provision during the year (Previous Year Rs. 71.96 Lacs) for permanent diminution in the value of its investments in Synergy Films Pvt. Ltd.

NOTE NO. 3 DISCLOSURES UNDER ACCOUTING STANDARD AS15

Particulars Employee benefit plans

Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 20,50,348 (Year ended 31 March, 2013 Rs. 16,64,745) for Provident Fund contributions and Rs. 15,86,066 (Year ended 31 March, 2013 Rs. 12,15,378) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees :

NOTE NO. 4 DISCLOSURES UNDER ACCOUNTING STANDARD AS 17 Segment Reporting :

The Company''s sole business segment is Plastic Films and all activities are incidental to this sole business segment. Given this fact and that the Company services its domestic and export markets from India only, the financial statements reflect the information required by AS - 17 for the sole business segment of Plastic Films. The whole of the business assets are situated in India.

NOTE NO. 5 DISCLOSURES UNDER ACCOUNTING STANDARD AS 18

Particulars

Related party transactions

Details of related parties :

Description of relationship Names of related parties

Subsidiaries Synergy Films Pvt. Ltd.

Key Management Personnel (KMP) Mr. J. B. Desai

Relatives of KMP -

Company in which KMP / Relatives of KMP can Propack Industries ( Prop. Kunal Plastics Pvt. Ltd.) exercise significant influence

Note: Related parties have been identified by the Management.

NOTE NO. 6 CONTINGENT LIABILITIES AND COMMITMENTS

31.3.2014 31.3.2013 Rs. Rs.

(I) Contingent Liabilities

In respect of claims against the Company not acknowledged as debts(Net) 224,273 224,273

Customs duty on raw materials imported under advance authorisation, 1,148,834 2,528,785 against which export obligation is to be fulfilled

(ii) Commitments

The Company has given irrevocable and unconditional Corporate 41,000,000 41,000,000 Guarantee/ Collateral Securities to North Eastern Development Finance Corporation Ltd. (NEDFC), Assam/ Bank of Baroda - Valsad on behalf of Synergy Films Pvt. Ltd., a Subsidiary company in which the company is holding 100 % of the equity shares as on 31/03/2014 as a collateral security for Working capital Term Loan availed by subsidiary company.

(iii) On account of Capital Commitments ( Net of advances) 6,150,175 -

NOTE NO. 7

The Company has imported Plant and Machineries for production of new Speciality Film under Export Promotion Capital Goods Scheme (EPCG) without payment of Custom Duty. In the event of non-fulfilment of export obligations as specified, Company may be held liable to pay custom duty of Rs.33.45 lacs (Previous year Rs.33.45 lacs) in terms of the said Scheme. As on 31st March 2014 Company is not in any default under the Scheme.

NOTE NO. 8

The Company prior to it being listed had issued Bonus shares on 29th June, 1994 for Rs. 10 Million (10,00,000 equity shares of Rs. 10/- each) by capitalising part of its revaluation reserve. Accordingly, the paid up equity share capital of the company stands increased by Rs. 10 Million and the revaluation reserve stands reduced by that amount. The issue of bonus shares as aforesaid is contrary to the circular issued by the Department of Company Affairs issued in September, 1994 and the recommendations of the Institute of Chartered Accountants of India issued in November, 1994. However, the Hon''ble Supreme Court in the recent decision in the case of Bhagwati Developers Vs Peerless General Finance & Investment Co. & others (2005) Comp LJ 377 (SC) has held that there is no specific bar under the Companies Act for issue of Bonus Shares out of Revaluation Reserve and that the Department''s Communique was advisory in nature, without any mandatory effect. The Management is therefore of the opinion that both according to the accounting principles and provisions of Company Law, the Company was justified in capitalizing its Revaluation Reserve.


Mar 31, 2013

1. Corporate Information

Ecoplast Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the business of manufacturing, processing and marketing of Co-extruded Plastic Film for Packaging, Industrial and Consumer applications. The principal place of business of the company is at Abrama-Valsad. The Company caters to both domestic and international markets. It has various certifications like ISO 9001, ISO 14001 and ISO 22000 registration for products thereby complying with globally accepted quality standards.

