Mar 31, 2016
These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance. In all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under Section 133 and the other relevant provisions of the Companies Act, 2013.
All the assets and liabilities have been classified as current or noncurrent as per the Companyâs normal operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be less than twelve months.
A. Fixed Assets
Fixed Assets are stated at cost of acquisition and installation. The cost comprises Freight, Taxes and related incidental expenses less Modvat Credit.
The Company has erected factory building sheds and installed plant and machinery on lease hold land. The company had incurred some developmental expenditure which was earlier in CWIP on factory building, plant and on lease hold land which increase the future benefits from the existing assets beyond its previously assessed standard of performance i.e. increase in capacity, modernization and up gradation.
B. Lease
Assets acquired as under leases, where a significant portion of the risk and rewards of ownership are retained by the less or are classified as operating leases, lease rentals are charged to the statement of profit and loss over the lease terms.
C. Method of Depreciation and Amortization
The Company has not carried out detailed assessment of the useful life and hence not adjusted depreciation charge accordingly as per the notification to Schedule II of the Companies Act, 2013.
D. Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified and confirmed as impaired.
E. Foreign Currency Transactions
The Company is exposed to Currency Fluctuations on Foreign Currency transactions. With a view to minimize the volatility arising from fluctuations in the currency rates, the company follows established risk management policies including the use of exchange forward contracts and other derivative instruments.
Foreign currency transactions are recorded at the exchange rate prevailing on the date of such transactions. Monetary Assets and Liabilities in Foreign Currency as at the Balance Sheet. Gains and losses arising on account of difference in foreign exchange rates on settlement / translation of Monetary Assets and Liabilities are recognized in the Profit and Loss Account.
In respect of forward contracts assigned to the Foreign Currency assets as at the balance sheet date, the proportionate premium/ discount for the period up to the date of balance sheet is recognized in the profit and loss account. The exchange difference measured by the change rate between the inception of forward contract and date of balance sheet is applied on foreign currency amount of the forward contract and is recognized in the profit and loss account.
All loans and deferred credits repayable in foreign currency and outstanding at the close of the year are expressed in Indian currency at the appropriate rate of exchange prevailing on the date of Balance Sheet.
Balances in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of the year, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet. Resultant gain or loss is accounted during the year.
F. Investments
Investments are classified into Current and Long-term investments. Current Investments are stated at lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of Long-term investments. However, fixed income long term securities are stated at cost, less amortization of premium/ discount and provision for diminution to recognize a decline other than temporary.
G. Valuation of Inventories
The Raw Materials, Stores and Spare Parts are valued at cost, which is arrived on FIFO basis. Work in progress, Semi Finished Goods and Finished Goods are valued at cost. Cost of Inventories comprises of all costs of purchase (other than refundable duties and taxes), costs of conversion & other costs incurred in bringing the inventories to their present condition and location. Costs of Raw Materials, Packing Materials and Stores and Spares are determined by the average cost method. Cost of Work in Progress and Finished Goods inventories are determined by the absorption costing method. Obsolete, defective, slow moving and unserviceable inventories are duly provided for.
H. Revenue Recognition / Income
Revenue Income is recognized on accrual basis except where mentioned otherwise, in particular:
Sales revenue is recognized when it is earned and no significant uncertainty exist as to its realization or collection. Sales are net of sales return and trade discounts. Rebate, claims and discounts are accounted for as and when determined. Deductions made have been reduced from the Sales where found necessary.
Export sales are accounted on the basis of acceptance by the customers and on the basis of export bill of lading.
Export sales are accounted as per the prevailing exchange rate on the date of transaction.
Revenue from services is recognized on rendering of services.
The pipe coating income is recognized after inspection, approval by customers and after dispatch.
Interest Income is taken on accrual basis and it is netted off against Interest Payment during the year.
Dividend income on investments are accounted for when the right to receive the payment is established.
Expenditure is accounted for on accrual basis and provisions are made for all known liabilities.
