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Notes to Accounts of Polyplex Corporation Ltd.

Mar 31, 2018

Note: 1: Corporate information

Polyplex Corporation Limited (“PCL”) is a public limited company incorporated and domiciled in India and its shares are publicly traded on the National Stock Exchange (‘NSE’) and the Bombay Stock Exchange (‘BSE’), in India. The registered office of the company is situated at Lohia Head Road, Khatima-262308 Distt. Udham Singh Nagar, Uttarakhand.

The Company is principally engaged in the manufacturing of plastic films. The company has two manufacturing plants located in India at Khatima and Bazpur both in state of Uttarakhand.

These standalone financial statements were approved and adopted by board of directors of the Company in their meeting held on 30th May, 2018.

Note 2: Critical accounting judgements and key sources of estimation uncertainty

The preparation of standalone financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

(a) Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(i) Fair value measurements and valuation processes

Some of the Company’s assets and liabilities are measured at fair value for financial reporting purposes. When the fair values of these assets and liabilities cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques by engaging third party qualified external valuers or internal valuation team to perform the valuation. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(ii) Employee benefit plans

The cost of the defined benefit plans and other long term employee benefits and the present value of the obligation thereon are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans, the management considers the interest rates of government bonds. Future salary increases are based on expected future inflation rates and expected salary trends in the industry. Attrition rates are considered based on past observable data on employees leaving the services of the Company. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes.

(iii) Provision for litigations and contingencies

The provision for litigations and contingencies are determined based on evaluation made by the management of the present obligation arising from past events the settlement of which is expected to result in outflow of resources embodying economic benefits, which involves judgements around estimating the ultimate outcome of such past events and measurement of the obligation amount.

(iv) Useful life and residual value of plant, property equipment, intangible assets & Investment Property

The useful life and residual value of plant, property equipment Investment Property and intangible assets are determined based on technical evaluation made by the management of the expected usage of the asset, the physical wear and tear and technical or commercial obsolescence of the asset.

(v) Income Taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the financial statements

(vi) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making assumption and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward estimate at the end of each reporting period.

(vii) Impairment of non-financial assets

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

Notes

(i) The cost of inventories recognised as an expense during the year amounts to RS.92,893.34 Lacs (FY - 2016-17: RS.81,137.12 Lacs)

(ii) The cost of inventories recognised as an expense includes RS.80.00 Lacs, FY - 2016-17: RS.79.00 Lacs, FY - 2015-16: RS.241 Lacs in respect of written downs of inventory to net realizable value. Previous write-downs have been reversed as a result of increased sales prices.

(iii) The method of valuation of inventories has been stated in Note 2 (m)

(iv) For Security Clause, refer Note No. 21 and 24

Note:

(i) The above receivables include, receivables from Related Parties: RS.1,026.67 Lacs, FY - 2016-17: RS.1,719.43 Lacs, FY - 2015-16: Rs.1,568.64 Lacs

(ii) For Security Clause, refer Note No. 21 and 24

(iii) Refer Note No. 38

RIGHTS ATTACHED TO THE SHARES

The Company has only one class of Equity Shares of par value of RS.10/- per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount and the remaining balance is distributed in proportion to the number of equity shares held by the Equity Shareholders

In last five years there was no Bonus issue, buyback and / or issue of shares other than for cash considerations.

Securities Premium Reserve is credited when shares are issued at premium. It is utilized in accordance with the provisions of Act, to issue bonus shares, to provide for premium on redemption of shares, write-off equity related expenses like underwriting cost etc

General Reserve is created out of the profits earned by the Company by way of transfer from surplus in the statement of profit and loss. The Company can use this reserve for payment of dividend, issue of bonus shares and fully / partly paid-up equity shares

Note:

The amount that can be distributed as dividend by the company to its equity shareholders is determined based on financial statement of the Company and also considering requirements of the Companies Act, 2013.

Loans are secured as under:

Term Loans of RS.8,495.10 Lacs (FY 2016-17: RS.8,886.89 Lacs and FY 2015-16: RS.14,566.44 Lacs) are secured on a pari passu basis by hypothecation / equitable mortgage in respect of Company’s movable / immovable Fixed Assets at Khatima and Bazpur, both present and future.

Includes Prepaid Processig Fees of RS.73.28 Lacs, (FY 2016-17: RS.192.17 Lacs and FY 2015-16: RS.315.57 Lacs)

Refer Note No. 38

@ In FY 2018-19: RS.500.00 Lacs for first two quarter & Balance RS.765.45 Lacs in 3rd quarter.

Long term borrowings in foreign currency, interest rates range from Euribor / Libor spread of 100 - 300 bps. For rupee denominated long term loans taken during the year interest rate is at 7.50% to 8.50%

Default in repayment of Principal and Interest: Rs. Nil.

Note:

The Company has recognized grant in respect of duty paid on procurement of capital goods under EPCG scheme of Central Government which allows refund in the form of freely transferable duty credit scrips of the duty paid upon meeting of specific export obligations. The Company expects to meet its export obligations in future years. During the year, an amount of RS.97.39 Lacs (FY 2016-17: RS.160.45 Lacs) was released from deferred income to the statement of profit and loss on fulfillment of export obligations.

Capital and State Investment Subsidy Grants relating to property, plant and equipment relates to cash incentive received from Government for setting up industies in specified area. During the year, an amount of RS.6.67 Lacs (FY 2016-17: RS.6.67 Lacs) was released from deferred income to the statement of profit and loss

* Short Term Borrowing in the form of Working Capital Loans & Buyer’s Credit from Banks aggregating to RS.6,781.08 Lacs (FY 2016-17: RS.10,797.34 and FY 2015-16: RS.3,366.98 Lacs) are secured / to be secured by way of hypothecation of inventories, book debts and other current assets both present and future, and second charge on company’s movable & immovable Fixed Assets both present and future at Khatima and Bazpur

Short term borrowings in foreign currency, interest rates range from Euribor / Libor spread of 40 - 300 bps. For rupee denominated short term loans taken during the year interest rate is at 8.00% to 11.00% Refer Note No. 38

Goods and Service Tax (GST) has been effective from July 01, 2017. Consequently, excise duty, value added tax (VAT), Service tax etc. have been replaced with GST. Until June 30, 2017, ‘Sale of products’ included the amount of excise duty recovered on sales. With effect from July 01, 2017, ‘Sale of products’ excludes the amount of GST recovered. Accordingly, revenue from ‘Sale of Products’ and ‘Revenue from operations’ for the year ended March 31, 2018 are not comparable with those of the previous year.

Note: 3 Financial Risk Management, Objectives and Policies: A. Financial Risk Framework:

The Company is exposed to credit risk, liquidity risk and market risk. The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

a. Market risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Currency Rate Risk, Interest Rate Risk and other Price Risks, such as Commodity Risk. The Company enters into the derivative contracts as approved by the Board to manage its exposure to interest rate risk and foreign currency risk.

i. Foreign Currency Risk:

Foreign Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company has obtained foreign currency borrowings and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. The foreign currency risk exposure of the Company is mainly in U.S. Dollar (USD) and Euro (EUR). The Company’s exposure to foreign currency changes for all other currencies is not material.

The Company uses derivative financial instruments to reduce foreign exchange risk exposures and follows its risk management policies to mitigate the same. After taking cognizance of the natural hedge, the company takes appropriate hedges to mitigate its risk resulting from fluctuations in foreign currency exchange rate(s).

Note: This is mainly attributable to the exposure outstanding on foreign currency receivables and payables in the Company at the end of the reporting period. The assumed movement in exchange rate sensitivity analysis is based on the currently observable market environment.

Derivative financial instruments

The Company uses foreign currency forward and Interest rate swap contracts to manage some of its transactions exposure.

Forward Contracts

The Company has foreign currency sale and purchase forward contracts to offset the risk of currency fluctuations. These contracts are for settlement of operational receivable and payable. The Details of outstanding contracts as follow:

ii. Interest Rate Risk:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s main interest rate risk arises from working capital and long term borrowings. Company’s investments are primarily in fixed deposits which are short term in nature and do not expose to interest rate risk. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

Exposure to Interest rate risk:

The Interest rate profile of the Company’s interest bearing financial instruments as reported to management of Company is as follows:

Sensitivity Analysis:

An increase / decrease of 50 basis points at the reporting date would have increased / decreased the Profit before Tax as shown below. This analysis assumes that all other variants remain constant.

iii. Commodity price risk:

The main raw materials which company procures are global commodities and their prices are to a great extent linked to the movement of crude prices directly or indirectly and any adverse fluctuation in the raw material cost can impact the Company’s operating margins depending upon the ability of the Company to pass on the increase in costs to its customers. As selling prices are usually negotiated on a monthly / quarterly basis, in a balanced demand supply situation, the Company is able to adjust the selling prices following any changes in the raw material and other operating costs.

b. Credit risk

Credit risk refers to risk that counterparty will default on its contractual obligations resulting in financial loss to the company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, derivative financial instruments, other balances with banks, loans and other receivables.

For credit risk exposures, Refer Note No. 7-8, 12-16 of the financial statements.

i. Trade Receivable:

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The company has a well-defined and robust internal credit management system to monitor unsecured sales. A strong internal credit risk management policy has enabled the company to manage credit risk prudently even when credit risk were high. Credit guarantee insurance is also obtained wherever required. Trade receivables consist of a large number of customers spread across diverse industries and geographical areas with no significant concentration of credit risk. No single customer accounted for 10% or more of revenue in any of the years indicated.