NOTE NO. 2 : DISCLOSURE IN ACCOUNTANCE WITH REVISED AS-13 ON "ACCOUNTING FOR INVESTMENTS"

In respect of Investment of Rs.133.25 Lacs ( Previous Y ear : Rs. 133.25 Lacs) made in Subsidiary Company Synergy Films Pvt. Ltd. the accumulated losses as per audited accounts as at 31st March, 2013 amounts to Rs.329.11 Lacs (Previous Year : Rs. 247.47 Lacs) representing the erosion of the entire net worth of the Subsidiary company due to operational losses. The company has, at the close of the year, assessed the carrying value of its investments and based on such assessment, the company has made a provision of Rs. 71.96 Lacs for permanent diminution in the value of its investments in Synergy Films Pvt. Ltd.

NOTE NO. 3 : DISCLOSURES UNDER ACCOUNT STANDARD AS15

Particulars Employee benefit plans

Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 16,64,745 (Year ended 31 March, 2012 Rs. 14,14,054) for Provident Fund contributions and Rs. 12,15,378 (Year ended 31 March, 2012 Rs. 9,92,205) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

NOTE NO. 4 DISCLOSURES UNDER ACCOUNTING STANDARD AS 17

Segment Reporting :

The Company''s sole business segment is Plastic Films and all activities are incidental to this sole business segment. Given this fact and that the Company services its domestic and export markets from India only, the financial statements reflect the information required by AS - 17 for the sole business segment of Plastic Films. The whole of the business assets are situated in India.

NOTE NO. 5 IMPAIRMENT OF ASSETS - AS 28

As at March 31, 2013, the Company has reviewed the future earnings of all its cash generating assets in accordance with the Accounting Standard 28 “Impairment of Assets”. On reviewing it was found that one of the Company''s Plant L2K1 has out lived its economic life requiring a provision for impairment loss of Rs. 1,436,267 based on valuation report obtained from an independent Valuer. Accordingly impairment loss has been recognised in the Statement of Profit & Loss for the year.

31.3.2013 31.3.2012 NOTE NO. 6 CONTINGENT LIABILITIES Rs. Rs.

(i) Contingent Liabilities

In respect of claims against the Company not acknowledged 224,273 224,273 as debts (Net)

Customs duty on raw materials imported under advance authorisation, 2,528,785 2,000,164 against which export obligation is to be fulfilled

(ii) Commitments

The Company has given irrevocable and unconditional Corporate 41,000,000 40,000,000

Guarantee/ Collateral Securities to North Eastern Development Finance Corporation Ltd.(NEDFC), Assam/ Bank of Baroda - Valsad on behalf of Synergy Films Pvt. Ltd., a Subsidiary company in which the company is holding 75 % of the equity shares as a collateral security for Term Loan availed by subsidiary company.

NOTE NO. 7

The Company has imported Plant and Machineries for production of new Speciality Film under Export Promotion Capital Goods Scheme (EPCG) without payment of Custom Duty. In the event of non-fulfilment of export obligations as specified, Company may be held liable to pay custom duty of Rs.33.45 lacs (Previous year Rs.33.45 lacs) in terms of the said Scheme. As on 31st March 2012 Company is not in any default under the Scheme.

NOTE NO. 8

The Company prior to it being listed had issued Bonus shares on 29th June, 1994 for Rs. 10 Million (10,00,000 equity shares of Rs. 10/- each) by capitalising part of its revaluation reserve. Accordingly, the paid up equity share capital of the company stands increased by Rs. 10 Million and the revaluation reserve stands reduced by that amount. The issue of bonus shares as aforesaid is contrary to the circular issued by the Department of Company Affairs issued in September, 1994 and the recommendations of the Institute of Chartered Accountants of India issued in November, 1994. However, the Hon''ble Supreme Court in the recent decision in the case of Bhagwati Developers Vs Peerless General Finance & Investment Co. & others (2005) Comp LJ 377 (SC) has held that there is no specific bar under the Companies Act for issue of Bonus Shares out of Revaluation Reserve and that the Department''s Communique was advisory in nature, without any mandatory effect. The Management is therefore of the opinion that both according to the accounting principles and provisions of Company Law, the Company was justified in capitalizing its Revaluation Reserve.


Mar 31, 2012

1 Corporate Information

Ecoplast Limited is Public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange in India. The Company is engaged in the business of manufacturing, processing and marketing of Co-extruded Plastic Film for Packaging, Industrial and Consumer applications. The Company caters to both domestic and international markets. It has various certifications like ISO 9001, ISO 14001 and ISO 22000 registration for products thereby complying with globally accepted quality standards

NOTE NO. 2 DISCLOSURE IN ACCOUNTANCE WITH REVISED AS-13 ON "ACCOUNTING FOR INVESTMENTS"

In respect of Investment of Rs.133.25 Lacs made in Subsidiary Company Synergy Films Pvt. Ltd. the accumulated losses as per audited accounts as at 31st March, 2012 amounts to Rs.247.47 Lacs representing the erosion of the entire net worth of the Subsidiary company. However having regard to the continued long term strategic involvement, management is of the view that no provision is necessary for any diminution in the value of Investments.

Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised ' 14,14,054 (Year ended 31 March, 2011 ' 12,43,262) for Provident Fund contributions and ' 9,92,205 (Year ended 31 March, 2011 ' 8,87,328) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

NOTE NO. 3 DISCLOSURES UNDER ACCOUNTING STANDARD AS 17 Segment Reporting :

The Company's sole business segment is Plastic Films and all activities are incidental to this sole business segment. Given this fact and that the Company services its domestic and export markets from India only, the financial statements reflect the information required by AS - 17 for the sole business segment of Plastic Films. The whole of the business assets are situated in India.

NOTE NO. 4 IMPAIRMENT OF ASSETS - AS 28

As at March 31, 2012, the Company has reviewed the future earnings of all its cash generating assets in accordance with the Accounting Standard 28 "Impairment of Assets". As the carrying amount of assets does not exceed the future recoverable amount, consequently, no adjustment to carrying amount of assets is considered necessary by the management.

31.3.2012 31.3.2011

NOTE NO. 5 CONTINGENT LIABILITIES Rs. Rs.

On account of capital commitments (net of advances) - 5,594,500

Customs duty on raw materials imported under advance 2,000,164 904,978 licensing, against which export obligation is to be fulfilled

The Company has given irrevocable and unconditional 40,000,000 40,000,000

Corporate Guarantee to North Eastern Development Finance Corporation Ltd. (NEDFC), Assam on behalf of Synergy Films Pvt. Ltd., a Subsidiary company in which the company is holding 75 % of the equity shares as a collateral security for Term Loan availed by subsidiary company.

In respect of claims against the Company not acknowledged 224,273 224,273 as debts(Net)

NOTE NO. 6

The Company has imported Plant and Machineries for production of new Speciality Film under Export Promotion Capital Goods Scheme (EPCG) without payment of Custom Duty. In the event of non-fulfilment of export obligations as specified, Company may be held liable to pay custom duty of Rs.33.45 lacs (Previous year Rs.33.45 lacs) in terms of the said Scheme. As on 31st March 2012 Company is not in any default under the Scheme.

NOTE NO. 7

The Company prior to it being listed had issued Bonus shares on 29th June, 1994 for Rs. 10 Million (10,00,000 equity shares of Rs. 10/- each) by capitalising part of its revaluation reserve. Accordingly, the paid up equity share capital of the company stands increased by Rs. 10 Million and the revaluation reserve stands reduced by that amount. The issue of bonus shares as aforesaid is contrary to the circular issued by the Department of Company Affairs issued in September, 1994 and the recommendations of the Institute of Chartered Accountants of India issued in November, 1994. However, the Hon'ble Supreme Court in the recent decision in the case of Bhagwati Developers Vs Peerless General Finance & Investment Co. & others (2005) Comp LJ 377 (SC) has held that there is no specific bar under the Companies Act for issue of Bonus Shares out of Revaluation Reserve and that the Department's Communique was advisory in nature, without any mandatory effect. The Management is therefore of the opinion that both according to the accounting principles and provisions of Company Law, the Company was justified in capitalizing its Revaluation Reserve.

NOTE NO. 8

The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act,1956. Consequent to the notification under the Companies Act,1956, the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.


Mar 31, 2011

31.3.2011 31.3.2010 Rs. Rs.

1 Contingent Liabilities

a. On account of capital commitments (net of advances) 5,594,500 14,630,000

b. Customs duty on raw materials imported under advance licensing, against 904,978 697,074 which export obligation is to be fulfilled

c. The Company has given irrevocable and unconditional Corporate Guarantee 40,000,000 40,000,000 to North Eastern Development Finance Corporation Ltd. (NEDFC). Assam on behalf of Synergy Films Pvt. Ltd., a joint venture company in which the company is holding 25% of the equity shares as a collateral security for Term Loan and Working Capital Term Loan availed by joint venture Company.

d. In respect of claims against the Company not acknowledged as debts. (Net) 224,273 224,273

2 a) Dues to Small Scale Industrial Undertakings for more than 30 days include amounts payable to - (as identified by Management)