I. Excise Duty /Service Tax and Sales Tax/Value Added Taxes
Excise duty/Service tax is accounted on the basis of both, payments made in respect of goods cleared/services provided as also provision made for goods lying in bonded warehouses. Sales tax/Value added tax paid is charged to Profit and Loss account.
J. Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
Post-employment benefits:
a. Defined contribution plans
Defined contribution plans are Provident Fund scheme, Employee State Insurance Scheme and Government Administered Pension Fund Scheme for all employees and superannuation scheme for eligible employees. The Companyâs contribution to Defined Contribution Plans is recognized in the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards Employee Provident Fund to the respective Regional Provident Fund Authority.
b. Defined Benefit Gratuity Plan
The company operates a defined benefit Gratuity Plan for employees. The Company contributes the same to LIC towards meeting the Gratuity obligations
c. Other long term employee benefits
Entitlements to annual leave and sick leave are recognized when they accrue to employees. Sick leave can only be availed while annual leave can either be availed or encased subject to a restriction on the maximum number of accumulations of leave. The Company determines the liability for such accumulated leaves using the Projected Accrued Benefit method with actuarial valuations being carried out at each Balance Sheet date.
K. Borrowing Cost
Interest & other borrowing costs on specific borrowings relatable to the qualifying assets are capitalized. Other interests and borrowing costs are charged to Revenue.
L. Research and Development
Revenue Expenditure is charged to Profit & Loss Account and Capital Expenditure is added to the cost of Fixed Assets in the year when it is incurred.
M. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when there is a present obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligations and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the yearend date. These are reviewed at each year end date and adjusted to reflect the best current estimate.
Contingent liabilities are not recognized but disclosed in financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.
N. Method of Accounting
The Accounts have been prepared to comply in all material aspects with applicable principles in India and the Accounting Standards notified under the provisions of the Companies Act, 2013.
O. Treatment of expenditure during construction period
Expenditure in the case of new units and substantial expansion of existing units during the construction period is included in the work in progress and the same is allotted to the respective Fixed Assets on the completion of the construction.
P. Cash Flow Statement
The Cash Flow statement is prepared by the Indirect Method set out in Accounting Standard -3 on Cash Flow Statement and presents Cash Flows by Operating, Investing and financing activities of the Company. Cash and cash equivalent presented in the Cash Flow Statement consists of Cash in Hand and demand deposits with banks as on the Balance sheet date.
Q. Management Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and the differences between actual results and estimates are recognized in the periods in which the results are known / materialized.
R. Accounting for Taxes on Income
Income Taxes are accounted for in accordance with Accounting Standard 22 on Accounting for taxes on income. Income taxes comprise both current and deferred tax.
Mar 31, 2015
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance. In all material
aspects, with the applicable accounting principles in India, the
applicable accounting standard notified under section 133 and the other
relevant provisions of the Companies Act, 2013
All the 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 Schedule III of the Companies Act 2013. Based on the nature
of products and the time between the acquisition of assets for
processing and their realization in cash and cash equivalent, the
Company has ascertained its operating cycle to be less than twelve
months.
A. Method of Accounting
The Accounts have been prepared to comply in all material aspects with
applicable principles in India and the Accounting Standards issued by
the Institute of Chartered Accountants of India and the relevant
provisions of the Companies Act 2013
B. Valuation of Inventories
The Raw Materials, Stores and Spare Parts are valued at cost , which is
arrived on FIFO basis. Work in progress, Semi Finished Goods and
Finished Goods are valued at cost or at the net realisable value,
whichever is lower. Cost of Inventories comprises of all costs of
purchase (other than refundable duties and taxes), costs of conversion
& other costs incurred in bringing the inventories to their present
condition and location. Costs of Raw Materials, Packing Materials and
Stores and Spares are determined by the average cost method. Cost of
Work in Progress and Finished Goods inventories are determined by the
absorption costing method. Obsolete, defective, slow moving and
unserviceable inventories are duly provided for.
