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Notes to Accounts of Ratnamani Metals & Tubes Ltd.

Mar 31, 2015

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 prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared 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 prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year,

3.1 Other expenses includes Rs.157.46 Lacs (RY. Rs. Nil), spent towards various activities relating to Corporate Social Responsibility as prescribed under Section 135 of the Companies Act, 2013,

4 CONTINGENT LIABILITIES

a) Bills discounted and not matured 10,444.10 3,387.30

b) ESI Liability (excluding interest leviable, if any) 270.00 241.81

c) Consolidated Tax payable to GIDC, Chhatral (Note-1) 11.14 8.57

d) Disputed Statutory Claims / levies for which the Company has preferred appeal in respect of (excluding Interest leviable, if any):

- Income tax 288.76 -

- Excise Duty (Note-2) 3,315.13 3,310.06

- Custom Duty - 8,474.79

Note-1 Consolidated tax payable to GIDC is demanded byGIDC, Ahmedabad modified under circular dated 9/7/2010 for levying and recovering "infrastructure upgradation fund" from the Company. The amount comprises of the per square meter charges towards infrastructure upgradation as well as interest and penally thereupon. The Company has filed an appeal against the demand in High Court. The management does not expect these claims to succeed. Accordingly, no provision for the contingent liability has been recognized in the financial statements,

Note-2 Excise duty demand comprise various demands from the Excise Authorities for payment of Rs. 3,315.13 lacs (RY. Rs. 3,310.06 Lacs). The Company has filed apeals against these demands. The Company has been advised by its legal counsel that the demand is likely to be deleted and accordingly no provision for liability has been recognized In the financial statements.

5 CAPITAL COMMITMENT

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided forRs. 1,303.47 Lacs (RY. Rs.2,292.03 Lacs).

6 The Company has incurred premium expenses of Rs. 100.99 Lacs (RY. Rs. 10.84 Lacs) on Key Man Insurance Policy and term plan policy of Chairman and Managing director and Whole-time directors, which is included in Insurance Expenses.

The Employees'' Gratuity Fund Scheme managed by a Trust (Life Insurance Corporation of India) is a defined benefit plan. In assessing the Company''s post retirement liabilities, the Company monitors mortality assumption and uses up-to-date mortality table. The base being the Indian Assured Lives Mortality (2006-08) ultimate tables, The obligation for leave encashment is recognised in the same manner as gratuity.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market,

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation Is to be settled. There has been significant change In expected rate of return on assets due to change in the market scenario.

7 SEGMENT INFORMATION

The Company is engaged in the business of Steel Tubes and Pipes and generation of power by Windmills. In accordance with the requirements of Accounting Standard 17, ''Segment Reporting'', notified under the Companies (Accounting Standards) Rules, 2006, the Company''s business segments are considered primary reportable business segments,

Segments have been identified in line with Accounting Standard on Segment Reporting (AS-17) taking into account the nature of product and differential risk and returns.

8 RELATED PARTY DISCLOSURES

As required by Accounting Standard - AS 18 "Related Parties Disclosures" the disclosure of transactions with related parties are given below:

A Relationships

(a) Subsidiary Company

- Ratnamani Inc., USA

(b) Key Management Personnel

- Mr. Prakash M. Sanghvi - Chairman and Managing Director

- Mr. Jayanti M. Sanghvi - Whole-time Director

- Mr. Shanti M. Sanghvi - Whole-time Director

(c) Relatives of key management personnel

- Mr. Manoj P. Sanghvi ( Son of Mr. Prakash M. Sanghvi ]

- Mr. Prashant J. Sanghvi ( Son of Mr. Jayanti M. Sanghvi ]

- Mr. Nilesh R Sanghvi ( Son of Mr. Prakash M. Sanghvi)

- Mr. Jigar R Sanghvi (Son of Mr. Prakash M. Sanghvi)

- Mr. Yash S. Sanghvi (Son of Mr. Shanti M. Sanghvi)

(d) Enterprises owned or significantly influenced by key management personnel or their relatives

- Ratnamani Food Products Private Ltd,

- Ratnamani Marketing Private Ltd.

- Ratnamani Healthcare Private Ltd.

