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Notes to Accounts of Jindal Poly Films Ltd.

Mar 31, 2014

1 DISCLOSURE UNDER CLAUSE 32

Loans & advances outstanding at the year end and maximum amount outstanding during the year, which are required to be disclosed Under clause 32 of the listing agreement are as under:-

2 SEGMENT REPORTING AS PER AS-17

i) Primary Segment

The Company''s business activity falls within a single primary business segment of Flexible Packaging.

The company has common fixed assets for producing goods for domestic and overseas markets. Hence, separate figures for capital employed can not be furnished.

3 A) As required by Accounting Standard-18 "Related party disclosures" are as follows.

List of Related parties

a. Subsidiary Companies

1 Jindal Films India Ltd (Previously Known as Jindal Metal & Mining Limited )

2 Jindal Metal & Mining International Limited

3 Global Nonwovens Limited (w.e.f. 14.02.2014)

4 JPF Netherland B.V. (w.e.f. 18.01.2013)

5 JPF Dutch B.V. (w.e.f. 21.01.2013)

6 JPF Netherland Holding B.V. (w.e.f. 28.01.2013)

7 JPF USA Holding LLC (w.e.f. 23.01.2013)

8 JPF USA LLC (w.e.f. 24.01.2013)

9 JPF ITALY Holding SA (w.e.f. 14.05.2013)

10 JPF Luxembourg Holding S.a.r.l (Ltd. Liab. Co.) (w.e.f.14.05.2013)

11 Jindal Films America LLC (w.e.f. 01.10.2013)

12 Films Shawnee LLC (w.e.f. 01.10.2013)

13 Films LaGrange LLC (w.e.f. 01.10.2013)

14 Films Macedon LLC (w.e.f. 01.10.2013)

15 Jindal Films Europe Virton LLC (w.e.f. 01.10.2013)

16 Jindal Films Europe Brindsi Srl (w.e.f. 01.10.2013)

17 Jindal Films Europe Kerkrade B.V (w.e.f. 01.10.2013)

18 Jindal Films Europe S.a.r.l (w.e.f. 01.10.2013)

19 Jindal Films Singapore Pte.Ltd (w.e.f. 01.10.2013)

20 Jindal Films (Shanghai) Co. Ltd. (w.e.f. 10.09.2013)

21 Jindal Films Capital LLC (w.e.f. 01.10.2013)

22 Films International LLC (w.e.f. 03.12.2013)

b. Associates

1 Rexor Holding SAS

(Formerly Known as Jindal France SAS)

2 Hindustan Powergen Limited

NOTES

c. Key Management Personnels

1 Sh. Hemant Sharma (Upto 28.02.14)

2 Sh. R.B. Pal

3 Sh. Sameer Banerjee (Upto 25.09.13)

4 Sh. Inna Chandrakantha Rao (w.e.f. 01.03.14)

5 Sh. Sanjay Mittal (w.e.f. 25.09.13)

d. Enterprise owned by Major Shareholders of reporting Enterprise

1 Jindal Photo Investment Limited

2 Soyuz Trading Company Limited

3 Rishi Trading Company Limited

4 Consolidated Finvest & Holdings Ltd.

5 Jindal Poly Investment & Finance Company Limited

6 Jindal India Limited

7 Anchor Image and Films Private Limited

8 Anchor Image and Films Pte. Limited Signapore

e. Other Enterprises

1. Jindal India Powertech Limited

2. Jindal India Thermal Power Limited

3.2 Contingent Liabilities:

a.Bank Guarantees 16,94,89,982 18,50,76,397

b.Corporate Guarantees in favour of overseas lender of Subsidiaries 9,14,36,14,000

c. Outstanding Letters of Credit (Including Capital Goods) 89,31,49,730 72,66,17,154

d. Claims against Company, not acknowledged as debts 6,26,28,134 1,07,68,060

e.Demands raised by authorities against which, Company has filed appeals: -

i) Income Tax 13,41,84,802 5,11,44,555

ii) Excise Duties/Custom/Service Tax 8,13,13,695 7,95,76,725

iii) Sales Tax 19,29,34,553 19,21,49,092

3.3 Pursuant to the adoption of Accounting Standards as prescribed by Companies (Accounting Standards) Rules,2006 issued by Ministry of Corporate Affairs vide notification no.G.S.R.914 (E) dated 29th December, 2011 and as required by Accounting Standard 11, Loss of Rs 26,76,48,936 (previous year loss of Rs 21,59,98,217) on translation/settlement of foreign currency monetary items including borrowings have been shown as exceptional items in the profit and loss account.

