1. CORPORATE INFORMATION Ratnamani Metals & Tubes Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing of stainless steel pipes and tubes and carbon steel pipes at Kutch, Indrad and Chhatral in the state of Gujarat. The Company caters to both domestic and international markets, 2. BASIS OF ACCOUNTING The financial statements of the Company have been brpared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has brpared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Account) Rules 2014. The financial statements have been brpared on an accrual basis and under the historical cost convention. The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year, 2.1 SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES: a. USE OF ESTIMATES The brparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and / or liabilities in future periods. b. TANGIBLE FIXED ASSETS: Fixed assets are stated at cost, net of accumulated debrciation and accumulated impairment losses, if any, The cost comprises purchase price and borrowing costs if capitalization criteria are met, the cost of replacing part of the fixed assets and directly attributable cost of bringing the asset to its working condition for the intended use. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is debrciated separately, This applies mainly to components for machinery, When significant parts of fixed assets are required to be replaced at intervals, the Company recognizes such parts as individual assets with specific useful lives and debrciates them accordingly. Likewise, when a major overhauling is performed, its cost is recognized in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its brviously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of parts replaced are charged to the Statement of Profit and Loss for the period during which such expenses are incurred, The Company adjusts exchange differences arising on translation / settlement of long-term foreign currency monetary Items pertaining to the acquisition of a debrciable asset to the cost of the asset and debrciates the same over the remaining life of the asset, In accordance with MCA circular dated 09 August 2012, exchange differences adjusted to the cost of fixed assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a debrciable asset for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference. Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the Statement of Profit and Loss as and when the assets is derecognized. c. INTANGIBLE FIXED ASSETS Intangible Assets are carried at cost less accumulated amortisation and accumulated impairment, if any. Intangible assets are amortised on a straight-line basis over sixyears, d. DEbrCIATION AND AMORTISATION Debrciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives defined under Schedule II except in respect of following fixed assets: (i) The amount of Long Term Lease hold land: It is amortised in equal instalments during the last fifteen years of the residual lease period, (ii) Furnace and X-ray machines are debrciated at an annual rate of 20% to bring the debrciation rates in line with the useful life of assets as estimated by the Technical Team of the Company. (iii) The useful life of Wind Mills is estimated as 20 years based on sublease period of the land and the PPA/Wheeling Agreements entered into with the local authorities. e. INVESTMENTS Investments that are readily realisable and Intended to be held for not more than a year from the date on which investments are made are classified as current investments. All other investments are classified as non-current Investments, Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost, However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss. f. INVENTORIES Raw materials, work-in-process, finished goods, traded goods and stores and spares are valued at lower of cost and net realizable value after providing for obsolescence and other losses, wherever considered necessary. However, materials and other items held for use In the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Scrap is valued at net realisable value. Cost is determined on a Weighted Average method. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity, incurred in bringing them in their respective brsent location and condition. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business. g. REVENUE i) Revenue from operations is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations (gross) & Income from operations (gross) rebrsents the amounts receivable for goods and services sold including excise duty thereon. Export incentives and VAT / CST incentives in respect of Kutch Unit but excludes VAT / CST, trade discounts & other taxes, adjustments for late delivery charges and material returned / rejected. Interest income is recognized on time proportion basis taking into account the amounts outstanding and the rates applicable. Interest income is included under the head "other income" in the Statement of Profit and Loss. ii) The Company accounts for pro forma credits, refunds of duty of customs or excise, or refunds of sales tax in the year of admission of such claims by the concerned authorities. Benefits in respect of Export Licenses are recognised on application. Export benefits are accounted for as other operating income in the year of export based on eligibility and when there is no uncertainty on receiving the same. HI) Dividend is recognized when the Companys right to receive dividend is established by the Balance Sheet date, iv) Revenue from windmills is recognised on unit generation basis, h. EXCISE DUTY Excise duty is accounted on the basis of both, payment made in respect of goods cleared / Services provided, and provided on manufactured goods remaining in the inventory which is included as a part of valuation of finished goods and scrap, i. EMPLOYEE BENEFITS Retirement benefits in the form of provident fund and superannuation fund are defined contribution plans. The Company