To manage trade receivables, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables. ECL is determined with reference to historically observed default rates over the expected life of the trade receivables and is adjusted for forward looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated. A default on financial assets is when a counter party fails to make the payment within 365 days, when they fall due. This definition of default is determined by considering the business environment in which the entity operates and other macro-economic factors.

The Ageing of trade receivables and allowances for doubtful debts are given below:

Financial assets are written off when there is no reasonable expectation of recovery. Whereas the loans and receivables are written off and subsequently recoveries are made, these are recognised as an income in the financial statements

ii. Financial assets to which loss allowances measured using 12 months expected credit loss:

For financial assets (other than trade receivables)which are not measured fair value through Profit and Loss account, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The Company does not have any expected credit loss on financial assets which are measured on 12 month ECL and also has not observed any significant increase in credit risk since initial recognition of the financial assets.

Cash and Cash Equivalents, Deposit with Banks:

Credit risk on cash and cash equivalents and deposit with banks is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies.

Derivatives (Forward Contracts):

Derivatives are entered with banks, counter parties which have low credit risk, based on external credit ratings of counter parties. For other financial assets the company monitors ratings, credit spreads and financial strengths of its counterparties. Based on its ongoing assessment of the counter party’s risk, the company adjusts its exposures to various counter parties. Based on the assessment there is no impairment in other financial assets.

c. Liquidity risk:

Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company’s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.

The table below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities.

B. Capital risk management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Company’s capital management is to maximize the shareholder value. The Company’s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company’s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital.

For the purpose of the Company’s capital management, capital includes issued equity share capital, share premium and all other equity reserves. Debt includes, interest bearing loans and borrowings, trade payables and other financial liability.

The Company monitors capital using Debt-Equity Ratio, which is debt divided by Total Equity.

The ratios at March 31, 2018, March 31, 2017 and April 1, 2016 were as follows:

The Accounting Policy for fair value has been defined in Note 2(v) financial statements.

Valuation process and technique used to determine fair value:

Derivative contracts: The Company has entered into various foreign currency contracts and interest rate swaps contracts to manage its exposure to fluctuations in foreign exchange rates and interest rate respectively. These financial exposures are managed in accordance with the Company’s risk management policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data, i.e., mark to market values determined by the Authorized Dealers Banks.

c. Fair Value of Financial Instrument measured at amortized Cost:

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

Long-term variable-rate borrowings measured at amortized cost are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. Risk of other factors for the company is considered to be insignificant in valuation.

Note: 4 Segment Information

Segment information, as required under IND-AS-108 “Operating Segment”, has been provided in the consolidated financial statements of the Company and therefore, no separate disclosure on segment information is given in these standalone financial statements.

Note: 5 Employee Benefits (IND-AS 19)

a. Defined Contribution Plan

Contribution to Defined Contribution Plan recognised and charged off / debited to Statement of Profit & Loss are as under:

b. Defined Benefit Obligations (Gratuity):

The employees’ Gratuity Scheme is managed by Life Insurance Company Limited. The present value of obligation is determined based on actuarial valuation using the Projected Unit credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

c. Other Long Term Employee benefits:

Leave Encashment: The Company has provided for its Liability towards Leave encashment, based on the actuarial valuation

d. The disclosures required under IND-AS 19 “Employee Benefits” notified in the Companies (Indian Accounting Standards) Rules, 2015 are as given below:

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Same assumptions were considered for comparitive period i.e. 2016-17 as considered in previous GAAP on transition to IND-AS

e. Sick Leave:

The Company has provided for its Sick Leave liability based on the actuarial valuation. The Outstanding liability as on March 31, 2018, March 31, 2017 and April 1 2016 - RS.114.77 Lacs, RS.97.31 Lacs and RS.91.31 Lacs respectively.

f. Description of Risk Exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follow -

A. Salary Increases - Actual salary increases will increase the Plan’s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B. Investment Risk - If Plan is funded then the mismatch between assets and liabilities and actual return on assets being lower than the discount rate assumed at the last valuation date can impact the liability.

C. Discount rate - Reduction in discount rate in subsequent valuations can increase the plan’s liability.

D. Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

E. Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan’s liability.

Note: 6 Related Party Transaction

a. Parties where control exists Subsidiary / Step down Subsidiaries

i) Polyplex (Asia) Pte. Limited (PAPL)

ii) PAR LLC USA (PAR LLC)

iii) Polyplex (Thailand) Public Co Limited (PTL)

iv) Polyplex (Singapore) Pte. Limited (PSPL)

v) Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S. (PE)

vi) Polyplex USA LLC (PU)

vii) Polyplex Trading (Shenzhen) Co. Ltd. (PTSL)

viii) Polyplex America Holdings Inc. (PAH)

ix) EcoBlue Ltd. (EL)

x) Peninsula Beverages and Food Company Pvt. Ltd. (PBF), upto February 13, 2017

xi) Polyplex Europe B. V. (PEBV)

xii) Polyplex Paketleme Qozumleri Sanayi Ve Ticaret A.S. (PPC)

xiii) PT Polyplex Films Indonesia, incorporated during the year on October 11, 2017

b. Other related parties with whom transactions have taken place during the year Key Management Personnel (KMP)

i) Mr. Sanjiv Saraf (Chairman)

ii) Mr. Pranay Kothari (Executive Director)

iii) Mr. Brij Kishore Soni*

iv) Mr. Jitender Balakrishnan*

v) Ms. Pooja Haldea*

vi) Mr. Ranjit Singh*

vii) Mr. Sanjiv ChadhaA

viii) Dr. Suresh Inderchand Surana*

ix) Mr. Ashok Kumar Gurnani (Company Secretary)

x) Mr. Manish Gupta (Chief Financial Officer) independent Directors

A Non-Executive Director

Relative of Key Management Personnel

a. Ms. Ritu Kothari

c. Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence:

i) Beehive Systems Private Limited

ii) Manupatra Information Solutions Private Limited

iii) Altivolus Infotech Private Limited

iv) Dalhousie Villa Private Limited

v) Bhilangana Hydro Power Limited

vi) Kotla Hydro Power Private Limited

vii) Punjab Hydro Power Private Limited

viii) Abohar Power Generation Private Limited

ix) Kanchanjunga Power Company Private Limited

x) Utkarsh Trading and Holdings Limited

xi) Suresh Surana & Associates, LLP

xii) RSM Astute Consulting Private Limited

xiii) Praxis Consulting & Information Services Private Limited

xiv) S. D. College Society (Lahore), New Delhi

e. Terms & conditions of transactions with Related Parties

The sales to and purchases from related parties, including rendering / availing of service, are made on terms equivalent to those that prevail in arm’s length transactions. The outstanding balances at the year-end are unsecured and settlement occurs in cash. There have been no guarantees provided to or received for any related party receivable or payables. The Company has not recorded any impairment of receivables relating to amounts owed by related parties for the year ended 31st March 2018 and 31st March 2017 other than that stated above.

Note: 7 Contingent Liabilities not provided for and other commitments, in respect of:

a. Disputed matters under litigation:

* Amount deposited RS.3.62 Lacs (March 31, 2017: RS.9.22 Lacs; April 1, 2016: RS.9.69 Lacs)

** Amount deposited RS.23.84 Lacs (March 31, 2017: RS.22.68 Lacs; April 1, 2016: RS.21.55 Lacs)

b. Guarantees:

c. The Company has recognized grant in respect of duty paid on procurement of capital goods under EPCG scheme of Central Government which allows refund in the form of freely transferable duty credit scrips of the duty paid upon meeting of specific export obligations. The Company expects to meet its export obligations in future years. Export obligation as on March 31, 2018, March 31, 2017 and April 1 2016 - RS.1,060.61 Lacs, RS.959.45 Lacs and RS.706.23 Lacs respectively.

Note: 8 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of RS.1,329.84 Lacs (Previous Year: RS.71.00 Lacs)) amounts to RS.2,726.12 Lacs (Previous Year: RS.200.58 Lacs).

Note: 9 Research and Development

The revenue expenditure of RS.437.85 Lacs (Previous Year: RS.395.05 Lacs) and capital expenditure of Rs. Nil (Previous Year: Rs. Nil) on Research & Development are charged to the respective heads of account.

Note: 10 Capital Work-in-Progress includes:

Capital work in progress includes equipment not yet installed, construction / erection material, construction / erection work in progress, machinery at site and / or in transit and other pre-operative expenses pending allocation / capitalization. Pre-operative expenses pending allocation / capitalization are:

Note: 11 The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

The information regarding Micro, Small and Medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the company:

Note: 12 Corporate Social Responsibility:

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

Note: 13

Company has entered into operating lease agreement for a premise. Lease is non-cancellable for a period of three years and renewable thereafter on mutually agreed terms.

Note: 14 I. Disclosure pursuant to regulation 34(3) & 53(F) of SEBI (LODR) Regulations, 2015

II. Advances recoverable in cash or in kind under Loans & Advances (Note 18) include Rs. Nil (Balance as at March 31, 2017: Rs. Nil, April 1, 2016: Rs. Nil) due from the Officer / Director. Maximum amount due during financial year ended March 31, 2018: RS.10.00 Lacs (Financial year ended March 31, 2017: RS.37.00 Lacs and Financial Year ended April 1, 2016: RS.7.15 Lacs).

