1. Merger of Manufacturing Division of Jindal Photo Limited
The Hon'ble High Court of Judicature at Allahabad and Bombay vide their Order dated 12th October, 2015 and 26th February, 2016 respectively sanctioned the scheme of arrangement ('the scheme') between Jindal Photo Limited (“Demerged Company”) and Jindal Poly Films Limited (“Resulting Company”) and their respective shareholders and creditors, pursuant to the provisions of section 391 to 394 and other provisions of the Companies Act, 1956 and/or Companies Act, 2013. The scheme became effective upon filing of certified copies of the Orders of the Hon'ble High Court of Judicature at Bombay on 31st March, 2016.
The scheme is effective from Appointed Date i.e. 1st April, 2014 inter alia provides for the demerger of the demerged undertaking as defined in part (III) of the scheme - Business of Manufacture, production, sale and distribution of photographic products of demerged company into the Resulting Company. Accordingly financial statements of the demerged entity has been incorporated for the year ended 31st March 2016 along with corresponding previous year ended 31st March 2015.
(a) Pursuant to the scheme of Arrangement between Jindal Photo Limited (Demerged Company) and Jindal Poly Films Limited (Resulting Company) and their respective shareholders and creditors, as a Consideration, Jindal Poly Films Limited have allotted 17,38,700 (seventeen lac thirty eight thousand seven hundred) Equity shares of Rs. 10 each fully paid up in the capital of the company on 30th May,2016 in the ratio of 10 fully Paid-up equity shares of Rs. 10 each of the Company for every 59 Equity shares of Jindal Photo Limited held by shareholders of Jindal Photo Limited on record date i.e. 13th May, 2016. Accordingly these shares are treated as outstanding as on reporting date and are included for the calculation of basic earnings per share for the year ended 31st March 2016 along with corresponding previous year ended 31st March 2015.
(b) The accounting of this Arrangement was done as per the scheme and the same has been given effect to in the financial statements as under:
i. The Resulting Company has recorded all assets and liabilities of the Demerged Undertaking vested in it pursuance to this scheme, at the respective book values thereof, as appearing in the books of account of the Demerged Company immediately before the appointed date.
ii. The Resulting Company has credited the aggregate face value of the New Equity shares of the Company issued by it to the members of the Demerged Company pursuant to this scheme to the share capital in books of accounts.
iii. The difference of the aggregate of face value equity shares allotted by the Company to the shareholders of the Demerged Undertaking, and the amount representing surplus of book value of assets over liabilities of the Demerged Undertaking has been recorded by the Resulting Company as Capital Reserve.
iv. Figures of demerged undertakings have been regrouped and/or rearranged wherever required to align with disclosure parameters of the Resulting Company.
Note : Pursuant to the scheme of Arrangement between Jindal Photo Limited (Demerged Company) and Jindal Poly Films Limited (Resulting Company), as approved by Hon'ble High Court of Judicature Mumbai vide order dated 26th February 2016, the Company has given impact in its books of accounts. Accordingly general inter unit balances arose earlier to approval of the scheme between Demerged Undertaking - M/s Jindal Photo Limited (Manufacturing Division) and Residual Undertaking - M/s Jindal Photo Limited (Investing Division) aggregating Rs 9,08,29,456 (Previous Year Rs 7,26,51,606) has been disclosed in short Term Loans and Advances (Refer Note 17.1). Being merely an accounting treatment for giving effect of the scheme, the above transaction and balance thereon is not disclosed in above related party disclosures.
2. Disclosure under Regulation 34(3) of “Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015”
Loans and advances outstanding at the year end and maximum amount outstanding during the year, as required to be disclosed under schedule V and Regulation 34(3) of “securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015” are as follows: *Comprehensive disclosure of investments as at 31st March 2016 has been made in Note 10 to the Financial statements, hence closing balance of other investments (Equity shares/Preference shares) having no movement during the year were not again disclosed in above statement.