NIL

3 Disclosures In Accordance with Revised AS-13 On "Accounting for Investments"

In respect of Investment of Rs. 35.75 lacs made in Joint Venture Company (JVC) Synergy Films Pvt. Ltd the accumulated losses as per provisional accounts as at 31st March, 2011 amounts to Rs. 158.63 lacs representing the erosion of the entire net worth of the JVC. However having regard to the continued long term strategic involvement, management is of the view that no provision is necessary for any diminution in the value of investments

4 Disclosures In Accordance with Revised AS-15 On " Employees Benefits"

a) The Accounting Standard -15 (Revised 2005) on Employees Benefits issued by the Institute of Chartered Accountants of India has been adopted by the Company effective from April 1, 2007

c) Defined Benefit Plans :

vi) The overall expected rate of return on assets is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

ix) The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors. The above information is extracted from the report obtained from the independent actuary and Auditors have placed reliance on underlying assumptions.

x) Para 132 of AS 15 (revised 2005) does not require any specific disclosures except where expense resulting from compensated absence is of such size, nature of incidence that its disclosure is relevant under Accounting Standard 5 or Accounting Standard 18. In the opinion of the Management the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005)

5 Segment Reporting:

The companys sole business segment is Plastic Films and all activities are incidental to this sole business segment. Given this fact and that the company services its domestic and export markets from India only, the financial statements reflect the information required by AS -17 for the sole business segment of Plastic Films. The whole of the business assets are situated in India.

6 Related Party Transaction :

(1) Relationships:

(a) Where control exists :

Synergy Films Pvt. Ltd.

(b) Key Management Personnel :

Mr. P. P. Kharas (Chairman)

Mr. J. B. Desai (Managing Director)

(c) Relatives of key management personnel and their enterprises, where transactions have taken place.

Mrs. Naheed R. Divecha

(d) Other Related Parties :

Propack Industries (Prop. Kunal Plastics Pvt. Ltd.)

Note : Related party relationship on the basis of the requirements of Accounting Standard 18 (AS-18) as in 1 (a) to (d) above is identified and certified by the Management and relied upon by the Auditors.

7 Disclosure as required by Accounting Standard 19 (AS-19) "Leases" issued by the Institute of Chartered Accountants of India is as given below. The Company has taken residential and godown premises under leave and license arrangements on a short term basis, renewable on terms to be mutually agreed.

8 Deferred Tax :

Deferred Tax has been provided in accordance with Accounting Standard 22 (AS-22) - Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India.

9 As per the requirements of Accounting Standard (AS-27) "Financial Reporting of Interest in Joint Ventures", the Companys interest in the Joint Venture Companies is as follows :

Name of Company: Synergy Films Pvt. Ltd.

Nature: Jointly Controlled Entity

Country of Incorporation: India

(%) of Holding as on March 31, 2011: 25

10 As at March 31, 2011, the Company has reviewed the future earnings of all its cash generating units in accordance with the Accounting Standard 28 "Impairment of Assets". As the carrying amount of assets does not exceed the future recoverable amount, consequently, no adjustment to carrying amount of assets is considered necessary by the management.

11 The Company has imported Plant and Machineries for production of new Speciality Film under Export Promotion Capital Goods Scheme (EPCG) without payment of Custom Duty. In event of non-fulfilment of export obligations as specified. Company may be held liable to pay custom duty of Rs. 33.45 lacs (Previous year Rs. 33.45 lacs) in terms of the said Scheme. As on 31st March 2011 Company is not in any default under the Scheme.

12 The Company prior to it being listed had issued Bonus shares on 29th June, 1994 for Rs. 10 Million (10,00,000 equity shares of Rs. 10/- each) by capitalising part of its revaluation reserve. Accordingly, the paid up equity share capital of the company stands increased by Rs. 10 Million and the revaluation reserve stands reduced by that amount. The issue of bonus shares as aforesaid is contrary to the circular issued by the Department of Company Affairs issued in September, 1994 and the recommendations of the Institiute of Chartered Accountants of India issued in November, 1994. However, the Honble Supreme Court in the recent decision in the case of Bhagwati Developers Vs Peerless General Finance & Investment Co, & others (2005) Comp LJ 377 (SC) has held that there is no specific bar under the Companies Act for issue of Bonus Shares out of Revaluation Reserve and that the Departments Communique was advisory in nature, without any mandatory effect. The Management is therefore of the opinion that both according to the acccounting principles and provisions of Company Law, the Company was justitied in capitalizing its Revaluation Reserve.