has no obligation, other than the contributions payable to provident fund and super-annuation fund. The Company recognises contribution payable to these funds as an expenditure, when an employee renders the related service. In respect of gratuity liability, the Company operates defined benefit plan. The costs of providing benefits under this plan are determined on the basis of actuarial valuation at each year-end. Actuarial valuation is carried out using the projected unit credit method. Based on the determined valuation, the Company recognizes the amount in full to the Statement of Profit and Loss account. Actuarial gain and loss Is recognised in full in the period in which they occur In the Statement of Profit and Loss, The liability in respect of unused leave entitlement of the employees as at the reporting date Is determined on the basis of an independent actuarial valuation carried out and the liability Is recognized in the Statement of Profit and Loss. The Company brsents the entire leave as a current liability in the Balance Sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Actuarial gain and loss is recognise in full in the period in which they occur in the Statement of Profit and Loss. ESOS: In respect of Employees Stock Options, the excess of fair price on the date of grant over the exercise price is recognised as deferred compensation cost amortised over the vesting period, j. INCOME TAXES Tax expenses comprise current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date, Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized. The Company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first. At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized, The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that It is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable Income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. k. FOREIGN CURRENCY TRANSACTIONS I) Foreign currency transactions are accounted at exchange rates brvailing on the date the transactions take place or that approximates the actual rate on the date of the transaction. All exchange differences arising in respect of foreign currency transactions are dealt with In statement of profit & loss except in respect of long term liabilities incurred for acquiring fixed assets, in which case such differences are adjusted in the carrying amount of the respective fixed assets and debrciated over the remaining useful life of the assets. ii) All monetary foreign currency assets and liabilities, if any, as at the Balance Sheet date are restated at the applicable exchange rates brvailing on the reporting date of financial statements. I. FOREIGN EXCHANGE CONTRACTS ENTERED INTO TO HEDGE FOREIGN CURRENCY RISK OF AN EXISTING ASSETS / LIABILITIES In respect of forward contracts, the brmium or discount is amortised over the period of forward contract and the proportionate brmium/discount for the period up to the reporting date of Balance Sheet is recognized in the Statement of Profit and Loss. The exchange difference measured by the exchange rate between the inception of the forward contract and reporting date of Balance Sheet is applied on foreign currency amount of the forward contract and exchange difference on such contracts, are recognized in the Statement of Profit and Loss in the period in which the exchange rates changes. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is also recognized as income or expense for the period, m. FINANCE COSTS Finance costs include interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowing. Finance costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost are charged to Statement of Profit and Loss. n. IMPAIRMENT OF ASSETS The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of debrciated historical cost, o. PROVISIONS A provision is recognised when an enterprise has a brsent obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each reporting date and adjusted to reflect the current best estimates. p. CONTINGENT LIABILITY A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a brsent obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements. A contingent asset is neither recognized not disclosed. q. SEGMENT REPORTING The Companys operating businesses are organised and managed separately according to the nature of products provided, with each segment rebrsenting a strategic business unit that offers different products and serves different markets. The analysis of geographical segment is based on the geographical location of the customers. The Company brpares its segment information in conformity with the accounting policies adopted for brparing and brsenting the financial statements of the Company as a whole. r. EARNING PER SHARE Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for issue of shares under Employee Stock Option Scheme-2006 that have changed the number of equity shares outstanding. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. s. CASH AND CASH EQUIVALENT Cash and Cash Equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. t. OPERATING LEASE Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased Item, are classified as operating leases, Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term, 2 Previous year figures have been regrouped / reclassified where necessary to conform to this year's classification. As per our report of even date For Mehta Lodha & Co. Chartered Accountants Firm Registration No: 106250W per PRAKASH D. SHAH Partner Membership No. 34363 For S R B C & Co. LLP Chartered Accountants Firm Registration No: 324982E per ARPIT K. PATEL Partner Membership No. 34032 For Ratnamani Metals & Tubes Limited R M. SANGHVI Chairman and Managing Director S. M. SANGHVI Whole Time Director DR. V. M. AGRAWAL Director NIDHI GADHECHA Director VIMAL KATTA Vice President (Finance] J. M. SANGHVI Whole Time Director D. C ANJARIA Director P. M. MEHTA Director RAJEEV MUNDRA Company Secretary Place: Ahmedabad Date : May 7, 2015 |