III. Details of Investment made / Loan Given under section 186(4) of the Companies Act, 2016:

1. Investment in Equity Shares:

* Ceased to be Subsidiary w.e.f. February 13, 2017

2. Details of investment made are given in Note-7 of financial statements.

3. Detail of Loan Given by the company are as under:

IV. During the year 2016-17 the Company had purchased 98,74,555 Nos of equity shares of Peninsula Beverages and Foods Company Private Limited (PBF) from wholly owned subsidiary - Polyplex (Asia) Pte. Limited and had also converted Company’s loan of RS.950 Lacs into 95,00,000 Nos of equity shares of PBF. PBF has ceased to be subsidiary of the Company w.e.f. February 13, 2017.

Note: 15 Recent accounting pronouncements

Appendix B to IND-AS 21, Foreign currency transactions and advance consideration:

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to IND-AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from 1 April 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of IND-AS 21 is expected to be insignificant.”

IND-AS 115

In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (“amended rules”). As per the amended rules, IND-AS 115 “Revenue from contracts with customers” supersedes IND-AS 11, “Construction contracts” and IND-AS 18, “Revenue” and is applicable for all accounting periods commencing on or after 1 April 2018.

IND-AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognised when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers.

The new revenue standard is applicable to the Company from 1 April 2018.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with IND-AS 8 Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)

The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of IND-AS 115 is expected to be insignificant.

Note: 16 Events occurring after the Balance Sheet Date:

There are no events occurring after the balance sheet date for the financial year 2017-18.

Note: 17 First Time Adoption of IND-AS

As stated in Note 2, these are the Company’s first financial statements prepared in accordance with IND-AS

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31st March 2018, the comparative information presented in these financial statements for the year ended 31st March 2017 and in the preparation of an opening IND-AS statement of financial position at 1st April 2016 (the Company’s date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Indian GAAP (previous GAAP). An explanation of how the transition from previous GAAP to IND-AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

Exemptions and exceptions availed:

Set out below are the applicable IND-AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to IND-AS.

A Ind AS optional exemptions:

(i) Investment Property & Intangible assets

Investment Property & Intangible assets

IND-AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its investment property as recognised in the financial statements as at the date of transition to IND-AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by IND-AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its Investment property t and intangible assets at their previous GAAP carrying value.

(ii) Investment in subsidiaries, joint ventures and associate

IND-AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its investment in subsidiaries, joint ventures and associate as recognised in the financial statements as at the date of transition to IND-AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure all of its investments in subsidiaries at their previous GAAP carrying value.

B. IND-AS mandatory exceptions

(i) Estimates

An entity’s estimates in accordance with IND-AS at the date of transition to IND-AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

IND-AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with IND-AS at the date of transition as these were not required under previous GAAP.

(ii) Classification and measurement of financial assets

IND-AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

(iii) Derecognition of financial assets and liabilities

As per IND-AS 101, an entity should apply the derecognition requirements in IND-AS 109, Financial Instruments, prospectively fortransactionsoccurringonorafterthedateoftransitiontoIND-AS.However,anentitymayapplythederecognitionrequirements retrospectively from a date chosen by it if the information needed to apply IND-AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The company has elected to apply the derecognition principles of IND-AS 109 prospectively.

(iv) Impairment of financial assets

An entity shall determine an approximate credit risk at the date when the financial instrument were initially recognised and compare that to the credit risk at the date of transition to IND-ASs. This should be based on reasonable and supportable information that is available without undue cost or effort. If the entity is unable to make this determination without undue cost or effort, it shall recognise a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised.

C. Reconcilliation of Equity

1 IND-AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

D Notes to first-time adoption:

1 Property Plant & Equipment

The Company has applied Ind AS 16 retrospectively for its property, plant and equipments, from the date of their acquisition. Under IND-AS, all foreign exchange transaction gains and losses are recorded in net income except to the extent these are treated as an adjustment to interest cost and considered for capitalization. Under Previous GAAP, foreign exchange gains and losses arising on foreign currency denominated borrowings that were incurred to acquire property, plant and equipment and intangible assets were recorded in the cost of the asset and depreciated over their remaining useful life. Under IND-AS, import duty waivers for capital assets purchased under Export Promotion Credit Guarantee (EPCG) schemes are recorded as deferred revenue and recognized in Statment of Profit and Loss on a systematic basis over the periods in which the related performance obligations are fulfilled. On the transition date, the Company, therefore, recorded an adjustment to measure such property, plant and equipment in accordance with IND-AS 16.

Under Previous GAAP, cost of the property, plant and equipment was recorded at the cash price paid to acquire such assets. Consequently, depreciation relating to the above differences in the cost of property, plant and equipment under IND-AS and Previous GAAP has also been adjusted.

2 Investment property

Under the previous GAAP, investment properties were presented under Property Plant & Equipment. Under IND-AS, investment properties are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or loss as a result of this adjustment.

3 Leasehold Land:

Under Previous GAAP, land was scoped out from the purview of AS 19 Leases and hence leasehold land were capitalised by the Company forming part of fixed assets. IND-AS 17 Leases covers leasehold land in its scope. Leasehold land were, therefore, identified under finance leases and operating leases based upon the criteria specified in the accounting standard. Leasehold land, which are identified under operating leases, have been decapitalised from Property plant & equipment. As per IND-AS 17, Leasehold Land has now been classified as operating lease and the premium paid on leasehold land is amortized over the period of the lease.

4 Derivative Assets:

Under previous GAAP, derivative instruments entered into for hedging the foreign currency fluctuation risk were accounted for on the principles of prudence. Pursuant to this, losses, if any, on Mark to Market basis, were recognised and gains were not recognised. Under IND-AS, gains on derivative instruments have been measured at fair value through profit or loss and gains or losses are recognised in the statement of profit and loss

5 Proposed Dividend

Under IND-AS, dividends payable are recorded as a liability in the year in which these are declared and approved. Under Previous GAAP, dividends payable were recorded as a liability in the year to which they relate.

6 Prepaid Processing Fees

Under previous GAAP, transaction costs incurred in connection with borrowings are amortised over the period of borrowings. IND-AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in profit or loss over the tenure of the borrowings as part of interest expense using effective interest rate method. Further, as per previous GAAP such unamortised amount was disclosed as prepaid assets which as per IND-AS now are netted off with the related borrowings.

7 Government Grant

Under previous GAAP, certain asset related grant were shown as a Capital Reserve. Ind AS requires an asset related grant to be presented in the balance sheet by setting up the grant as deferred income. Subsequently the income in relation to such grant is recognized in statement of profit and loss for the year ended March 31, 2017

8 Deferred tax

In the financial statements prepared under Previous GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/liability on temporary differences between taxable profit and accounting profit. Under IND-AS, deferred tax is accounted as per the Balance Sheet approach which requires creation of deferred tax asset/liability on temporary differences between the carrying amount of an asset / liability in the Balance Sheet and its corresponding tax base. The application of IND-AS has resulted in recognition of deferred tax on new temporary differences which were not required to be recognised under Previous GAAP.The (decreased) / increased in the deferred tax assets are on account of adjustments made on transition to IND-AS.

9 Remeasurements of post-employment benefit obligations

In the financial statements prepared under Previous GAAP, remeasurement benefit of defined plans (gratuity), arising primarily due to change in actuarial assumptions was recognised as employee benefits expense in the Statement of Profit and Loss. Under IND-AS, such remeasurement benefits relating to defined benefit plans is recognised in OCI as per the requirements of IND-AS 19- Employee benefits. Consequently, the related tax effect of the same has also been recognised in OCI.

10 Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under IND-AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2017 by RS.5,008.17 Lacs. There is no impact on the total equity and profit.

11 MAT Credit

Under previous GAAP, MAT credit forms part of non-current assets which as per the requirements of IND-AS 12 has been shown as a part of deferred tax liabilities (net).


Mar 31, 2017

Provisions, Contingent Liabilities and Contingent Assets

A provision is made/ recognized, based on the management estimate required to settle the obligation at balance sheet date, when the Company has a present obligation as a result of past event and it is possible that an outflow embodying economic benefit will be required to settle the obligation. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the Financial Statement.

RIGHTS ATTACHED TO THE SHARES

The Company has only one class of Equity Shares of par value of C10/- per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount and the remaining balance is distributed in proportion to the number of equity shares held by the Equity Shareholders.

In last five years there was no Bonus issue, buyback and / or issue of shares other than for cash considerations.

A. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of RS,71.00 Lacs (Previous Year: RS,354.77 Lacs)) amounts to RS,200.58 Lacs (Previous Year: RS,1,640.33 Lacs).

B. Contingent Liabilities not provided for and other commitments, in respect of:

ii. Guarantees given to the banks and others amounts to RS,563.15 Lacs (Previous Year: RS,678.61 Lacs).

iii. Bills discounted with banks: RS, Nil (Previous Year: RS, 422.12 Lacs).

iv. Custom duty saved amounting to RS,959.45 Lacs (Previous Year: RS,706.23 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

C. The revenue expenditure of RS,395.05 Lacs (Previous Year: RS,441.39 Lacs) and capital expenditure of C Nil (Previous Year: C Nil) on Research

& Development are charged to the respective heads of account.

D. i. As required by Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 the following information is disclosed:

ii. Balances of certain debtors, creditors, other liabilities, loans and advances are in the process of confirmation and / or reconciliation.