3.4 A sum of Rs.45,676,415 (previous year Rs.11,322,004) being the difference between domestic vs. imported raw mate- rial prices prevailing at the year ended on 31st March 2014 on account of advance licences excess utilized for which exports are yet to be made, has been adjusted in the cost of raw material.

Export Incentive under Focus Market Scheme (FMS) amount to Rs 40,999,382. (Previous year Rs. Nil) has been credited in the account of raw material.

3.5 Advance receivable in cash or in kind includes Rs. 28,254,171 (Previous Year Rs. 28,254,171 ) being the amount of custom duty deposited against import of capital goods assessed under provisional assessments in earlier year.

3.6 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.

3.7 Certain old balances of sundry debtors and sundry creditors are subject to reconciliation and confirmation.

3.8 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 512,030,553(previous Year Rs. 397,601,338) has been added to Capital Reserve.

3.9 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.

3.10 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.

3.11 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.

3.12 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.

3.13 a) Discontinued Operation

Company has discontinued the operation of Partially Oriented Yarn (POY) facility at Gulaothi, Uttar Pradesh and Pet film facility at Khanvel unit as it has been terminated through abandonment in earlier years as per Accounting Standard -24 issued by ICAI.Following is selected financial information included in loss from discontinued opera- tions for the Gulaothi and Khanvel unit:-

b) As per Accounting standard -28 " Impairment of Assets" issued by ICAI ,no further impairment loss has been considered by the management in assets of Gulaothi & Khanvel unit.

3.14 During the financial year, the Company has demerged its investment division with Jindal Poly Investment and Finance Company Limited (JPIFCL) as per Section 391 to 394 of the Companies Act, 1956. The Hon''ble High Court of Judicature at Allahabad has approved the scheme and passed order on 16th May, 2013 to demerge the Company and the appointed date was 1st April, 2012. Consequently for the year ended 31st March 2014 the demerger has been effected in the books of accounts and accordingly the figure of previous year are re casted. Pursuant to the order of Hon''ble High Court, JPIFCL has issued and allotted equity shares in the ratio of 1 (one) equity share of face value of Rs 10/- each, fully paid-up, to each shareholder of the Company for every 4 (four) equity shares of face value of Rs.10/- each held by such shareholder in the Company on the record date i.e. 18th July, 2013. Accordingly, JPIFCL has issued and allotted to the shareholders of the Company a total of 1,05,11,929 fully paid up equity shares of Rs.10/- each. The equity shares of JPIFCL are listed on the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE).

3.15 During the quarter company acquire 4,28,00,000 equity shares of Global Non woovens Limited (GNL) with an investment of Rs.42.80 crore, after acquisition GNL become subsidiary of the Company during the year.

The Company has pledged 3,61,08,000 equity shares 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.

3.16 During the year the Company had invested INR 167 Crores in the Zero Percent Redeemable Preference Share Capital (Redeemable at a premium of 10% within 15 year from the date of allotment) of Jindal India Powertech Limited (JIPL), a group-SPV company. JIPL is the holding Company of Jindal India Thermal Power Limited, which is setting up Power Plant (600MW x 2) at village Derang, District Angul, Odisha. Further, pursuant to the resolutions passed by the Board of Directors of the the Company from time to time and the last one dated 20th July 2013, the Company, JIPL and Jindal Photo Limited have jointly and severally undertaken to the lenders of JITPL to meet any requirement towards shortfall in equity and other project costs overrun in JITPL, in the manner and form satisfactory to JITPL lenders.

3.17 The Company has completed the ongoing overseas acquisition of BOPP Films business (comprising of five manufacturing units) of ExxonMobil USA through its overseas subsidiary namely JPF Netherlands BV(51 % holding by the company and balance 49 % holding hold by Anchor Image & Films Pte Ltd, Singapore) and its steps down subsidiaries by way of investment in equity capital, unsecured loan and Corporate guarantees to the extent of USD 160 million in favour of lenders of overseas entities for the purpose. The interests in the overseas acquisition are reflected in consolidated financial statements of the Company as required by Indian Accounting Standard.