9 Previous year figures have been regrouped / reclassified where necessary to conform to this year''s classification.


Mar 31, 2014

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 prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply In all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 as adopted consistently by the Company. The financial statements have been prepared on an accrual basis and under the historical cost convention,

(Rs. In Lacs)

Note Particulars Year ended on Year ended on No 31-03-2014 31-03-2013

3 CONTINGENT LIABILITIES

a) Bills discounted and not matured 3,387.30 159.02

b) ESI Liability (excluding Interest leviable. If any) 241.81 218.17

c) Consolidated Tax payable to GDC, Chhatral (Note-1) 8.57 6.33

d) Disputed Statutory Claims / levies for which the Company has preferred appeal in respect of (excluding interest leviable, if any):

- Income tax - 77.84

- Excise Duty (Note-2) 3,310.06 1,647.15

- Custom Duty (Note-3) 8,474.79 8,474.79



Note-1 Consolidated tax payable to GIDC is demanded by GIDC, Ahmedabad modified under circular dated 09-07-2010 for levying and recovering infrastructure upgradatlon fund from the Company. The amount comprises of the per square meter charges towards infrastructure updradation as well as interest and penalty thereupon. The Company has filed an appeal against the demand in High Court. The management does not expect these claims to succeed. Accordingly, no provision for the contingent liability has been recognized in the financial statements.

Note-2 Excise duty demand comprise various demands from the Excise Authorities for payment of Rs. 3,310.06 lacs (RY. Rs. 1647.15 lacs). The Company has filed appeals against these demands. The company has been advised by its legal counsel that the demand is likely to be either deleted or substantially reduced and accordingly no provision for liability has been recognized in the financial statements.

Note-3 Custom duty demand comprise demand from the Indian Customs Authority for payment of additional tax of Rs. 8,474.79 lacs (RY. Rs. 8,474.79 lacs), for the period April 2007 to February 2012. The tax demands are mainly on account of denial of the benefit of the advance licenses and of the exemption contained in Notification No.93/2004 dated 10/09/2004 used for import of inputs. The matter is pending before the Central Excise and Service tax Appellate Tribunal, the management believes that the demand is likely to be either deleted or substantially reduced and accordingly no provision for liability has been recognized in the financial statements.

4 CAPITAL COMMITMENT

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided forRs. 2,292.03 Lacs (RYRs. 5,913.37 Lacs).

5 The Company has paid premium of Rs. 10.84 Lacs (RY. Rs. 10.84 Lacs) on Key Man Insurance Policy of Chairman and Managing director and Whole-time directors, which is included in Insurance Expenses,

The Employees'' Gratuity Fund Scheme managed by a Trust (Life Insurance Corporation of India) is a defined benefit plan. In assessing the Company''s post retirement liabilities, the Company monitors mortality assumption and uses up-to-date mortality table. The base being the LIC 1994-96 ultimate tables. The obligation for leave encashment is recognised in the same manner as gratuity,

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market,

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.

6. EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company provides share-based payment schemes to its employees. During the year ended 31 st March, 2014, an Employee Stock Option Scheme (ESOS) was in existence. The relevant details of the scheme and the grant are as below:

During the financial year 2005-06 , the board of directors of the Company approved the Equity Settled ESOS Scheme 2006 (Scheme 2006) for issue of stock options to the permanent employees and independent directors of the company. Scheme 2006 was approved at the Extra Ordinary General Meeting by the Members of the Company held on 6th May, 2006. According to the Scheme 2006, the employees were selected by the compensation committee, subject to satisfaction of the prescribed vesting conditions. The contractual life (comprising the vesting period and the exercise period) of options granted is 8 years (Original exercise period was 5 years which was further extended for a period of 3 years in the Annual General Meeting of the company held as on 18.08.2011). The Company has used Intrinsic value'' method as defined in SEBI guidelines. The other relevant terms of the grant are as below:

The price of Rs. 59.40 per equity share was fixed for exercise of options by employees.

The weighted average remaining contractual life for the stock options outstanding is seven months (FY. 19 months).

The shares were exercised on 02.12.2013. The weighted average share price at the date of exercise is^ Rs. 28.94 (FYRs. Nil) per share.

Amount under employee stock options represents, the difference between the market price of the share on the date of grant of options and the exercise price of the options on outstanding options and will be transferred to securities premium on exercise of the options.

7. SEGMENT INFORMATION

The Company Is engaged in the business of Steel Tubes and Pipes and generation of power by Windmills. In accordance with the requirements of Accounting Standard 17, "Segment Reporting'', notified under the Companies (Accounting Standards) Rules, 2006, the Company''s business segments are considered primary reportable business segments,

Segments have been Identified in line with Accounting Standard on Segment Reporting (AS-17) taking Into account the nature of product and differential risk and returns.

8. RELATED PARTY DISCLOSURES

As required by Accounting Standard - AS 18 "Related Parties Disclosures" notified under the Companies (Accounting Standards) Rules, 2006, the details are as follows:

A. Relationships

(a) Key Management Personnel

- Mr. Prakash M. Sanghvl - Chairman and Managing Director

- Mr. Jayanti M. Sanghvi -Whole-time Director

- Mr. Shanti M. Sanghvi-Whole-time Director

(b) Relatives of key management personnel

- Mr. Manoj R Sanghvi (Son of Mr. Prakash M. Sanghvi)

- Mr. Prashant J. Sanghvi (Son of Mr. Jayanti M. Sanghvi)

- Mr. Nilesh R Sanghvi (Son of Mr. Prakash M. Sanghvi)

- Mr. Jigar R Sanghvi (Son of Mr. Prakash M. Sanghvi ]

(c) Enterprises owned or significantly influenced by key management personnel or their relatives

- Ratnamani Food Products Private Ltd,

- Ratnamani Marketing Private Ltd.