C. Method of Depreciation and Amortisation
Depreciation is provided from the date the assets have been installed
and put to use on written down value method at the rates and in the
manner prescribed by schedule XIV of the Companies Act, 1956. Lease
hold land is being amortised over the period of lease. Depreciation on
additions to assets or on sale - discardment of assets , is calculated
on pro-rata from the month of such addition or upto the month of such
sale/discardment , as the case may be.
D. Research and Development
Revenue Expenditure is charged to Profit & Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year when it is
incurred.
E. Revenue Recognition / Income
Revenue Income is recognised on accrual basis except where mentioned
otherwise, in particular:
Sales revenue is recongnised when it is earned and no significant
uncertainty exist as to its realisation or collection. Sales are net of
sales return and trade discounts. Rebate, claims and discounts are
accounted for as and when determined. Deductions made have been reduced
from the Sales where found necessary.
Export sales are accounted on the basis of acceptance by the customers
and on the basis of export bill of lading.
Export sales are accounted as per the prevailing exchange rate on the
date of transaction.
Revenue from services is recongnised on rendering of services.
The pipe coating income is recognised after inspection, approval by
customers and after dispatch. Interest Income is taken on accrual basis
and it is netted off against Interest Payment during the year.
Dividend income on investments are accounted for when the right to
receive the payment is established.
Expenditure is accounted for on accrual basis and provisions are made
for all known liabilities.
F. Treatment of expenditure during construction period
Expenditure in the case of new units and substantial expansion of
existing units during the construction period is included in the work
in progress and the same is allotted to the respective Fixed Assets on
the completion of the construction.
G. Fixed Assets
Fixed Assets are stated at cost of acquisition and installation. The
cost includes Freight, Taxes and related incidental expenses less
Modvat Credit.
The Company has erected factory building sheds and installed plant and
machinery on lease hold land. The company had incurred some
developmental expenditure which was earlier in CWIP on factory
building, plant and on lease hold land which increase the future
benefits from the existing assets beyond its previously assessed
standard of performance i.e. increase in capacity, modernisation & up
gradation.
H. Foreign Currency Translations
The Company is exposed to Currency Fluctuations on Foreign Currency
transactions. With a view to minimize the volatility arising from
fluctuations in the currency rates, the company follows established
risk management policies including the use of exchange forward
contracts and other derivative instruments.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transactions. Monetary Assets and
Liabilities in Foreign Currency as at the Balance Sheet. Gains and
losses arising on account of difference in foreign exchange rates on
settlement / translation of Monetary Assets and Liabilities are
recognized in the Profit and Loss Account.
In respect of forward contracts assigned to the Foreign Currency assets
as at the balance sheet date, the proportionate premium / discount for
the period up to the date of balance sheet is recognized in the profit
and loss account. The exchange difference measured by the change rate
between the inception of forward contract and date of balance sheet is
applied on foreign currency amount of the forward contract and is
recognized in the profit and loss account.
All loans and deferred credits repayable in foreign currency and
outstanding at the close of the year are expressed in Indian currency
at the appropriate rate of exchange prevailing on the date of Balance
Sheet.
Balances in the form of Current Assets and Current Liabilities in
foreign currency, outstanding at the close of the year, are converted
in Indian Currency at the appropriate rates of exchange prevailing on
the date of Balance Sheet. Resultant gain or loss is accounted during
the year.
I. Investments
Investments are classified into current and Long-term investments.
Current Investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of
Long-term investments. However, fixed income long term securities are
stated at cost, less amortization of premium/ discount and provision
for diminution to recognize a decline other then temporary.
J. Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits and they are
recognised in the period in which the employee renders the related
service. The Company recognises the undiscounted amount of short term
employee benefits expected to be paid in exchange for services rendered
as a liability (accrued expense) after deducting any amount already
paid.