E. Capital work in progress includes equipments not yet installed, construction / erection material, construction / erection work in progress, machinery at site and / or in transit, advance to suppliers and other pre-operative expenses pending allocation / capitalization. Pre-operative expenses pending allocation / capitalization are: in i ,,c\

* Ceased to be Subsidiary w.e.f. February 13,2017

iii. During the year the Company had purchased 98,74,555 Nos of equity shares of Peninsula Beverages and Foods Company Private Limited (PBF) from wholly owned subsidiary - Polyplex (Asia) Pte. Limited and had also converted Company''s loan of RS,950 Lacs into 95,00,000 Numbers of equity shares of PBF. PBF has ceased to be subsidiary of the Company w.e.f. February 13, 2017.

ii. Exceptional Item for the year ended March 31, 2017 RS, Nil (Previous Year: RS,996 Lacs) represents provision towards outstanding balance of loan given to Peninsula Beverages & Foods Company Pvt Ltd.

iii. Advances recoverable in cash or in kind under Loans & Advances (Note 26 F) include RS, Nil (Previous Year: RS, Nil) due from the Officer / Director. Maximum amount due during the Year RS,37.00 Lacs (Previous Year: RS,7.15 Lacs).

Defined Benefit Plan

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

Q. As per Accounting Standard - 17 on Segment Reporting, segment information has been provided in Notes to Consolidated Financial Statements.

R. Related Party Disclosures (as identified by Management)

i. Parties where control exists

Subsidiary / Step down Subsidiaries a. Polyplex (Thailand) Public Co Limited (PTL)

b. Polyplex (Asia) Pte. Limited (PAPL)

c. Polyplex (Singapore) Pte. Limited (PSPL)

d. Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S. (PE)

e. Polyplex USA LLC (PU)

f. Polyplex Trading (Shenzhen) Co. Ltd. (PTSL)

g. PAR LLC USA (PAR LLC)

h. Polyplex America Holdings Inc (PAH)

i. EcoBlue Ltd. (EL)

j. Peninsula Beverages and Food Company Pvt Ltd. (PBF) upto February 13, 2017

k. Polyplex Europe B. V. (PEBV)

l. Polyplex Paketleme ^ozumleri Sanayi Ve Ticaret A.S. (PPC)

ii. Other related parties with whom transactions have taken place during the year Key Management Personnel (KMP) a. Mr. Sanjiv Saraf (Chairman)

b. Mr. Pranay Kothari (Executive Director)

c. Mr. Ashok Kumar Gurnani (Company Secretary)

d. Mr. Manish Gupta (Chief Financial Officer)

Relative of Key Management Personnel a. Ms. Ritu Kothari

Enterprises over which Key Management a. Beehive Systems Private Limited

Personnel, their relatives and major b. Manupatra Information Solutions Private Limited

shareholders have significant influence: c. Manupatra Publishing Private Limited

d. Altivolus Infotech Private Limited

e. Dalhousie Villa Private Limited

f. Bhilangana Hydro Power Limited

g. Kotla Hydro Power Private Limited

h. Punjab Hydro Power Private Limited

i. Abohar Power Generation Private Limited

j. Kanchanjunga Power Company Private Limited

k. Utkarsh Trading and Holdings Limited

l. Suresh Surana & Associates, LLP

m. RSM Astute Consulting Private Limited

n. Praxis Consulting & Information Services Private Limited

o. S. D. College Society (Lahore), New Delhi

S. Debtors over six months include overdue debtors aggregating to RS,31.95 Lacs (Previous Year: RS,31.95 Lacs) (net of provision of C Nil (Previous Year: Nil)) where Company has initiated legal or other necessary action for recovery.

T. (i) The provision for current income tax is after considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the management and is net of Deemed Tax Credit Entitlement in respect of overseas subsidiary company of RS, Nil (Previous Year: RS,24.37 Lacs)

(ii) Income Tax assessment in respect of certain years are in process and for certain years some additions have been made. In respect of additions made / disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provisions has been considered necessary by the management.

U. Salary expenditure during previous year is higher because of one-time special incentive paid to certain employees.

V. In accordance with the provisions of Accounting Standard on Impairment of Assets (AS - 28), the management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

X. Dividend proposed to be distributed for Equity Shareholders @ RS,4 / share amounting to RS, 1,539.85 Lacs (including Dividend Corporate Tax of RS,260.46 Lacs)

Y. Previous Year''s figures have been re-grouped/re-classified accordingly.

Z. Figures in the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been expressed in RS, Lacs with two decimals.


Mar 31, 2016

RIGHTS ATTACHED TO THE SHARES

The Company has only one class of Equity Shares of par value of '' 10/- per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount and the remaining balance is distributed in proportion to the number of equity shares held by the Equity Shareholders.

ii. Bills discounted with banks Rs. 422.12 Lacs (Previous Year: '' Nil).

iii. Custom duty saved amounting to '' Rs. 706.23 Lacs (Previous Year: '' Rs. 2,639.24 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

iv. Guarantees given to the banks and others Rs.678.61 Lacs (Previous Year: Rs.790.88 Lacs), including Rs.Nil (Previous Year: Rs.2.00 Lacs) on behalf of other bodies corporate.

C. Export incentives amounting to Rs.1,727.65 Lacs (Previous Year:Rs.1,625.71 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumption Account.

D. The revenue expenditure of Rs.441.39 Lacs (Previous Year: Rs.256.28 Lacs) and capital expenditure of Rs.Nil (Previous Year: Rs.0.79 Lacs) on Research & Development are charged to the respective heads of account.

T. Remuneration paid / provided to Mr. Pranay Kothari, Whole Time Director for FY 2015-16 amounting to Rs.314.50 Lacs (including contribution to Superannuation fund and Provident fund) and does not include payment of Rs.1.97 Lacs and Rs.0.66 Lacs paid towards leave encashment and medical reimbursements as per the policy of company, in terms of the approval of the shareholders as per Special Resolution passed by the members on September 28,2015, exceeds the ceiling on Managerial Remuneration as per Section 197, read with Companies (Appointment & Remuneration of Managerial Personnel) Rules of the Companies Act, 2013 by Rs.172.89 Lacs, for which application for approval is pending with Ministry of Corporate Affairs, Government of India.

U. Debtors over six months include overdue debtors aggregating to Rs.31.95 Lacs (Previous Year: Rs.31.95 Lacs) (net of provision of Rs.Nil (Previous Year: Rs.Nil)) where Company has initiated legal or other necessary action for recovery.

V. (i) The provision for current income tax is after considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the management and is net of Deemed Tax Credit Entitlement in respect of overseas subsidiary company of Rs.24.37 Lacs (Previous Year:Rs.Nil)

(ii) Income Tax assessment in respect of certain years are in process and for certain years some additions have been made. In respect of additions made / disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provisions has been considered necessary by the management.

W. In accordance with the provisions of Accounting Standard on Impairment of Assets (AS - 28), the management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

X. Previous Year''s figures have been re-grouped/re-classified accordingly.

Y. Figures in the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been expressed in Rs.Lacs with two decimals.


Mar 31, 2015

A. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of Rs. 21.28 Lacs (Previous Year - Rs. 195.24 Lacs)) - Rs. 130.36 Lacs. (Previous Year - Rs. 1,777.82 Lacs).

B. Contingent Liabilities not provided for and other commitments, in respect of:



i. Disputed matters under litigation:

(Rs. in Lacs)

Particulars Current Previous Year Year

Sales Tax & Entry Tax 103.36 113.15

Excise Duty & Customs Duty 29.14 29.14

Income Tax 382.46 232.67

Others 25.36 32.84

ii. Bills discounted with banks - Nil (Previous Year - Rs. Nil).

iii. Custom duty saved amounting to Rs. 2,639.24 Lacs (Previous Year - Rs. 1,513.89 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

iv. Guarantees given to the banks and others - Rs. 790.88 Lacs (Previous Year - Rs. 154.17 Lacs), including Rs. 2.00 Lacs (Previous Year - Rs. 2.00 Lacs) on behalf of other bodies corporate.

C. Export incentives amounting to Rs. 1,625.71 Lacs (Previous Year - Rs. 2,142.88 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumption Account.

D. The revenue expenditure of Rs. 256.28 Lacs (Previous Year - Rs. 243.65 Lacs) and capital expenditure of Rs. 0.79 Lacs (Previous Year - Rs. 0.03 Lacs) on Research & Development are charged to the respective heads of account.

ii. Balances of certain debtors, creditors, other liabilities, loans and advances are in the process of confirmation and / or reconciliation.

E. Capital work in progress includes equipments not yet installed, construction / erection material, construction / erection work in progress, machinery at site and / or in transit, advance to suppliers and other pre-operative expenses pending allocation / capitalization. Pre-operative expenses pending allocation / capitalization are:

F. As per Accounting Standard – 17 on Segment Reporting, segment information has been provided in Notes to Consolidated Financial Statements.