- Ratnamani Healthcare Private Ltd.

9. Earnings In Foreign Exchange: ExportatF.O.B.valueRs.31,120.51 Lacs(RY.Rs.34,376.26Lacs).

10. Expenditure in Foreign Currency for Traveling and other mattersRs. 1,141.33 Lacs (R Y Rs. 1,729.4b Lacs) (on accrual basis).

11. Previous year figures have been regrouped / reclassified where necessary to conform to this year''s classification.


Mar 31, 2013

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. The Company also operates a mobile plant at Koradi (Maharashtra) as on year end.

2. BASIS OF ACCOUNTING

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 as adopted consistently by the Company. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

* The Custom Department has raised a demand of Rs. 8,474.79 Lacs based on its interpretation of Import license condition and resultanat breach of the same by the company. The company is in the process of filing an appeal before the appellate tribunal. The Company has taken an external opinion in the matter based on which the management is of the view that no liabilities shall arise on the Company.

3. CAPITAL COMMITMENT

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 5,913.37 Lacs (P.Y. Rs. 6,869.28 Lacs).

4. The Company has paid premium of Rs. 10.84 Lacs (P.Y. Rs. 16.21 Lacs) on Key Man Insurance Policy of Chairman and Managing Director and Whole-time Directors, which is included in Insurance Expenses,

5. EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company provides share-based payment schemes to its employees. During the year ended 31st March, 2013, an Employee Stock Option Scheme (ESOS) was in existence. The relevant details of the scheme and the grant are as below:

During the financial year 2005-06, the board of directors of the Company approved the Equity Settled ESOS Scheme 2006 (Scheme 2006) for issue of stock options to the permanent employees and independent directors of the company. Scheme 2006 was approved at the Extra Ordinary General Meeting by the Members of the company held on 6th May, 2006. According to the Scheme 2006, the employees were selected by the compensation committee, subject to satisfaction of the prescribed vesting conditions. The contractual life (comprising the vesting period and the exercise period) of options granted is 8 years (Original exercise period was 5 years which was further extended for a period of 3 years in the Annual General Meeting of the company held as on 18.08.2011). The Company has used ''Intrinsic value'' method as defined in SEBI guidelines. The other relevant terms of the grant are as below:

6. SEGMENT INFORMATION

The Company is engaged in the business of Steel Tubes and Pipes and generation of power by Windmills. In accordance with the requirements of Accounting Standard 17, ''Segment Reporting'', notified under the Companies (Accounting Standards) Rules, 2006, the Company''s business segments are considered primary reportable business segments.Segments have been identified in line with Accounting Standard on Segment Reporting (AS-17) taking into account the nature of product and differential risk and returns.

7. RELATED PARTY DISCLOSURES

As required by Accounting Standard - AS 18 "Related Parties Disclosures" notified under the Companies (Accounting Standards) Rules, 2006, the details are as follows:

A. Relationships

(a) Key Management Personnel

- Mr. Prakash M. Sanghvi - Chairman and Managing Director

- Mr. Jayanti M. Sanghvi - Whole-time Director

- Mr. Shanti M. Sanghvi - Whole-time Director

(b) Relatives of key management personnel

- Mr. Manoj P. Sanghvi (Son of Mr. Prakash M. Sanghvi)

- Mr. Prashant J. Sanghvi (Son of Mr. Jayanti M. Sanghvi)

- Mr. Nilesh P. Sanghvi (Son of Mr. Prakash M. Sanghvi)

- Mr. Jigar P. Sanghvi (Son of Mr. Prakash M. Sanghvi)

(c) Enterprises owned or significantly influenced by key management personnel or their relatives

- Ratnamani Food Products Private Ltd.

- Ratnamani Marketing Private Ltd.

- Ratnamani Healthcare Private Ltd.