Post-employment benefits:
a. Defined contribution plans
Defined contribution plans are Provident Fund scheme, employee state
insurance scheme and Government administered Pension Fund scheme for
all employees and superannuation scheme for eligible employees. The
Company's contribution to defined contribution plans is recognized in
the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards employee
provident fund to the respective Regional Provident Fund Authority.
b. Defined Benefit Gratuity Plan
The company operates a defined benefit Gratuity Plan for employees. The
Company contributes the same to LIC towards meeting the Gratuity
obligations
c. Other long term employee benefits
Entitlements to annual leave and sick leave are recongnised when they
accrue to employees. Sick leave can only be availed while annual leave
can either be availed or encashed subject to a restriction on the
maximum number of accumulations of leave. The Company determines the
liability for such accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations being carried out at each
Balance Sheet date.
K. Cash Flow Statement
The Cash Flow statement is prepared by the indirect method set out in
Accounting Standard -3 on Cash Flow Statement and presents Cash Flows
by operating investing and financing activities of the Company. Cash
and cash equivalent presented in the Cash Flow Statement consists of
Cash in Hand and demand deposits with banks as on the Balance sheet
date.
L. Borrowing Cost
Interest & other borrowing costs on specific borrowings relatable to
the qualifying assets are capitalised. Other interests and borrowing
costs are charged to Revenue.
M. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when there is a present obligation as a
result of past event, it is probable that an outflow of resources will
be required to settle the obligations and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date and adjusted to reflect the best current estimate.
Contingent liabilities are not recognized but disclosed in financial
statements. Contingent assets are neither recognized nor disclosed in
the financial statements.
N. Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities on the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and
the differences between actual results and estimates are recognised in
the periods in which the results are known / materialize.
O. Excise Duty /Service Tax and Sales Tax/Value Added Taxes
Excise duty/Service tax is accounted on the basis of both, payments
made in respect of goods cleared/services provided as also provision
made for goods lying in bonded warehouses. Sales tax/Value added tax
paid is charged to Profit and Loss account.
P. Accounting for Taxes on Income
Income Taxes are accounted for in accordance with Accounting Standard
22 on Accounting for taxes on income. Income taxes comprise both
current and deferred tax.
Current tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable tax rates and
laws. The company offsets advance payments and provisions for current
tax and discloses the net amount it intends to settle and where it has
a legally enforceable right to set off the recognised amount.
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as a deferred tax assets or a deferred
tax liability. Deferred tax assets and liabilities are recognized for
future tax consequences attributable to timing differences. They are
measured using the substantively enacted tax rates and tax regulations.
The carrying amount of deferred tax assets at each balance sheet date
is reduced to the extent that it is no longer reasonable certain that
sufficient future taxable income will be available against which the
deferred tax assets can be realized.
Q. Impairment of Assets:
In the opinion of the company's Management, there is no impairment to
the assets to which Accounting Standard 28 - "Impairment of Assets"
applied requiring any revenue recognition
Mar 31, 2014
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance. In all material
aspects, with the applicable accounting principles in India, the
applicable accounting standard notified under Section 211 (3C) and the
other relevant provisions of the Companies Act, 1956.
All the 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 Schedule VI of the Companies Act 1956. Based on the
nature of products and the time between the acquisition of assets for
processing and their realization in cash and cash equivalent, the
Company has ascertained its operating cycle to be less than 12 months.
A. Method of Accounting
The Accounts have been prepared to comply in all material aspects with
applicable principles in India and the Accounting Standards issued by
the Institute of Chartered Accountants of India and the relevant
provisions of the Companies Act, 1956.
B. Valuation of Inventories
The Raw Materials, Stores and Spare Parts are valued at cost, which is
arrived on FIFO basis. Work in progress, Semi Finished Goods and
Finished Goods are valued at cost or at the net realisable value,
whichever is lower. Cost of Inventories comprises of all costs of
purchase (other than refundable duties and taxes), costs of conversion
& other costs incurred in bringing the inventories to their present
condition and location. Costs of Raw Materials, Packing Materials and
Stores and Spares are determined by the average cost method. Cost of
Work in Progress and Finished Goods inventories are determined by the
absorption costing method. Obsolete, defective, slow moving and
unserviceable inventories are duly provided for.