3.18 The Income Tax Department had conducted search and seizure u/s 132 and survey u/s 133A of the Income Tax Act, 1961 during the financial year 2011-12 on various premises of the company. The department had issued notice u/s 153 A for reassessment for the assessment years 2006-07 to 2011-12 . Assessment for AY 2010-11 & 2011-12 has been completed and are contested before CIT(A). Assessment for remaining years are in progress.

3.19 Previous year''s figures have been regrouped and/or rearranged wherever required.


Mar 31, 2013

1 SEGMENT REPORTING AS PER AS-17

i) Primary Segment

Business Segment : The Company''s operating business are organised and managed separately according to the nature of products.

ii) Secondary Segment

Geographical Segment : The analysis of geographical segment is based on the geographical location of the customers.

iii) Corporate income and expenses are considered as part of unallocable income and expense'' which are not identifiable to any business segment.

2 A) As required by Accounting Standard-18 "Related party disclosure" issued by the Institute of Chartered Accountants of India are as follows:-

List of Related parties

a. Subsidiary Companies

1 Jindal Poly Films Investment Limited

2 Jindal Metal & Mining Limited

3 Jindal Metal & Mining International Limited

4 Jindal Poly Investment & Finance Company Limited (w.e.f.11.07.2012)

5 Jindal Resources (Muzambique) Lda (upto 10.09.2012)

6 Haldia Synthetic Rubber Ltd (upto 31.08.2012)

7 Trans India Mining Lda (upto 05.11.2012)

8 JPF Netherland B.V (w.e.f.18.01.2013)

9 JPF Dutch B.V (w.e.f. 21.01.2013)

10 JPF Netherland Holding B.V (w.e.f. 28.01.2013)

11 JPF USA Holding LLC (w.e.f. 23.01.2013)

12 JPF USA LLC (w.e.f. 24.01.2013)

b. Associates

1 Jindal India Powertech Limited

2 Rexor Holding SAS

(Formerly Known as Jindal France SAS)

3 Hindustan Powergen Limited

4 Consolidated Green Finvest Ltd.

c. Key Management personnels

1 Sh. Hemant Sharma

2 Sh. R.B. Pal

3 Sh. Sameer Banerjee

d. Controlling Enterprises/Major Shareholders of reporting Enterprise

1 Jindal Photo Investment Limited

2 Soyuz Trading Company Limited

3 Rishi Trading Company Limited

3.1 Pursuant to the adoption of Accounting Standards as prescribed by Companies (Accounting Standards) Rules''2006 issued by Ministry of Corporate Affairs vide notification no.G.S.R.914 (E) dated 29th December'' 2011 and as required by Accounting Standard 11'' Loss of Rs 2159.98 lacs (previous year loss of Rs 4763.93 lacs) on translation/settlement of foreign currency monetary items including borrowings have been shown as exceptional items in the profit and loss account.

a) During the previous year the company has made a provision of Rs 102.24 Lacs for permanent diminiution of its investment in Jindal Resources Muzambique Lda ''(a subsidiary Company) which has been shown as exceptional item.

b) During the Previous year the company has made a provision of Rs 5.00 Lacs for the diminution of its investment in Haldia Sythetic Rubber Ltd (a Subsidiary Company)due to the company has not been able to start its business '' which has been shown as exceptional item.

c) During the Previous year'' the Company has reversed Rs.560.00 Lacs/-'' which was charged to profit and loss account in the previous year on account of advance paid to vendor.d) During the Previous year'' the Company has disinvested 60% of its total shareholding in Jindal France SAS (wholly owned subsidiary)'' on which there is a loss of Rs. 1876.50 lacs. The balance 40% of the holding require a provision of Rs.1245.02 lacs on account of diminution in value of investment'' thus total amount of loss for Rs.3121.52 lacs has been shown as exceptional item.

3.2 A sum of Rs.11''322''004 (previous year Rs.12''469''349) being the difference between domestic vs. imported raw material prices prevailing at the year ended on 31st March 2013 on account of advance licences excess utilized for which exports are yet to be made'' has been adjusted in the cost of raw material.