G. Related Party Disclosures (as identified by Management)

H. Parties where control exists :

Subsidiary / Step down Subsidiaries :

a. Polyplex (Thailand) Public Co Limited (PTL)

b. Polyplex (Asia) Pte. Limited (PAPL)

c. Polyplex (Singapore) Pte. Limited (PSPL)

d. Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S. (PE)

e. Polyplex USA LLC (PU)

f. Polyplex Trading (Shenzhen) Co. Ltd. (PTSL)

g. PAR LLC USA (PAR LLC)

h. Polyplex America Holdings Inc (PAH)

i. Polyplex Resins Sanayi Ve Ticaret A.S. (PR) upto March 02, 2015

j. EcoBlue Ltd. (EL)

k. Peninsula Beverages & Food Company Pvt Ltd. (PBF)

l. Polyplex Europa B. V. (PEBV)

m. Polyplex Paketleme Çozumleri Sanayi Ve Ticaret A.S. (PPC)

ii. Other related parties with whom transactions have taken place during the year :

Key Management Personnel (KMP) :

a. Mr. Sanjiv Saraf (Chairman)

b. Mr. Pranay Kothari (Executive Director)

c. Mr. Ashok Kumar Gurnani (Company Secretary)*

d. Mr. Manish Gupta (Chief Financial Officer)*

Relative of Key Management Personnel

a. Ms. Ritu Kothari

Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence:

a. Beehive Systems Private Limited

b. Manupatra Information Solutions Private Limited

c. Manupatra Publishing Private Limited

d. Altivolus Infotech Private Limited

e. Dalhousie Villa Private Limited

f. Bhilangana Hydro Power Limited

g. Kotla Hydro Power Private Limited

h. Punjab Hydro Power Private Limited

i. Abohar Power Generation Private Limited

j. Kanchanjunga Power Company Private Limited

k. Uttarakhand Hydro Power Private Limited

l. Utkarsh Trading and Holdings Limited*

m. Suresh Surana & Associates LLP*

n. RSM Astute Consulting Private Limited*

w.e.f. April 1, 2014 in accordance with Companies Act, 2013.

I. Remuneration paid / provided to Mr. Pranay Kothari, Whole Time Director for FY 2014-15 amounting to Rs. 207.60 Lacs (including contribution to Superannuation fund and Provident Fund) as per Special Resolution passed by the members on September 30, 2013, exceeds the ceiling on Managerial Remuneration as per Section 197, read with Companies (Appointment & Remuneration of Managerial Personnel) Rules of the Companies Act, 2013, for which application for waiver from Ministry of Corporate Affairs, Government of India is in process.

J. Debtors over six months include overdue debtors aggregating to Rs. 31.95 Lacs (Previous Year – Rs. 31.95 Lacs) (net of provision of Rs. Nil (Previous Year – Nil)) where Company has initiated legal or other necessary action for recovery.

K. (i) The provision for current income tax is after considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the management and is net of Deemed Tax Credit Entitlement in respect of overseas subsidiary company of Rs. Nil (Previous Year – Rs. 35.62 Lacs)

ii) On reassessment of deferred tax, liability written back amounting to Rs. Nil (Previous Year – Rs. 782.74 Lacs)

(iii) Income Tax assessment in respect of certain years are in process and for certain years some additions have been made. In respect of additions made / disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provisions has been considered necessary by the management.

L. During the current year, the Company has computed the Depreciation based on useful life of the fixed assets as prescribed under Schedule II of the Companies Act 2013 and in case of certain assets useful life as assessed by independent technical evaluation carried out by external valuer. The company has decided to charge full amount of depreciation in respect of certain assets whose life have been expired (life as per the Schedule II) to Statement of Profit and Loss in line with option given in notification no. G.S.R. 627 (E) dated 29th August 2014 issued by Ministry of Corporate Affairs. Had there not been any change in the useful life of the Fixed Assets the Profit would have been higher by Rs. 979.87 Lacs for the year ended March 2015.

M. In accordance with the provisions of Accounting Standard on Impairment of Assets (AS – 28), the management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

N. Previous Year's figures have been re-grouped/re- classified accordingly.

O. Figures in the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been expressed in Rs. Lacs with two decimals


Mar 31, 2014

NOTE : 1

OTHER EXPLANATORY NOTES

A. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of Rs. 195.24 Lacs (Previous Year - Rs. 207.42 Lacs) - Rs. 1,777.82 Lacs (Previous Year - Rs. 592.38 Lacs).

B. Contingent Liabilities not provided for and other commitments, in respect of:

i. Disputed matters under litigation:

(Rs. in Lacs)

Particulars Current Previous Year Year

Sales Tax & Entry Tax 113.15 179.03

Excise Duty & Customs Duty 29.14 29.14

Income Tax 232.67 73.54

Others 32.84 30.05

ii. Bills discounted with banks - Nil (Previous Year - Rs. 142.69 Lacs).

iii. Custom duty saved amounting to Rs. 1,513.89 Lacs (Previous Year - Rs. 2,469.66 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

iv. Guarantees given to the banks and others - Rs. 154.17 Lacs (Previous Year - Rs. 361.97 Lacs), including Rs. 2.00 Lacs (Previous Year - Rs. 2.00 Lacs) on behalf of other bodies corporate.

C. Export incentives amounting to Rs. 2,142.88 Lacs (Previous Year - Rs. 2,392.23 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumption Account.

D. The revenue expenditure of Rs. 243.65 Lacs (Previous Year - Rs. 219.51 Lacs) and capital expenditure of Rs. 0.03 Lacs (Net) (Previous Year- Rs. 0.64 Lacs) on Research & Development are charged to the respective heads of account.

E. i. As required by section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 the following information is disclosed:

II. Balances of certain debtors, creditors, other liabilities, loans and advances are in the process of confirmation and / or reconciliation.

F. Capital work in progress includes equipments not yet installed, construction / erection material, construction / erection work in progress, machinery at site and / or in transit, advance to suppliers and other pre-operative expenses pending allocation / capitalization. Pre-operative expenses pending allocation / capitalization are:

H. (i) Disclosure pursuant to Clause 32 of Listing Agreement

(ii) Advances recoverable in cash or in kind under Loans & Advances (Note 26 G) include Nil (Previous Year – Rs. 5 Lacs) due from the Officer / Director. Maximum amount due during the Year Rs. 5.29 Lacs (Previous Year – Rs. 7.17 Lacs).

iii. The Company took certain option structure, forward and interest rate / currency swap contracts to cover the foreign exchange risk related with the import of Fixed Assets. During the year, Nil (Previous Year – loss (net) of Rs. 36.81 Lacs) on foreign exchange derivatives taken for payments to suppliers of imported capital goods and loss (net) of Rs. 103.78 Lacs (Previous Year – gain (net) of Rs. 0.56 Lacs) on mark to market on outstanding derivatives as on March 31, 2014 has been capitalized / shown as part of pre- operative expenses based on expert opinion, as the same is attributable to the Fixed Assets.

Defined Benefit Plan

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

R. As per Accounting Standard – 17 on Segment Reporting, segment information has been provided in Notes to Consolidated Financial Statements.

S. Related Party Disclosures (as identified by Management)

Disclosures as required by AS-18, "Related party Disclosures "are given below:

i. Parties where control exists :

Subsidiary / Step down Subsidiaries :

a. Polyplex (Thailand) Public Co. Limited (PTL)

b. Polyplex (Asia) Pte. Limited (PAPL)

c. Polyplex (Singapore) Pte. Limited (PSPL)

d. Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.(PE)

e. Polyplex USA LLC (PU)

f. Polyplex Trading (Shenzhen) Co. Ltd. (PTSL)

g. PAR LLC USA (PAR LLC) h. Polyplex America Holdings Inc (PAH)

i. Polyplex Resins Sanayi Ve Ticaret A.S. (PR)

j. EcoBlue Ltd. (EL)

k. Peninsula Beverages & Foods Company Pvt. Ltd. (PBF)

l. Polyplex Europa B. V. (PEBV) w.e.f April 17, 2013

m. Polyplex Paketleme Çozumleri Sanayi Ve Ticaret A.S. (PPC) w.e.f September 11, 2013

ii. Other related parties with whom transactions have taken place during the year :

Key Management Personnel (KMP) :

a. Mr. Sanjiv Saraf (Chairman)

b. Mr. Pranay Kothari (Executive Director) Relative of Key Management Personnel :

a. Ms. Ritu Kothari

Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence :

a. Beehive Systems Private Limited

b. Manupatra Information Solutions Private Limited

c. Manupatra Publishing Private Limited

d. Altivolus Infotech Private Limited

e. Dalhousie Villa Private Limited

f. Bhilangana Hydro Power Limited

g. Kotla Hydro Power Private Limited

h. Punjab Hydro Power Private Limited

i. Abohar Power Generation Private Limited

j. Kanchanjunga Power Company Private Limited

T. In view of insufficiency / inadequacy of Profit for the Financial Year ended March 31, 2013, remuneration paid to Mr. Pranay Kothari, Whole Time Director amounting to Rs. 142.63 Lacs exceeded the ceiling on Managerial Remuneration as per Section 198, 269 read with Section 309 of the Companies Act, 1956, for which Company''s application is pending for approval of the Ministry of Corporate Affairs, Government of India.

Further, application for approval of remuneration payable to Mr. Pranay Kothari amounting to Rs. 208.24 Lacs as approved by the shareholders for the Financial Year 2013-14 is pending with the Ministry of Corporate Affairs, Government of India. Pending receipt of approval, remuneration of Rs. 122.24 Lacs, as permitted under Schedule XIII of Companies Act, 1956 have been paid / provided.

U. Debtors over six months include overdue debtors aggregating to Rs. 31.95 Lacs (Previous Year – Rs. 45 Lacs) (net of provision of Rs. Nil (Previous Year – Nil)) where Company has initiated legal or other necessary action for recovery.