C. Method of Depreciation and Amortisation
Depreciation is provided from the date the assets have been installed
and put to use on written down value method at the rates and in the
manner prescribed by Schedule XIV of the Companies Act, 1956. Lease
hold land is being amortised over the period of lease. Depreciation on
additions to assets or on sale - discardment of assets, is calculated
on pro-rata from the month of such addition or upto the month of such
sale/discardment, as the case may be.
D. Research and Development
Revenue Expenditure is charged to Profit & Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year when it is
incurred.
E. Revenue Recognition / Income
Revenue Income is recognised on accrual basis except where mentioned
otherwise, in particular:
Sales revenue is recognised when it is earned and no significant
uncertainty exist as to its realisation or collection. Sales are net of
sales return and trade discounts. Rebate, claims and discounts are
accounted for as and when determined. Deductions made have been reduced
from the Sales where found necessary.
Export sales are accounted on the basis of acceptance by the customers
and on the basis of export bill of lading.
Export sales are accounted as per the prevailing exchange rate on the
date of transaction.
Revenue from services is recognised on rendering of services.
The pipe coating income is recognised after inspection, approval by
customers and after despatch. Interest Income is taken on accrual basis
and it is netted off against Interest Payment during the year.
Dividend income on investments are accounted for when the right to
receive the payment is established.
Expenditure is accounted for on accrual basis and provisions are made
for all known liabilities.
F. Treatment of expenditure during construction period
Expenditure in the case of new units and substantial expansion of
existing units during the construction period is included in the work
in progress and the same is allotted to the respective Fixed Assets on
the completion of the construction.
G. Fixed Assets
Fixed Assets are stated at cost of acquisition and installation. The
cost includes Freight, Taxes and related incidental expenses less
Modvat Credit.
The Company has erected factory building sheds and installed plant and
machinery on lease hold land. The Company had incurred some
developmental expenditure which was earlier in CWIP on factory
building, plant and on lease hold land which increase the future
benefits from the existing assets beyond its previously assessed
standard of performance i.e. increase in capacity, modernisation & up
gradation.
H. Foreign Currency Transactions
The Company is exposed to Currency Fluctuations on Foreign Currency
transactions. With a view to minimize the volatility arising from
fluctuations in the Currency Rates, the Company follows established
risk management policies including the use of exchange forward
contracts and other derivative instruments.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transactions. Monetary Assets and
Liabilities in Foreign Currency as at the Balance Sheet. Gains and
losses arising on account of difference in foreign exchange rates on
settlement / translation of Monetary Assets and Liabilities are
recognized in the Profit and Loss Account.
In respect of forward contracts assigned to the Foreign Currency assets
as at the balance sheet date, the proportionate premium / discount for
the period up to the date of balance sheet is recognized in the profit
and loss account. The exchange difference measured by the change rate
between the inception of forward contract and date of balance sheet is
applied on foreign currency amount of the forward contract and is
recognized in the profit and loss account.
All loans and deferred credits repayable in foreign currency and
outstanding at the close of the year are expressed in Indian currency
at the appropriate rate of exchange prevailing on the date of Balance
Sheet.
Balances in the form of Current Assets and Current Liabilities in
foreign currency, outstanding at the close of the year, are converted
in Indian Currency at the appropriate rates of exchange prevailing on
the date of Balance Sheet. Resultant gain or loss is accounted during
the year.
I. Investments
Investments are classified into current and Long-term investments.
Current Investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of
Long-term investments. However, fixed income long term securities are
stated at cost, less amortization of premium/discount and provision for
diminution to recognize a decline other then temporary.
J Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits and they are
recognised in the period in which the employee renders the related
service. The Company recognises the undiscounted amount of short term
employee benefits expected to be paid in exchange for services rendered
as a liability (accrued expense) after deducting any amount already
paid.