3.3 Export Incentive under Duty Entitlement Pass Book Scheme (DEPB) amount to Rs. Nil (Previous year Rs. 114''565''148) has been credited in the account of raw material.

3.4 Advance receivable in cash or in kind includes Rs. 28''254''171 (Previous Year Rs. 28''254''171 ) being the amount of custom duty deposited against import of capital goods assessed under provisional assessments in earlier year.

3.5 Non – Current Investment includes the following:- (a) 6 shares of Jindal Metal & Mining Ltd. of which the Company is beneficial owner are held by certain individuals in fiduciary capacity.

(b) 6 shares of Jindal Poly films Investments Ltd. of which the Company is beneficial owner are held by certain individuals in fiduciary capacity.

(c) 6 shares of Jindal Poly Investment & Finance Co. Ltd of which the Company is beneficial owner are held by certain individuals in fiduciary capacity.

3.6 Certain old balances of sundry debtors and sundry creditors are subject to reconciliation and confirmation.

3.7 a) 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.b) Till 31.03.12'' as per accounting policy followed by the company ''the amount of such subsidy receivable was shown under the head "Revenue from Opeartions"/"Other Income". During the year'' in view of legal opinion received from experts'' these subsidy should be governed by AS-12. Based on AS-12 dealing with accounting treatment of Government grant'' such incentives of Industrial promotion subsidy received are in nature of Capital receipt and should be credited to Capital reserve instead of "Revenue from Operations/Other Income".

Accordingly'' during the year amount of subsidy receivable under the above said scheme amounting to Rs 39''76''01''338 has been added to Capital Reserve . Consequently the profit for the current year is decreased by Rs 39''76''01''338 due to the change of above accounting policy (as required by AS-5) ''and not comparable with previous year figure to that extent. Further the impact of Rs.126''90''09''595 relating to the amount of Subsidy received/receivable in preceding financial years up to 31st March'' 2012 which are reflected in "Revenue from opeartions/other income" in that financial year are not transferred to capital reserve.

3.8 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.

3.9 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.

3.10 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.

3.11 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.

3.12 a) Discontinued Operation

Company has discontinued the operation of Partially Oriented Yarn (POY) facility at Gulaothi'' Uttar Pradesh and Pet film facility at Khanvel unit as it has been terminated through abandonment in earlier years as per Accounting Standard -24 issued by ICAI.Following is selected financial information included in loss from discontinued operations for the Gulaothi and Khanvel unit:-

b) As per Accounting standard -28 " Impairment of Assets" issued by ICAI ''no further impairment loss has been considered by the management in assets of Gulaothi & Khanvel unit.

3.13 The Board of Directors of the company at its meeting held on 26th November'' 2012 passed a resolution for demerger of its investment division with Jindal Poly Investment and Finance Company Limited. (a wholly owned subsidiary). The same has been sanctioned on dated 16th May 2013 by Honb''le High Court of Allahabad .The Company is in the course of receiving the formal order and filing the same with ROC and effect will be given in due course.

3.14 The company has pledged 428''571''429 equity shares of Rs. 10 each (Rs. 7 called and paid up) of Jindal India Powertech Limited "JIPL"'' an associate Company to IFCI Ltd as security for 14 % OCD issued by JIPL and subscribed by IFCI Ltd in terms of the Debenture subscription agreement between JIPL and IFCI Ltd for a sum of Rs 300 Crore.

3.15 Search & Seizure:

The Income Tax Department had conducted search and seizure u/s 132 and survey u/s 133A of the Income Tax Act''1961 during the financial year 2011-12 on various premises of the company and its directors/promoters and had seized various records of the company. Demand if any arises on this account will be provided as and when the case is finalized.

3.16 During the year one subsidiary company namely JPF Netherland B.V was incorporated and four step down subsidiaries namely (i) JPF Dutch B.V. (ii) JPF Netherland Holding B.V. (iii) JPF USA Holding LLC and (iv) JPF USA LLC were incorporated'' but no investment business activity have carried out till 31.03.2013

3.17 Previous year''s figures have been regrouped and/or rearranged wherever required.

 
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