**balance including interest
Note: Pursuant to the scheme of Arrangement between Jindal Photo Limited (Demerged Company) and Jindal Poly Films Limited (Resulting Company), as approved by Hon'ble High Court of Judicature Mumbai vide order dated 26th February 2016, the Company has given impact in its books of accounts. Accordingly general inter unit balances arose earlier to approval of the scheme between Demerged Undertaking - M/s Jindal Photo Limited (Manufacturing Division) and Residual Undertaking - M/s Jindal Photo Limited (Investing Division) aggregating Rs 9,08,29,456 (Previous Year Rs 7,26,51,606) has been disclosed in short Term Loans and Advances (Refer Note 17.1). Being merely an accounting treatment for giving effect of the scheme, the above transaction and balance thereon is not disclosed in above related party disclosures.
3. Segment Reporting
Pursuant to the scheme of arrangement for merger of manufacturing business of Jindal Photo Limited having different photographic products, the management has classified the business in two reportable segment, as defined in Accounting standard - 17 (segment Reporting) as follows :
- Plastic Films Business
- Photographic Division
4. Provision for Post-sales Client support and Warranties:
Provisions for post-sales client support and warranties on certain products and services relating to photographic business of the Company are made towards expected cost of meeting such obligations of rectification/replacement, based on the expected future cash outflows and computed on total sales made during the year, based on past experience. Provision for post-sales client support are expected to be utilized over a period of one year.
5. (a) The Administration of Union Territory of Dadra & Nager Haveli vide its Notification dated 31st December, 1999 granted exemption for sales tax to the Demerged Entity M/s Jindal Photo Limited (now being merged with the Company M/s Jindal Poly Films Limited) and in view of legal opinion received from experts and as per Ads-12 such benefit being in nature of capital receipt has been reduced from Gross sales and credited to Capital Reserve.
(b) Further financial statements for the financial years 2005-06 to 2010-11 of Demerged Entity M/s Jindal Photo Limited (now being merged with the Company M/s Jindal Poly Films Limited) were prepared considering such benefit as revenue receipt and income tax was provided and paid at normal rate for respective year. The assessment of financial year 2005-06 to 2010-11 for which assessment proceedings u/s 153A is in progress, entity has filed revised income tax computations for such financial years claiming benefit of Rs. 1,12,88,56,658 as exempted income and tax liability was revised as per provisions of section 115JB of Income Tax Act, 1961 (MAT) at Rs. 22,78,69,632. As the claim is for the years for which normal revised return could not be filed, the effect of such claim of benefit is not considered and necessary effective entries will be passed on finality of the assessment. Year wise detail is as under:
6. (a) A sum of Rs.13,92,18,077 (previous year Rs.13,11,88,659) being the difference between domestic and imported raw material prices prevailing at the year ended on 31st March 2016 on account of advance liceNSE s excess utilized for which exports are yet to be made, has been adjusted in the cost of raw material.
(b) Under the Package scheme of Incentive 2001/2007 approved by the Government of Maharashtra, the Company is entitled to industrial promotion subsidy to the extent of 100% of the fixed capital investment or to the extent of taxes paid to the state Government within a period of 7 years, whichever is lower. During the year, subsidy receivable under the above said scheme amounting to Rs 52,14,31,163 (previous year Rs. 51,57,72,707) has been added to Capital Reserve .
(c) The Export obligation undertaken by the company for import of capital equipments under EPCG scheme of the Central Government at the concessional rate of custom duty are in the opinion of the management expected to be fulfilled within their respective due dates/extended due date.
7. During the year, the Company had invested Rs. 39,29,00,000 in the Zero Percent redeemable preference share capital and Rs 249,00,00,000 in Zero Percent Optionally Convertible Preference shares M/s of Jindal India Powertech Limited (JIPL), a group company. JIPL is the holding Company of Jindal India Thermal Power Limited (the borrower).