Post-employment benefits:
a. Defined contribution plans
Defined contribution plans are Provident Fund scheme, employee state
insurance scheme and Government administered Pension Fund scheme for
all employees and superannuation scheme for eligible employees. The
Company''s contribution to defined contribution plans is recognized in
the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards employee
provident fund to the respective Regional Provident Fund Authority.
b. Defined Benefit Gratuity Plan
The Company operates a defined benefit Gratuity Plan for employees. The
Company contributes the same to LIC towards meeting the Gratuity
obligations.
c. Other long term employee benefits
Entitlements to annual leave and sick leave are recognised when they
accrue to employees. Sick leave can only be availed while annual leave
can either be availed or encashed subject to a restriction on the
maximum number of accumulations of leave. The Company determines the
liability for such accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations being carried out at each
Balance Sheet date.
K. Cash Flow Statement
The Cash Flow statement is prepared by the indirect method set out in
Accounting Standard-3 on Cash Flow Statement and presents Cash Flows by
operating investing and financing activities of the Company. Cash and
cash equivalent presented in the Cash Flow Statement consists of Cash
in Hand and demand deposits with banks as on the Balance sheet date.
L. Borrowing Cost
Interest & other borrowing costs on specific borrowings relatable to
the qualifying assets are capitalised. Other interests and borrowing
costs are charged to Revenue.
M. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when there is a present obligation as a
result of past event, it is probable that an outflow of resources will
be required to settle the obligations and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date and adjusted to reflect the best current estimate.
Contingent liabilities are not recognized but disclosed in financial
statements. Contingent assets are neither recognized nor disclosed in
the financial statements.
N. Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities on the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and
the differences between actual results and estimates are recognised in
the periods in which the results are known / materialize.
O. Excise Duty /Service Tax and Sales Tax/Value Added Taxes
Excise duty/Service tax is accounted on the basis of both, payments
made in respect of goods cleared/services provided as also provision
made for goods lying in bonded warehouses. Sales tax/Value added tax
paid is charged to Profit and Loss account.
P. Accounting for Taxes on Income
Income Taxes are accounted for in accordance with Accounting Standard
22 on Accounting for taxes on income. Income taxes comprise both
current and deferred tax.
Current tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable tax rates and
laws. The Company offsets advance payments and provisions for current
tax and discloses the net amount it intends to settle and where it has
a legally enforceable right to set off the recognised amount.
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as a deferred tax assets or a deferred
tax liability. Deferred tax assets and liabilities are recognized for
future tax consequences attributable to timing differences. They are
measured using the substantively enacted tax rates and tax regulations.
The carrying amount of deferred tax assets at each balance sheet date
is reduced to the extent that it is no longer reasonable certain that
sufficient future taxable income will be available against which the
deferred tax assets can be realized.
Q. Impairment of Assets
In the opinion of the Company''s Management, there is no impairment to
the assets to which Accounting Standard 28 - "Impairment of Assets"
applied requiring any revenue recognition.
Sep 30, 2013
Statement of Significant Accounting Policies and Practices (Annexed) to
and forming part of the Financial Statements for the period ended 30th
September 2013)
These Financial Statements have been prepared on an accrual basis and
under historical cost convention and in compliance in all material
aspects, with the applicable accounting principles in India, the
applicable accounting standard notified under Section 211 (3C) and the
other relevant provisions of the Companies Act, 1956
All the 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 Schedule VI of the Companies Act 1956. Based on the
nature of products and the time between the acquisition of assets for
processing and their realization in cash and cash equivalent, the
Company has ascertained its operating cycle to be less than 12 months.
A. Method of Accounting
The Accounts have been prepared to comply in all material aspects with
applicable principles in India and the Accounting Standards issued by
the Institute of Chartered Accountants of India and the relevant
provisions of the Companies Act 1956
B. Valuation of Inventories
The Raw Materials, Stores and Spare Parts are valued at cost, which is
arrived on FIFO basis. Work in progress, Semi Finished Goods and
Finished Goods are valued at cost or at the net realisable value,
whichever is lower. Cost of Inventories comprises of all costs of
purchase (other than refundable duties and taxes), costs of conversion
& other costs incurred in bringing the inventories to their present
condition and location. Costs of Raw Materials, Packing Materials and
Stores and Spares are determined by the average cost method. Cost of
Work in Progress and Finished Goods inventories are determined by the
absorption costing method. Obsolete, defective, slow moving and
unserviceable inventories are duly provided for.
