1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of Preparation These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the Standards of Accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects with the accounting standards notified under Section 211 (3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013 (the 'Act). All assets and liabilities have been classified as current or non - current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non - current classification of assets and liabilities. B. Use of Estimates The brparation of financial statements in conformity with accounting principles generally accepted in India requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the Balance Sheet date, reported amount of revenues and expenses for the year and disclosure of contingent liabilities as of the Balance Sheet date. The estimates and assumptions used in the financial statements are based upon managements evaluation of relevant facts and circumstances as of the date of the financial statements. Actual results could differ from these estimates. C. Fixed Assets Fixed Assets are stated at cost of acquisition and inclusive of borrowing cost, where applicable, and adjustments for exchange differences referred to in Note 1(H) below, net of accumulated debrciation/amortisation and accumulated impairment losses, if any. Cost comprises cost of acquisition including non - refundable taxes/duties, freight and other incidental expenses related to acquisition and installation. Cost of software includes license fees and cost of implementation/system integration services, where applicable. Subsequent expenditures related to an item of fixed asset (tangible or intangible) are added to its book value only if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. Machinery spares which are irregular in use and associated with particular asset are treated as fixed assets. D. Debrciation and Amortisation Debrciation on tangible fixed assets is provided on straight - line basis over the estimated useful lives of the assets in accordance with Schedule II to the Act (Also refer Note 38). Leasehold land is amortised on straight - line basis over the primary lease period. Intangible assets (Computer Software) are amortised on a straight - line basis over a period of five years. E. Impairment Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. An impairment loss, if any, is recognised wherever the carrying amount of the fixed assets exceeds the recoverable amount i.e. the higher of the assets' net selling price and value in use. After impairment, debrciation is provided on the revised carrying amount of the fixed asset over its remaining useful life. F. Investments Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long - term investments. Long - term investments are carried at cost less write down for any diminution, other than temporary, in carrying value. Current investments are carried at lower of cost and fair value. G. Inventories Inventories are valued at lower of cost and net realisable value. The costs are ascertained under weighted average formula. The cost of finished goods and work - in - progress comprises raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. H. Foreign Currency Transactions as applicable under Accounting Standard 11 on 'The Effects of Changes in Foreign Exchange Rates' Transactions in foreign currency are recorded at exchange rates brvailing on the date of the transaction. At the year -end, monetary assets and liabilities denominated in foreign currencies are restated at the year - end exchange rates. The resultant exchange differences (other than relating to long -term foreign currency monetary items) arising from settlement of foreign currency transactions and from the year - end restatement are recognised in the Statement of Profit and Loss. Exchange differences arising on reporting of long - term foreign currency monetary items (i) relating to acquisition of debrciable capital assets is adjusted to the carrying amount of such assets (to be debrciated over the balance life of the related asset) and (ii) in other cases accumulated in a Foreign Currency Monetary Item Translation Difference Account' (to be amortised over the balance period of the related long - term monetary asset/liability Premium or discount arising at the inception of a forward exchange contract entered into to hedge an existing asset/ liability is amortised as expense or income over the life of the contract. I. Derivative Contracts In respect of derivative contracts (other than forward exchange contracts covered under Accounting Standard 11 on The Effects of Changes in Foreign Exchange Rates' ), gains/losses on settlement and mark - to - market loss, if any, on outstanding contracts as at the Balance Sheet date are recognised in the Statement of Profit and Loss and mark - to - market gain, if any, on outstanding contracts as at the Balance Sheet date is ignored. Refer Note 1(H) above for forward exchange contracts covered under Accounting Standard 11 on The Effects of Changes in Foreign Exchange Rates'. J. Revenue Revenue from sale of goods are recognised when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of contract. It includes excise duty but excludes value added tax/sales tax, trade discounts, returns, as applicable. Income from services rendered is recognised as the service is performed on proportionate completion method and is booked based on agreements/arrangements with the concerned parties. Export entitlements are recognised after completion of related exports on prudent basis. K. Construction Contracts Revenue in respect of construction contracts is recognised on the basis of percentage of