8. (a) Certain old balances of sundry debtors and sundry creditors are subject to reconciliation and confirmation.
(b) sundry Debtors include Rs.53,23,605 (previous year Rs. 46,06,143) under litigation, against which legal cases are pending in various Courts for recovery. The same are considered good and realizable in the opinion of the management.
(c) In the opinion of the Board and to the best of their knowledge and belief, the realizable value of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance sheet.
9. (a) Advance receivable in cash or in kind includes Rs. 28,254,171 (Previous Year Rs. 28,254,171 ) being the amount of custom duty deposited against import of capital goods assessed under provisional assessments in earlier year.
(b) Non - Current Investment includes 6 shares of Jindal Films India Ltd (Previously known as Jindal Metal & Mining Ltd) of which the Company is beneficial owner are held by certain individuals in fiduciary capacity.
(c) Pursuant to the scheme of Arrangement (Refer Note 30), investment held by Demerged Undertaking (M/s Jindal Photo Limited) in equity shares of M/s Jindal Imaging Limited and M/s Jindal Photo Imaging Limited has been transferred to Resulting Company (M/s Jindal Poly Films Limited), accordingly these equity shares has been considered as Non-Current Investments of the Resulting Company, however issuance of these shares in the name of M/s Jindal Poly Films Limited is under process.
(d) stores & spares consumed and salaries & wages incurred during the year for repair and maintenance of plant & machinery and sheds & building, have been charged to the former accounts wherever separation is not ascertainable.
10. (a) Discontinued Operation
Company has discontinued the operation of Partially Oriented Yarn (POY) facility at Gulaothi, Uttar Pradesh and Pet film facility at Khanvel unit as it has been terminated through abandonment in earlier years as per Accounting standard - 24 (Discontinuing Operations) referred to in section 133 of the Companies Act 2013.
Following is extracts of financial information included in loss from discontinued operations for the Gulaothi and Khanvel unit:-
(b) since FY 2006-07, the company was in the process of disposal of its unused plant & machineries and store items at Gulaothi Unit (Discontinued Operation). During the year, a part of such unused plant and machineries was reported to have been removed inappropriately. The management is taking due actions for recovery and do not consider any impairment/ provision for loss, if any, on this account as the credit balance of parties and realizable value of remaining assets is likely to exceed the book value of assets.
(c) As per Accounting standard -28 “Impairment of Assets” referred to in section 133 of the Companies Act 2013, no further impairment loss has been considered by the management in assets of Gulaothi & Khanvel unit.
11. Exceptional items represents Loss of Rs. 1,58,31,145 (previous year Rs 2,98,35,055) being exchange differences on translation/settlement of long term foreign currency loans for acquiring fixed assets.
12. Information related to Micro Enterprises and small Enterprises, as defined in the Micro, small and Medium Enterprises Development Act, 2006 (MsME Development Act), are given below. The information given below have been determined to the extent such enterprises have been identified on the basis of information available with the Company:
13. During the year, the erstwhile associate M/s Rexor Holding sAs has been merged with its wholly owned subsidiary M/s Rexor sAs, with effect from 1st April 2015, sanctioned as per order dated 21st October 2015 by an Foreign Authority (Greffe du Tribunal de Commerce de Vienne) and accordingly post-merger the surviving entity M/s Rexor sAs has become the associate of M/s Jindal Poly Films Limited. Pursuant to the scheme of merger, shares of M/s Rexor Holding sAs have been cancelled and in consideration proportionate shares as per the determined ratio, has been allotted in the surviving entity M/s Rexor sAs comprising 11163 Equity shares at Face Value of Euro 3506 allotted to M/s Jindal Poly Films Limited.
14. The Company has pledged 4,88,76,000 equity shares of Rs 10/- each of M/s Global Nonwoven Limited a subsidiary company and mortgaged 26.54 acres land of the Company situated at Nasik Maharashtra (Land being Leased out to Global