V. (i) The provision for current income tax is after considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the management and is net of

Deemed Tax Credit Entitlement in respect of overseas subsidiary company of Rs. 35.62 Lacs (Previous Year – Rs. 39.32 Lacs)

(ii) On reassessment of deferred tax, liability written back amounting to Rs. 782.74 Lacs.

(iii) Income Tax assessment in respect of certain years are in process and for certain years some additions have been made. In respect of additions made / disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provision has been considered necessary by the management.

W. In accordance with the provisions of Accounting Standard on Impairment of Assets (AS – 28), the management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

X. Previous Year''s figures have been re-grouped/re- classified accordingly.

Y. Figures in the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been expressed in Rs. Lacs with two decimals.


Mar 31, 2013

A. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of Rs.207.42 Lacs (Previous Year - Rs.132.71 Lacs) - Rs.592.38 Lacs. (Previous Year - Rs.589.17 Lacs).

B. Contingent Liabilities not provided for and other commitments, in respect of:

i. Disputed matters under litigation:

(Rs. in Lacs) Particulars Current previous Year Year

Sales Tax & Entry Tax 179.03 238.87

Excise Duty & Customs Duty 29.14 29.14

Income Tax 73.54 73.54 Others 30.05 18.75

ii. Bills discounted with banks - Rs.142.69 Lacs (Previous Year - Rs.871.86 Lacs).

iii. (a) Custom duty saved amounting to Rs.2,469.66 Lacs (Previous Year - Rs.2,765.16 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

(b) Import duty saved amounting to Rs.128.47 Lacs (Previous Year - Rs.162.43 Lacs) in respect of goods imported under advance license against which export obligation is pending to be fulfilled.

iv. Guarantees given to the banks and others - Rs.361.97 Lacs (Previous Year - Rs.428.97 Lacs), including Rs.2.00 Lacs (Previous Year - Rs.2.00 Lacs) on behalf of other bodies corporate.

C. Export incentives amounting to Rs.2,392.23 Lacs (Previous Year - Rs.1,284.59 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumption Account.

D. The revenue expenditure of Rs.232.80 Lacs (Previous Year – Rs.344.06 Lacs) and capital expenditure of Rs.0.64 Lacs (Previous Year – Rs.3.39 Lacs) on Research & Development has been debited to the respective heads of account.

E. Capital work in progress includes equipments not yet installed, construction / erection material, construction / erection work in progress, machinery at site and / or in transit, advance to suppliers and other pre-operative expenses pending allocation / capitalization. Pre-operative expenses pending allocation / capitalization are:

F. Advances recoverable in cash or in kind under Loans & Advances (Note 26 G) include Rs.5 Lacs (Previous Year – Nil) due from an officer / director. Maximum amount due during the Year Rs.7.17 Lacs (Previous Year – Nil).

G. i. During the Current Year, Company has sold its holding of 25,000 nos. common stock in Polyplex (Americas) Inc. (PA) (representing 9.88% shareholding) having book value of Rs.44.54 Lacs to its subsidiary company Polyplex (Thailand) Public Co. Limited (PTL), which has resulted in profit of Rs.116.13 Lacs and the same is shown as exceptional income. Further, during the year, PTL has acquired non controlling stake in ''PA'' which subsequently has been merged into Polyplex USA LLC (PU) w.e.f. January 31, 2013.

ii. During the Previous Year, Company had retrospectively changed its method of providing depreciation on fixed assets pertaining to its plant at Khatima (Except Line 1) and Bajpur from Straight Line Method (SLM) to Written Down Value (WDV) Method, at the rates prescribed in Schedule XIV to the Companies Act, 1956. Accordingly, during the Previous Year, the Company has recorded an additional depreciation of Rs.7,078.80 Lacs in respect of earlier years as an exceptional item.

H. The Company has entered into operating lease agreement for a premise. Lease is non- cancellable for a period of six years and renewable thereafter on mutually agreed terms.

I. The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules, 2006, are given below:

J. As per Accounting Standard – 17 on Segment Reporting, segment information has been provided in Notes to Consolidated Financial Statements.

K. Related Party Disclosures (as identified by Management)

Disclosures as required by AS-18, "Related Party Disclosures "are given below:

i. Parties where control exists:

Subsidiary/Step down Subsidiaries

a. Polyplex (Thailand) Public Co. Limited (PTL)

b. Polyplex (Asia) Pte. Limited (PAPL)

c. Polyplex (Singapore) Pte. Limited (PSPL)

d. Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.(PE)

e. Polyplex USA LLC (PU)

f. Polyplex (Americas) Inc (PA) merged

with PU on January 31, 2013.

g. Polyplex Trading (Shenzhen) Co. Ltd. (PTSL)

h. PAR LLC USA (PAR LLC)

i. Polyplex America Holdings Inc. (PAH)

j. Polyplex Resins Sanayi Ve Ticaret A.S. (PR)

k. EcoBlue Ltd. w.e.f. October 1, 2012

l. Peninsula Beverages & Foods Company

Pvt. Ltd. w.e.f. February 6, 2013

ii. Other related parties with whom transactions have taken place during the year:

Key Management Personnel (KMP)

a. Shri Sanjiv Saraf (Chairman)

b. Shri Pranay Kothari (Executive Director)

c. Shri Ranjit Singh (Whole Time Director)

upto October 31, 2012.

Relative of Key Management Personnel

a. Smt. Ritu Kothari

Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence:

a. Beehive Systems Private Limited

b. Manupatra Information Solutions Private Limited

c. Manupatra Publishing Private Limited

d. Altivolus Infotech Private Limited

e. Dalhousie Villa Private Limited

f. Bhilangana Hydro Power Limited

g. Peninsula Beverages & Foods Company

Pvt. Ltd. upto February 5, 2013

L. In view of insufficiency / inadequacy of profits for the current financial year ended March 31, 2013, remuneration paid to Whole Time Directors exceeded the limit prescribed under provisions of Section 198, 269 read with Section 309 of the Companies Act 1956. Accordingly, Remuneration paid to Shri Pranay Kothari and Shri Ranjit Singh, Whole Time Directors amounting to Rs.289.57 Lacs is subject to the approval of the members (by way of Special Resolution), in the ensuing General Meeting, which includes Rs.142.63 Lacs in respect of Shri Pranay Kothari, Whole Time Director for which application for approval of the Ministry of Corporate Affairs, Government of India will be made in due course.

M. Trade Receivables over six months include overdue debts aggregating to Rs.45 Lacs (Previous Year – Nil) (net of provision of Rs.Nil (Previous Year – Nil)) where Company has initiated legal or other necessary action for recovery.

N. (i) The provision for current income tax is after considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the management and is net of

Deemed Tax Credit Entitlement in respect of overseas subsidiary company of Rs.39.32 Lacs (Previous Year – Rs.344.85 Lacs)

(ii) Income Tax assessment in respect of certain years are in process and for certain years some additions have been made. In respect of additions made / disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provision has been considered necessary by the management.

O. In accordance with the provisions of Accounting Standard on Impairment of Assets (AS – 28), the management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

P. Previous Year''s figures have been re-grouped/re- classified accordingly.

Q. Figures in the Balance Sheet, Profit & Loss Statement and Cash Flow Statement have been expressed in Rs. Lacs with two decimals.


Mar 31, 2012

NOTE 1 SHARE CAPITAL

RIGHTS ATTACHED TO THE SHARES

The Company has only one class of Equity Shares of par value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to the approval of shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the Company after distribution of all preferential amount and the remaining balance is distributed in proportion to the number of Equity Shares held by the Equity Shareholders.

NOTE : 2

OTHER EXPLANATORY NOTES

A. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of Rs. 132.71 Lacs, Previous Year - Rs. 1,546.91 Lacs) - Rs. 589.17 Lacs. (Previous Year - Rs. 7,525.97 Lacs).

B. Contingent Liabilities not provided for and other commitments, in respect of:

I. Disputed matters under litigation:

(Rs. in Lacs)

Particulars Current Previous Year Year

Sales Tax & Entry Tax 238.87 352.07

Excise Duty & Customs Duty 29.14 22.95

Income Tax 73.54 73.54

Others 18.75 20.71

II. Bills discounted with banks - Rs. 871.86 Lacs (Previous Year - Rs. 338.52 Lacs).

III. (i) Custom Duty saved amounting to Rs. 2,765.16 Lacs (Previous Year - Rs. 4,613.85 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

(ii) Import duty saved amounting to Rs. 162.43 Lacs (Previous Year - Nil) in respect of goods imported under advance license against which export obligation is pending to be fulfilled.

IV. Guarantees given to the banks and others - Rs. 428.97 Lacs (Previous Year - Rs. 340.30 Lacs), including Rs. 2.25 Lacs (Previous Year - Rs. 2.25 Lacs) on behalf of other bodies corporate.

A. Export incentives amounting to Rs. 1,284.59 Lacs (Previous Year - Rs. 1,189.55 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumed Account.

B. The expenditure of Rs. 400.80 Lacs (Previous Year - Rs. 266.79 Lacs) on Research & Development has been debited to the respective heads of account.

C. I. As required by Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 the following information is disclosed:

(Rs. in Lacs)

Sl. Particulars 2011-12 2010-11 No.