8. Earnings in Foreign Exchange: Export at F.O.B. value Rs. 34,376.26 Lacs (P.Y. Rs. 28,858.70 Lacs).

9. Previous year figures have been regrouped/reclassified where necessary to conform to this year''s classification.


Mar 31, 2010

1. Contingent Liabilities as on 31st March, 2010 in respect of :-

(Rs. in Lacs)

Sr. Particulars Current Year Previous Year

a) Guarantees / Counter guarantees issued (including Letters of Credit) 15,083.63 10,128.38

b) Bills discounted and not matured 848.65 209.06

c) In respect of ESI Liability 154.58 138.85

d) In respect of Consolidated Tax payable to GIDC, Chhatral - 20.39 33.74 against total demand of Rs. 33,73,679 for the period 2002-03 till 2008-09 against which the Company is contesting the claim in High Court of Gujarat. Against this claim the Company has paid under protest Rs. 17,87,354 pursuant to the Court order. The Balance amount of Rs 15,86,325 and tax for the year 2009-10 on similar lines of Rs 4,53,667 has been treated as contingent liability.

e) During the year 2007-08, there were proceedings under 1478.90 -- Section 11A of the Central Excise Act, 1944 and rules framed there under. In pursuance of this, the Company has paid Rs. 200 Lacs under protest. Now the Company has been served Show Cause Notices, involving Rs. 1,678.90 Lacs in aggregate, excluding interest and penalties, if any. The Company is in process of replying to the Show Cause Notices, and pending the outcome thereof, no liability has been provided in the books.

f) Disputed Statutory Claims/levies for which the Company has preferred appeal in respect of (excluding interest leviable if any):

-Income tax 21.21 20.93

-Excise Duty 1456.12 388.67

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 1,577.87 Lacs (P.Y. Rs. 2,141.20 Lacs).

3. Loans and advances include amount due from an officer of the Company Rs. NIL (P.Y.Rs. 1.50 Lacs). The maximum amount outstanding at any time during the year Rs. 1.50 Lacs (P.Y. Rs.1.50 Lacs).

4. The Company has paid premium of Rs. 31.69 Lacs (P.Y. Rs. 42.25 Lacs) on Key Man Insurance Policy on the life of Directors, which is included in Insurance Expenses.

5. By virtue of the option granted by notification no. 225 (E) dated 31st March, 2009 issued by the Ministry of Corporate Affairs relating to limited relaxation in the provision of "Accounting Standard-11" in respect of foreign Exchange differences on foreign currency loans, the Company has credited Rs. 1437.02 Lacs to the carrying cost of assets on account of Foreign Exchange difference for the year 2009-10 (P.Y. debited Rs. 1869.61 Lacs). The unamortised Foreign Exchange Difference is credit Rs.64.64 Lacs (P.Y debit Rs.1372.38 Lacs) at the year end.

6. a) In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realised in the ordinary course of the business and provisions for all known liabilities are adequate. The accounts of sundry creditors, loans and advances and sundry debtors are subject to confirmation and necessary adjustment, if any, will be made on their reconciliation and / or settlement.

b) The amount of sundry debtors is net of Bills discounted of Rs. 848.65 Lacs (P.Y. Rs. 209.06 Lacs) with bankers and therefore the same is not shown as liabilities.

7. The Company is engaged in the business of Steel Tubes and Pipes and generation of power by Windmills. In accordance with the requirements of Accounting Standard 17, Segment Reporting, issued by the Institute of Chartered Accountants of India, companys business segments are considered primary reportable business segments.

Generation and sale of power from seven wind milts is treated as a separate Primary Reportable Segment. Segments have been identified in line with Accounting Standard on Segment Reporting (AS-17) taking into account the nature of product and differential risk and return.

8. As required by Accounting Standard - AS 18 "Related Parties Disclosures issued by The Institute of Chartered Accountants of India, the details are as follows ;

A Relationships

(a) Key Management Personnel

- Mr. Prakash M. Sanghvi - Managing Director

- Mr. Jayanti M. Sanghvi - Whole time Director

- Mr. Shanti M. Sanghvi - Whole time Director

(b) Relatives of Directors

- Mr. Manoj P. Sanghvi - Business Head - CS Pipes

- Mr. Prashant J. Sanghvi - Head, Marketing - SS Pipes

- Mr. Nilesh P. Sanghvi - Executive Commercial

(c) Enterprises over which any person described in (a) or (b) above is able to exercise significant influence

- Ratnamani Food Products Private Ltd.

- Ratnamani Marketing Private Ltd.

9. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

10. Additional information pursuant to the provisions of para 3 & 4 (c), (d) of part II of Schedule VI to the Companies Act.1956 to the extent applicable to the Company and as certified by the Management and relied upon by the Auditors :

A. Licensed & Installed Capacities and Production

a) Licensed Capacities N A.

11. Deferred Tax Liability : Difference between books and income tax - mainly due to depreciation Rs. 5,809.40 Lacs ( P.Y. Rs. 5,355.46 Lacs)

12. Derivative contracts entered into by the Company and outstanding as on 31st March, 2010.

For Hedging Currency and Interest Rate Related Risks :

Nominal amounts of derivative contracts entered into by the Company and outstanding as at 31st March, 2010 amount to Rs. 6,394.48 Lacs (P.Y. Rs. 24,97273 Lacs).

13. Corresponding figures of the previous year have been regrouped and / or re-arranged, wherever necessary.

 
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