i. Basis of Preparation
During the year ended 31st March 2012, the Revised Schedule VI notified
under the Companies Act, 1956, has become applicable to the Company,
for presentation of its financial statements. The adoption of Revised
Schedule VI does not impact recognition and measurement principles
followed for preparation of financial statements. However, it has
significant impact on the presentation and disclosures made in the
ii. Recognition of Income and Expenditure
All revenues and expenditures are accounted for on accrual basis except
wherever stated otherwise.
Sales, other than export sales, are inclusive of Excise Duty and shown
net of returns and discounts.
The Company is engaged in the business of manufacturing & sales of
various types of films of various dimensions and grades. As per the
Company''s usual policy, the low graded/surplus stock of films are sold
at special discounted prices and such discounts are adjusted in unit
iv. Tangible Assets
Tangible Assets are stated at cost less depreciation.
Depreciation on fixed assets has been calculated on Straight Line
method on pro-rata basis at the rates specified in Schedule-XIV of the
Companies Act, 1956. However, in case of plant and machineries where
ever applicable, higher depreciation rates are charged based upon
residual useful life.
Current Investments are valued at acquisition cost or market value
whichever is lower. Non- Current investments(Long Term) are valued at
acquisition cost. Diminution in value of Non-Current investment is
provided only if such a diminution is other than temporary in the
opinion of the management
Items of inventories are measured at lower of cost and net realisable
value after providing for obsolescence ,if any. Cost of inventories
comprises of cost of purchase, cost of conversion and other costs
including manufacturing overheads incurred in bringing them to their
respective present location and condition. Cost of raw materials is
determined on FIFO basis , cost of process chemicals, stores, packing
materials are determined on weighted average basis. Non usable wastes
.are valued at net realizable value.
viii. Excise Duty
Excise duty is accounted for and included in the closing stock
valuation of finished goods.
ix. Foreign Currency Transactions
Exchange difference arising on repayment of foreign currency
liabilities taken for the purpose of acquiring fixed assets, which are
carried in terms of historical cost, are recognized as income or
expenses for the year as the case may be.
Exchange difference arising due to reinstatement of outstanding foreign
currency loans taken for acquiring the fixed assets, by applying the
closing rate of such foreign currency or the rate as per forward
exchange contract if any, are recognized as income or expenses for the
year as the case may be.
Exchange difference arising on foreign currency transactions other than
those relating to liabilities incurred for the purpose of acquiring
fixed assets, are recognised as income or expenses for the year as the
case may be. Any profit or loss arising on cancellation or renewal of a
forward exchange contract in those cases is also recognised as income
or expense for the year. All current assets and current liabilities in
any foreign currency outstanding at the end of the year are translated
by applying the closing rate or the rate as per forward exchange
contract, if any.
x. Export Benefits
Export incentives in the form of Duty Entitlement Passbook Scheme
(DEPB) are accounted for on accrual basis and is credited to the raw
material cost. Duty Draw Back benefit is also accounted for on accrual
basis and treated as income from operations.
Advance Licenses obtained against actual export made are being
accounted on accrual basis based upon difference between domestic vs.
imported raw material prices prevailing at the end of the period and is
adjusted to raw material cost.
xi. Employee Benefits
i. Short term Employee Benefits
All employee benefits payable only within twelve months of rendering
the service are classified as short term employee benefits. Benefits
such as salaries, wages etc. and the expected cost of bonus, exgratia,
incentives are recognized in the period during which the employee
renders the related service.
ii. Post employment Benefits
(a) Defined Contribution Plans
State Government Provident Fund Scheme is a defined contribution plan.
The contribution paid/payable under the scheme is recognized in the
profit & loss account during the period which the employee renders the
(b) Defined Benefit Plans
The employee Gratuity Fund Scheme managed by a trust is a defined
benefit plan. The present value of obligation under such defined
benefit plan is determined based on actuarial valuation under the
projected unit credit method which recognizes each period of service as
giving rise to additional unit of employees benefits entitlement and
measures each unit separately to build up the final obligation.
The obligation is measured at the present value of future cash flows.
The discount rates used for determining the present value of the
obligation under defined benefit plans is based on the market yields on
government securities as at balance sheet date, having maturity periods
approximated to the returns of related obligations.
Actuarial gains and losses are recognized immediately in the profit &
In case of funded plans the fair value of the planned assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation on net basis.
(c) The obligation for leave encashment is provided for and paid on
xii. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition of
assets are being capitalized as part of the cost of that asset up to
the date of such asset is ready for its intended use. All other
borrowing costs are charged to revenue in the period when they are
a) Current Year Charge
Provision for Income-tax is ascertained on the basis of assessable
profits computed in accordance with the provisions of the Income-tax
b) Deferred Tax
The company provides for deferred tax using the liability method, based
on the tax effect of timing difference resulting from the recognition
of items in the financial statements and in estimating its current
income tax provision.
xiv. Earnings Per Share
Earning per share is calculated by dividing the net profit for the year
attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year.
xv. Miscellaneous Expenditure
Preliminary expenditure/ share issue expenses are being written off
over a period of five years.
xvi. Expenses during construction period
Expenses incurred during construction period are capitalised as part of
the cost of that asset up to the date of such asset is ready for its
intended use, except where some expenditure paid during subsequent year
pertaining to already installed Asset.
xvii. Impairment of Assets
An Asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. Impairment Loss is charged to Profit & Loss A/c
in the year in which impairment is identified.
xviii. Income from investments/Deposit
Income from investments is credited to revenue in the year in which it
accrues. Income is stated in full with the tax thereon being accounted
for Under Income tax deducted at source. Dividend income when the
owner''s right to receive its investments payment in shares established.
xix. Contingent Liability
Contingent Liabilities, if material, are disclosed by way of notes. 5
Buyback -I Pursuant to the approval of the Board of Directors of the
Company, for buyback of equity shares U/s 77A of the Companies Act,
1956 less then 10% of Paid up capital and free reserve, during the
financial year 2011-12 Company has bought back 3,020,421 equity shares
and extinguished the same.A total of 3,020,421 equity shares buyback
and extinguished during the year ended 31st March 2012 through open
market for an aggregate amount of Rs. 528,148,502 by utilizing the
security premium and general reserve to the extent of Rs. 497,944,292
and Rs. 30,204,210 respectively. The Capital redemption reserve has
been credited out of general reserve for Rs 30,204,210 being the
nominal value of the share bought back U/s. 77A of he Companies act,