C. Method of Depreciation and Amortisation
Depreciation is provided from the date the assets have been installed
and put to use on written down value method at the rates and in the
manner prescribed by schedule XIV of the Companies Act, 1956. Lease
hold land is being amortised over the period of lease. Depreciation on
additions to assets or on sale - discardment of assets, is calculated
on pro-rata from the month of such addition or upto the month of such
sale/discardment, as the case may be.
D. Research and Development
Revenue Expenditure is charged to Profit & Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year when it is
incurred.
E. Revenue Recognition / Income
Revenue Income is recognised on accrual basis except where mentioned
otherwise, in particular:
Sales revenue is recognised when it is earned and no significant
uncertainty exist as to its realisation or collection. Sales are net of
sales return and trade discounts. Rebate, claims and discounts are
accounted for as and when determined. Deductions made have been reduced
from the Sales where found necessary.
Export Sales are accounted on the basis of acceptance by the customers
and on the basis of export bill of lading.
Export Sales are accounted as per the prevailing exchange rate on the
date of transaction.
Revenue from services is recognised on rendering of services.
The pipe coating income is recognised after inspection, approval by
customers and after despatch. Interest Income is taken on accrual basis
and it is netted off against Interest Payment during the year.
Dividend Income on investments are accounted for when the right to
receive the payment is established.
Expenditure is accounted for on accrual basis and provisions are made
for all known liabilities.
F. Treatment of expenditure during construction period
Expenditure in the case of new units and substantial expansion of
existing units during the construction period is included in the work
in progress and the same is allotted to the respective Fixed Assets on
the completion of the construction.
G. Fixed Assets
Fixed Assets are stated at cost of acquisition and installation. The
cost includes Freight, Taxes and related incidental expenses less
Modvat Credit.
The Company has erected factory building sheds and installed plant and
machinery on lease hold land. The company had incurred some
developmental expenditure which was earlier in CWIP on factory
building, plant and on lease hold land which increase the future
benefits from the existing assets beyond its previously assessed
standard of performance i.e. increase in capacity, modernisation & up
gradation.
H. Foreign Currency or Transactions
The Company is exposed to Currency Fluctuations on Foreign Currency
transactions. With a view to minimize the volatility arising from
fluctuations in the currency rates, the company follows established
risk management policies including the use of exchange forward
contracts and other derivative instruments.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transactions. Monetary Assets and
Liabilities in Foreign Currency as at the Balance Sheet. Gains and
losses arising on account of difference in foreign exchange rates on
settlement / translation of Monetary Assets and Liabilities are
recognized in the Profit and Loss Account.
In respect of forward contracts assigned to the Foreign Currency assets
as at the balance sheet date, the proportionate premium / discount for
the period up to the date of Balance Sheet is recognized in the Profit
and Loss Account. The exchange difference measured by the change rate
between the inception of forward contract and date of balance sheet is
applied on foreign currency amount of the forward contract and is
recognized in the Profit and Loss Account.
All loans and deferred credits repayable in foreign currency and
outstanding at the close of the year are expressed in Indian currency
at the appropriate rate of exchange prevailing on the date of Balance
Sheet.
Balances in the form of Current Assets and Current Liabilities in
foreign currency, outstanding at the close of the year, are converted
in Indian Currency at the appropriate rates of exchange prevailing on
the date of Balance Sheet. Resultant gain or loss is accounted during
the year.
I. Investments
Investments are classified into Current and Long-term investments.
Current Investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of
Long-term investments. However, fixed income long term securities are
stated at cost, less amortization of premium/discount and provision for
diminution to recognize a decline other then temporary.
J. Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits and they are
recognised in the period in which the employee renders the related
service. The Company recognises the undiscounted amount of short term
employee benefits expected to be paid in exchange for services rendered
as a liability (accrued expense) after deducting any amount already
paid.