completion method. The stage of completion is determined on the basis of completion of physical proportion of the contract work. Future expected loss, if any, is recognised as expenditure. L. Borrowing Costs Borrowing costs, if any, directly attributable to the acquisition and construction of qualifying assets (i.e., assets that necessarily take a substantial period of time to get ready for their intended use) are added to the cost up to the date when such assets are substantially ready for their intended use. Other borrowing costs are recognised as expense in the period in which these are incurred. M. Research & Development Expenditure Research costs are expensed in the period in which it is incurred. Expenditure on Development is expensed/capitalised in compliance with the provisions of the Accounting Standard 26 on Intangible Assets'. N. Employee Benefits a) Short - term Employee Benefits : The undiscounted amount of Short - term Employee Benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the service. b) Post Employment Benefit Plans : Contributions under Defined Contribution Plans payable in keeping with the related schemes are recognised as expenses for the period in which the employee has rendered the service. For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in full in the Statement of Profit and Loss for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight - line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of Plan Assets. Any asset resulting from this calculation is limited to the brsent value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. c) Other Long - term Employee Benefits (unfunded) : The cost of providing other long - term employee benefits is determined using Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognised immediately in the Statement of Profit and Loss for the period in which they occur. Other long -term employee benefit obligation recognised in the Balance Sheet rebrsents the brsent value of related obligation. O. Provisions and Contingent Liabilities Provisions are recognised when there is a brsent obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the brsent obligation as at the Balance Sheet date and are not discounted to its brsent value. A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non -occurrence of one or more uncertain future events not wholly within the control of the Company or a brsent obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. P. Taxation " Current tax is provided as the amount of tax payable in respect of taxable income for the year, measured using the applicable tax rules and laws. Deferred tax is provided on timing differences between taxable income and accounting income measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only if there is a virtual/ reasonable certainty, as applicable, in keeping with Accounting Standard 22 on 'Accounting for Taxes on Income' that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are reviewed for the appropriateness of their respective carrying amount at each Balance Sheet date. Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax in excess of MAT during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax in excess of MAT during the specified period. Q. Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight - line basis over the period of lease. R. Segment Reporting The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. The Company generally accounts for inter - segment sales and transfers at cost plus appropriate margin. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Corporate - Unallocated (Net)". 3. Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) [includes Rs. Nil (Previous Year - Rs. 21.53 Lakhs) relating to acquisition of intangible assets] 3,792.58 4,065.32 4. The Company had reviewed its tangible fixed assets as at 1st April, 2015 and identified certain significant components with different useful lives from the remaining parts of the asset in keeping with the provisions of Schedule II to the Companies Act, 2013. The debrciation has been computed for such components separately effective 1st April, 2015. As a result, the debrciation expense for the year ended 31st March, 2016 is higher and the profit before tax is lower by Rs. 648.71 Lakhs and the net book value aggregating Rs. 1,179.80 Lakhs (net of deferred tax Rs. 569.06 Lakhs) relating to assets, where the revised useful lives have expired by 31st March, 2015 has been adjusted against opening balance of retained earnings as on 1st April, 2015. The aforesaid revision of the useful lives will result in the following changes in the debrciation expense as compared to the original useful life of the assets 5. The Company has cancellable operating lease arrangements for certain accommodation. Terms of such lease include option for renewal on mutually agreed terms. Operating lease rentals for the year debited to the Statement of Profit and Loss amount to Rs. 129.26 Lakhs (Previous Year - Rs. 122.80 Lakhs). 6. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Honfale High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years). 7. Research and Development Expenditure of revenue nature of Rs. 12.58 Lakhs (Previous Year - Rs. 12.95 Lakhs). 8. Previous year's figures have been regrouped/rearranged, wherever necessary to conform to current year's classification. For PRICE WATERHOUSE Firm Registration Number - 301112E Chartered Accountants (Pinaki Chowdhury) Partner Membership No. 57572 S.W.Parnerkar Sr. Vice President-Finance B. Shiva Company Secretary M. B. Gadgil Executive Director K. K. Bangur Chairman Place : Kolkata date : - 12th May, 2016
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