(a) (i) Principal amount remaining unpaid at the end of the accounting year - -

(ii) Interest due on above - -

(b) The amount of interest paid by the buyer along with amount of payment made to the suppliers beyond the appointed date - -

(c) The amount of interest accrued and remaining unpaid at the end of financial year - -

(d) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the due date during the year) but without adding interest specified under this Act - -

(e) The amount of further interest due and payable in succeeding year, until such interest is actually paid - -

II. Balances of certain debtors, creditors, other liabilities, loans and advances are in the process of confirmation and/or reconciliation.

D. Capital work in progress includes equipment not yet installed, construction/erection material, construction/erection work in progress, machinery at site and/or in transit, advance to suppliers and other pre-operative expenses pending allocation/capitalization. Pre-operative expenses pending allocation/capitalization are:

E. Advances recoverable in cash or in kind under Loans & Advances (Note 26 G) include Rs. Nil (Previous Year - Nil) due from the officer/director. Maximum amount due during the year Rs. Nil (Previous Year - Rs. 0.25 Lacs).

F. During the Current Year, the Company has retrospectively changed its method of providing depreciation on fixed assets pertaining to its plant at Khatima (Except Line 1) and Bajpur from Straight Line Method (SLM) to Written Down Value (WDV) Method, at the rates prescribed in Schedule XIV to the Companies Act, 1956. This change will result in more appropriate basis of charging depreciation.

This change represents time and pattern in which the economic benefit flows to the Company. Accordingly, the Company has recorded an additional depreciation amounting to Rs. 7,078.80 Lacs related to earlier years which has been disclosed as an exceptional item and Rs. 3,602.82 Lacs as a additional charge for current year. The Profit After Tax (PAT) for Current Year would have been higher by Rs. 5,807.04 Lacs had the Company continued the use of earlier method of depreciation.

G. The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plan recognised and charged off/debited to Statement of Profit & Loss/Pre-operative Expenses pending allocation are as under:

Defined Benefit Plan

Employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

H. As per Accounting Standard-17 on Segment reporting, segment information has been provided in Notes to Consolidated Financial Statements.

I. Related Party Disclosures (as identified by Management)

Disclosures as required by AS-18, "Related Party Disclosures" are given below:

J. Parties where control exists

Subsidiary/Step down Subsidiaries

- Polyplex (Thailand) Public Co. Limited

- Polyplex (Asia) Pte. Limited

- Polyplex (Singapore) Pte. Limited

- Polyplex Europa Polyester Film Sanayi Ve Ticaret A.S.

- Polyplex (Americas) Inc.

- Polyplex Trading (Shenzhen) Co. Limited

- PAR LLC USA (PAR LLC) w.e.f. May 06, 2011

- Polyplex America Holdings Inc. (PAH) w.e.f. July 18, 2011

- Polyplex USA LLC (PU) w.e.f. July 18, 2011

- Polyplex Resins Sanyi Ve Ticaret A.S. (PR) w.e.f. December 02, 2011

II. Other Related Parties with whom transactions have taken place during the year

Key Management Personnel (KMP)

- Shri Sanjiv Saraf (Chairman)

- Shri Pranay Kothari (Executive Director)

- Shri Ranjit Singh (Whole Time Director)

Relative of Key Management Personnel

- Smt. Ritu Kothari

Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence:

- Beehive Systems Private Limited

- Manupatra Information Solutions Private Limited

- Altivolus Infotech Private Limited

- Dalhousie Villa Private Limited

- Bhilangana Hydro Power Limited

K. Debtors over six months include overdue overseas debtors aggregating to Rs. Nil (Previous Year - Rs. Nil) net of provision of Rs. Nil (Previous Year - Nil) where Company has initiated legal or other necessary action for recovery.

L. (I) The provision for current income tax is after considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the Management and is net of Deemed Tax Credit Entitlement in respect of overseas subsidiary company of Rs. 344.85 Lacs.

(II) Income Tax assessment in respect of certain years is in process and for certain years some additions have been made. In respect of additions made/disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provision has been considered necessary by the Management.

M. In accordance with the provisions of Accounting Standard on Impairment of Assets (AS - 28), the Management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

N. Current Year accounts have been prepared in accordance with the revised Schedule-VI of the Companies Act, 1956 and Previous Year's figures have been re-grouped/re-classified accordingly.

O. Figures in the Balance Sheet, Profit & Loss Statement and Cash Flow Statement have been expressed in Rs. in Lacs with two decimals.


Mar 31, 2011

1) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of Rs.1,546.91 Lacs, Previous Year – Rs.670.01 Lacs) – Rs.7,525.97 Lacs. (Previous Year – Rs.3,069.40 Lacs).

2) Contingent Liabilities not provided for, in respect of:

a) Disputed matters under litigation:

(Rs. in Lacs)

Particulars Current Previous Year Year

Sales Tax & Entry Tax 352.07 283.9

Excise Duty & Customs Duty 22.95 22.95

Income Tax 73.54 73.54

Others 20.71 41.21

b) Bills discounted with banks – Rs.338.52 Lacs (Previous Year – Rs.19.36 Lacs).

c) (i) Custom duty saved amounting to

Rs.4,613.85 Lacs (Previous Year – Rs.6,429.39 Lacs) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

(ii) Import duty saved amounting to Rs.Nil

(Previous Year – Rs.97.68 Lacs) in respect of goods imported under Advance License against which export obligation is pending to be fulfilled.

d) Guarantees given to the banks and others - Rs.340.30 Lacs (Previous Year – Rs.17.50 Lacs), including Rs.2.25 Lacs (Previous Year – Rs.17.50 Lacs) on behalf of other bodies corporate.

3) Import duty benefit under Duty Entitlement Pass

Book (DEPB) Scheme and profit/loss on sale of DEPB aggregating to Rs.1,189.55 Lacs (Previous Year – Rs.105.70 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumed Account.

4) The expenditure of Rs.266.79 Lacs (Previous Year – Rs.213.90 Lacs) on Research & Development has been debited to the respective heads of account.

5) The Company's investment in the preference share capital of its subsidiary viz. Polyplex (Asia) Pte. Limited was redeemed during Financial Year 2009- 10 as per terms of the agreement at the allotted price and there was an exchange gain of Rs.4.03 Lacs (net) which was shown as exceptional item during the year ended 31st March, 2010.

6) Capital work in progress includes equipments not

yet installed, construction / erection material, construction / erection work in progress, machinery at site and / or in transit, advance to suppliers and other pre-operative expenses pending allocation / capitalization. Pre-operative expenses pending allocation / capitalization are :

7) Advances recoverable in cash or in kind under Loans & Advances (Schedule 9) include Rs. Nil (Previous Year – Rs.0.25 Lacs) due from an Officer /Director. Maximum amount due during the year Rs.0.25 Lacs (Previous Year – Rs.0.40 Lacs).

8) Company has entered into operating lease agreement for a premise. Lease is non- cancellable for a period of six years and renewable thereafter on mutually agreed terms.

9) The allottee / holder of 16,50,000 Nos. Warrants

issued by the Company on preferential basis on October 31, 2007, entitling them to exercise option to apply for equal number of equity shares at a price of Rs.152/- per share (including premium of Rs.142/-, 10% upfront amount paid in earlier year amounting to Rs.250.80 Lacs) did not exercise the option before the last date (as stipulated) i.e. April 30, 2009 and accordingly amount paid on stated warrants has been forfeited during year ended 31st March 2010.

(c) In accordance with the notification No. G.S.R. 225(E) dated 31st March 2009, issued by the Central

Government with regard to AS-11, the Company had exercised, the onetime option available, to adjust the exchange differences arising on long term foreign currency monetary items to the cost of depreciable capital assets in so far as it relates to the acquisition of such assets and in other cases, by transferring to the "Foreign Currency Monetary Item Translation Difference Account". Accordingly, the Company has carried over long term monetary exchange loss of Rs.Nil through "Foreign Currency Monetary Item Translation Difference Account" (Previous Year – Rs.18.11 Lacs), to be amortised over the balance period of such long term asset/liability but not beyond 31st March 2011. Further, the foreign exchange fluctuation loss of Rs.16.11 Lacs (Previous Year – gain of Rs.1,820.05 Lacs) taken in Pre operative expenditure on capital account has been taken to the cost of fixed assets.

(d) The Company took certain option structure, forward and interest rate / currency swap contracts to cover the foreign exchange risk related with the import of fixed assets. During the year, gain of Rs.233.92 Lacs (net) (Previous Year – gain of Rs.290.43 Lacs (net)) on foreign exchange derivatives taken for payments to suppliers of imported capital goods and loss of Rs.1.63 Lacs (Previous Year – loss of Rs.49.18 Lacs (net)) on mark to market on outstanding derivatives as on 31st March 2011 has been capitalized / shown as part of pre-operative expenses based on expert opinion, as the same is attributable to the fixed assets.

10) The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below:

Defined Benefit Plan

The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

11) Segment Reporting:

i) The Company is in only one line of business namely Plastic Film.

ii) The Segment Revenue in the geographical segments considered for disclosure is as follows:

(a) Revenues inside India include sales to customers located within India.

(b) Revenues outside India include sales to customers located outside India.