13 Previous years figures have been regrouped wherever necessary to conform with to years classification.

14 Additional information pursuant to the provisions of paragraph (3) and (4) of Part II of Schedule VI of the Companies Act, 1956.

15 Cash Flow Statement for the year ended 31st March, 2011 is disclosed in the statement annexed to these Accounts as Annexure I.


Mar 31, 2010

1 Contingent Liabilities 31.3.2010 31.3.2009

a. On account of capital commitments (net of advances) 14,630,000 -

b. Customs duty on raw materials imported under advance 697,074 1,281,579 licensing, against which export obligation is to be fulfilled

c. The Company has given irrevocable and unconditional Corporate Guarantee 40,000,000 40,000,000 to North Eastern Development Finance Corporation Ltd. (NEDFC). Assam on behalf of Synergy Films Pvt. Ltd., a joint venture company in which the company is holding 25% of the equity shares as a collateral security for Term Loan and Working Capital Terms Loan availed by joint venture company.

d. In respect of claims against the Company not acknowledged as debts. (Net) 224,273 224,273

2 Segment Reporting:

The companys sole business segment is Plastic Films and all activities are incidental to this sole business segment. Given this fact and that the company services its domestic and export markets from India only, the financial statements reflect the information required by AS - 17 for the sole business segment of Plastic Films. The whole of the business assets are situated in India.

3 Related Party Transaction :

(1) Relationships

(a) Where control exists

Synergy Films Pvt. Ltd.



(b) Key Management Personnel

Mr. P. P. Kharas (Chairman)

Mr. J. B. Desai (Managing Director)



(c) Relatives of key management personnel and their enterprises, where transactions have taken place. Mrs. Naheed R. Divecha

(d) Other Related Parties :

Propack Industries (Prop. Kunal Plastics Pvt. Ltd.)

4 As per the requirements of Accounting Standard (AS-27) "Financial Reporting of Interest in Joint Ventures". the Companys interest in the Joint Venture Companies is as follows :

Name of Company : Synergy Films Pvt. Ltd.

Nature : Jointly Controlled Entity

Country of Incorporation : India

(%) of Holding as on March 31, 2010: 25

5 As at March 31, 2010, the Company has reviewed the future earnings of all its cash generating units in accordance with the Accounting Standard 28 "Impairment of Assets". On reviewing it was found that one of the Companys Plant "Line-87" has out lived its economic life requiring a provision for impairment loss of Rs. 13,56,076/- based on valuation report obtained from an independent Valuer. Accordingly impairment loss has been recognised in the Profit & Loss Account for the year

6 The Company has imported Plant and Machineries for production of new Speciality Film under Export Promotion Capital Goods Scheme (EPCG) without payment of Custom Duty. In event of non-fulfilment of export obligations as specified. Company may be held liable to pay custom duty of Rs. 33.45 lacs (Previous year Rs. 33.45 lacs) in terms of the said Scheme. As on 31st March 2010 Company is not in any default under the Scheme.

7 The Company prior to it being listed had issued Bonus shares on 29th June, 1994 for Rs. 10 Million (10,00,000 . equity shares of Rs. 10/- each) by capitalising part of its revaluation reserve. Accordingly, (he paid up equity share capital of the company stands increased by Rs. 10 Million and the revaluation reserve stands reduced by that amount. The issue of bonus shares as aforesaid is contrary to the circular issued by the Department of Company Affairs issued in September, 1994 and the recommendations of the Institiute of Chartered Accountants of India issued in November, 1994. However, the Honble Supreme Court in the recent decision in the case of Bhagwati Developers Vs Peerless General Finance & Investment Co, & others (2005) Comp LJ 377 (SC) has held that there is no specific bar under the Companies Act for issue of Bonus Shares out of Revaluation Reserve and that the Departments Communique was advisory in nature, without any mandatory effect. The Management is therefore of the opinion that both according to the acccounting principles and provisions of Company Law,the Company was justified in capitalizing its Revaluation Reserve.

8 Previous years figures have been regrouped wherever necessary to conform with this years classification.

9 Additional information pursuant to the provisions of paragraph (3) and (4) of Part II of Schedule VI of the Companies Act, 1956.

10 Cash Flow Statement for the year ended 31st March, 2010 is disclosed in the statement annexed to these Accounts as Annexure I.

 
Subscribe now to get personal finance updates in your inbox!