12) Related Party Disclosures (as identified by Management)

Disclosures as required by AS-18, "Related Party Disclosures" are given below:

A. Parties where control exists:

Subsidiary/Step down Subsidiaries:

– Polyplex (Thailand) Public Co Limited (PTL)

– Polyplex (Asia) Pte. Limited (PAPL)

– Polyplex (Singapore) Pte. Limited (PSPL)

– Polyplex Europa Polyester Film Sanayi

Ve Ticaret AS(PE)

– Polyplex (Americas) Inc. (PA)

– Polyplex Trading (Shenzhen) Co.

Limited (PTSL)

B. Other related parties with whom transactions have taken place during the year:

Key Management Personnel (KMP):

– Shri Sanjiv Saraf (Chairman)

– Shri Pranay Kothari (Executive Director)

– Shri Ranjit Singh (Whole Time Director)

Relative of Key Management Personnel:

– Smt. Ritu Kothari

Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence:

– Beehive Systems Private Limited

– Manupatra Information Solutions Private Limited

– Altivolus Infotech Private Limited

– Dalhousie Villa Private Limited

– Bhilangana Hydro Power Limited

13) Debtors over six months include overdue overseas debtors aggregating to Rs.Nil (Previous Year – Rs.Nil) (net of provision of Rs.Nil (Previous Year – Rs.20.23 Lacs)) where Company has initiated legal or other necessary action for recovery.

14 (a) The provision for current income tax has been made considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by Management.

(b) Income Tax assessment in respect of certain years are in process and for certain years some additions have been made. In respect of additions made / disallowances, in some cases the Company has filed appeals with authorities, pending decisions no provisions has been considered necessary by the Management.

15) In accordance with the provisions of Accounting Standard on Impairment of Assets (AS – 28), the Management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

16) Current Year figures are not comparable with that of Previous Year due to startup of operations at Bazpur plant during Q4' 2009-10.

17) Figures for Previous Year have been regrouped and / or rearranged, wherever considered necessary to conform to the Current Year's classification.

18) Figures in the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been expressed in Rs.Lacs with two decimals.


Mar 31, 2010

1) Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances of Rs.670.01 Lacs, Previous Year - Rs.6,244.09 Lacs) - Rs.3,069.40 Lacs. (Previous Year - Rs.19,811.56 Lacs).

2) Contingent Liabilities not provided for, in respect of:

a) Disputed matters under litigation:

(Rs. in Lacs)

Particulars Current Previous Year Year

Sales Tax & Entry Tax 283.90 283.74

Excise Duty & Customs Duty 22.95 22.95

Income Tax 73.54 73.54

Others 41.21 14.95

b) Bills discounted with banks - Rs.19.36 Lacs (Previous Year - Nil).

c) (i) Custom duty saved amounting to Rs.6,429.39 Lacs (Previous Year - Rs.1,627.82) in respect of import of machinery under Export Promotion Capital Goods (EPCG) Scheme against which export obligation is pending to be fulfilled.

(ii) Import duty saved amounting to Rs.97.68 Lacs (Previous Year - Rs.Nil) in respect of goods imported under advance license against which export obligation is pending to be fulfilled.

d) Guarantees given to the banks and others - Rs.17.50 Lacs (Previous Year - Rs.159.50 Lacs), including Rs.17.50 Lacs (Previous Year - Rs.17.50 Lacs) on behalf of other bodies corporate.

3) Import duty benefit under Duty Entitlement Pass Book (DEPB) Scheme and profit/loss on sale of DEPB aggregating to Rs.105.70 Lacs (Previous Year - Rs.126.98 Lacs) are accounted for on accrual basis and have been credited to Raw Materials Consumed Account

4) In the last quarter of the year, Company has commenced commercial production of BOPET film, BOPP film, Metalized film & PET Chips at its Bazpur facility in District: Udham Singh Nagar, Uttarakhand.

5) The Companys investment in the preference share capital of its subsidiary viz. Polyplex (Asia) Pte. Limited has been redeemed during the year as per terms of the agreement at the allotted price resulting exchange gain of Rs.4.03 Lacs (Previous Year – Nil) (net), which has been shown as exceptional item.

6) The expenditure on Research & Development has been debited to the respective heads of account since such expenses cannot be segregated in view of the peculiar nature of activities relating to such work.

7) (a) As required by Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 the following information is disclosed:

8) Capital work in progress includes equipments not yet installed, construction/erection material, construction/erection work in progress, machinery at site and/or in transit, advance to suppliers and other pre-operative expenses pending allocation/ capitalization. Pre-operative expenses pending allocation/capitalization are:

9) Advances recoverable in cash or in kind under Loans & Advances (Schedule 7) include Rs.0.25 Lacs (Previous Year - Nil) due from an Officer/ Director. Maximum amount due during the year Rs.0.40 Lacs (Previous Year - Rs.1.67 Lacs).

10) The allottee/holder of 16,50,000 Nos. Warrants issued by the Company on preferential basis on October 31, 2007, entitling them to exercise option to apply for equal number of equity shares at a price of Rs.152/- per share (including premium of Rs.142/-, 10% upfront amount paid in earlier year amounting to Rs.250.80 Lacs) did not exercise the option before the last date (as stipulated) i.e. April 30, 2009 and accordingly amount paid on stated warrants has been forfeited during the year.

11) During the previous year, the Company entered into operating lease agreement for a premise. Lease is non- cancellable for a period of six years and renewable thereafter on mutually agreed terms.

(c) In accordance with the notification, G.S.R. 225(E) dated 31st March 2009, issued by the Central Government with regard to AS-11, the Company had exercised, the onetime option available, to adjust the exchange differences arising on long term foreign currency monetary items to the cost of depreciable capital assets in so far as it relates to the acquisition of such assets and in other cases, by transferring to the “Foreign Currency Monetary Item Translation Difference Account”.

Accordingly, the Company has carried over long term monetary exchange loss of Rs.18.11 Lacs through “Foreign Currency Monetary Item Translation Difference Account” (Previous Year - Rs.252.99 Lacs), to be amortised over the balance period of such long term asset/liability but not beyond March 31, 2011. Further, the foreign exchange fluctuation gain of Rs.1,820.05 Lacs (Previous Year loss of Rs.553.85 Lacs taken in Pre operative expenditure) on capital account has been taken to the cost of fixed assets.

(d) The Company took certain option structure, forward and interest rate/currency swap contracts to cover the foreign exchange risk related with the import of fixed assets. During the year, gain (net) of Rs.290.43 Lacs (Previous Year loss of Rs.1,904.69 Lacs (net)) on foreign exchange derivatives taken for payments to suppliers of imported capital goods and loss of Rs.49.18 Lacs (Previous Year loss of Rs.245.61 Lacs (net)) on mark to market on outstanding derivatives as on March 31, 2010 has been capitalized/shown as part of pre-operative expenses based on expert opinion, as the same is attributable to the fixed assets.

12) The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below:

Defined Contribution Plan

Contribution to Defined Contribution Plan recognised and charged off/debited to Profit and loss Account/Pre-operative Expenses pending allocation are as under:

The Employees Gratuity Fund/Scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for Leave Encashment is recognised in the same manner as gratuity.

13) Segment Reporting:

i) The Company is in only one line of business namely Plastic Film.

ii) The Segment Revenue in the geographical segments considered for disclosure is as follows:

(a) Revenues inside India include sales to customers located within India.

(b) Revenues outside India include sales to customers located outside India.

14) Related Party Disclosures (as identified by Management)

Disclosures as required by AS-18, "Related Party Disclosures "are given below:

A. Parties where control exists:

Subsidiary/Step down Subsidiaries:

Polyplex (Thailand) Public Co Limited (PTL)

Polyplex (Asia) Pte. Limited (PAPL)

Polyplex (Singapore) Pte. Limited (PSPL)

Polyplex Europa Polyester Film San. Ve Tic A.S.(PE)

Polyplex (Americas) Inc. (PA)

Polyplex Trading (Shenzhen) Co. Limited (PTSL) (w.e.f. July 15, 2009)

B. Other related parties with whom transactions have taken place during the year:

Key Management Personnel:

Shri Sanjiv Saraf (Chairman)

Shri Pranay Kothari (Executive Director)

Shri Ranjit Singh (Whole Time Director)

Enterprises over which Key Management Personnel, their relatives and major shareholders have significant influence:

Beehive Systems Private Limited

Manupatra Information Solutions Private Limited

Altivolus Infotech Private Limited

Dalhousie Villa Private Limited

Bhilangana Hydro Power Limited

15) Debtors over six months include overdue overseas debtors aggregating to Nil (Previous Year - Rs.60.81 Lacs) (net of provision of Rs.20.23 Lacs (Previous Year - Rs.20.23 Lacs)) where Company has initiated legal or other necessary action for recovery.

16) (a) The provision for current income tax has been made considering various benefits and allowances available to the Company under the provisions of Income Tax Act, 1961, as assessed by the Management.

(b) Income Tax assessment in respect of certain years is in progress and for certain years some additions have been made. In respect of additions made/disallowances, in some cases the Company has filed appeals with Appellate Authorities, pending decisions no provisions has been considered necessary by the Management.

17) In accordance with the provisions of Accounting Standard on Impairment of Assets (AS-28), the Management has made assessment of assets considering the business prospects related thereto and, accordingly, no provision on account of impairment of assets is considered necessary in these accounts.

18) Figures for Previous Year have been regrouped and/or rearranged, wherever considered necessary to conform to the current years classification.

19) Figures in the Balance Sheet, Profit & Loss Account and Cash Flow Statement have been expressed in Rs. Lacs with two decimals.

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