Post-employment benefits:
a. Defined contribution plans
Defined contribution plans are Provident Fund scheme, employee state
insurance scheme and Government administered Pension Fund scheme for
all employees and superannuation scheme for eligible employees. The
Company''s contribution to defined contribution plans is recognized in
the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards employee
provident fund to the respective Regional Provident Fund Authority.
b. Defined Benefit Gratuity Plan
The company operates a Defined Benefit Gratuity Plan for employees. The
Company contributes the same to LIC towards meeting the Gratuity
obligations
c. Other long term employee benefits
Entitlements to annual leave and sick leave are recongnised when they
accrue to employees. Sick leave can only be availed while annual leave
can either be availed or encashed subject to a restriction on the
maximum number of accumulations of leave. The Company determines the
liability for such accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations being carried out at each
Balance Sheet date.
K. Cash Flow Statement
The Cash Flow Statement is prepared by the indirect method set out in
Accounting Standard -3 on Cash Flow Statement and presents Cash Flows
by operating investing and financing activities of the Company. Cash
and cash equivalent presented in the Cash Flow Statement consists of
Cash in Hand and demand deposits with banks as on the Balance sheet
date.
L. Borrowing Cost
Interest & other borrowing costs on specific borrowings relatable to
the qualifying assets are capitalised. Other interests and borrowing
costs are charged to Revenue.
M. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when there is a present obligation as a
result of past event, it is probable that an outflow of resources will
be required to settle the obligations and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date and adjusted to reflect the best current estimate.
Contingent liabilities are not recognized but disclosed in financial
statements. Contingent assets are neither recognized nor disclosed in
the financial statements.
N. Management Estimates
The preparation of Financial Statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of Assets and Liabilities and
disclosure of contingent liabilities on the date of the Financial
Statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and
the differences between actual results and estimates are recognised in
the periods in which the results are known / materialize.
O. Excise Duty /Service Tax and Sales Tax/Value Added Taxes
Excise Duty/Service Tax is accounted on the basis of both, payments
made in respect of goods cleared/services provided as also provision
made for goods lying in bonded warehouses. Sales Tax/Value Added Tax
paid is charged to Profit and Loss Account.
P. Accounting for Taxes on Income
Income Taxes are accounted for in accordance with Accounting Standard
22 on Accounting for taxes on income. Income taxes comprise both
current and deferred tax.
Current tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable tax rates and
laws. The company offsets advance payments and provisions for current
tax and discloses the net amount it intends to settle and where it has
a legally enforceable right to set off the recognised amount.
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as a Deferred Tax Assets or a Deferred
Tax Liability. Deferred Tax Assets and liabilities are recognized for
future tax consequences attributable to timing differences. They are
measured using the substantively enacted tax rates and tax regulations.
The carrying amount of Deferred Tax Assets at each Balance Sheet date
is reduced to the extent that it is no longer reasonable certain that
sufficient future taxable income will be available against which the
deferred tax assets can be realized.
Q. Impairment of Assets:
In the opinion of the company''s Management, there is no impairment to
the assets to which Accounting Standard 28 - "Impairment of Assets"
applied requiring any revenue recognition
During this period the Company has sought Restructuring package from
all the Bankers towards the Bank Loan Outstanding. The Company has
filed the Flash Report on 6th March 2013 before Corporate Debt
Restructuring (CDR) Cell at Mumbai. The restructuring package was
approved by the CDR cell with an effective date being 24.08.2013. The
outstanding loan balance is worked out on the basis of the approved
package and it is accounted. The interest rate was calculated @ 10.25%
on the loan outstanding balance of non CDR member bankers as on 1st
January 2013 and accounted the excess interest charged by the non CDR
member banks during the period from 1st January 2013 to 30th September
2013 was adjusted accordingly in the interest account. Interest payable
for CDR member banks were not accounted for the period from 1st January
2013 to 30th September 2013. The Master Restructuring Agreement (MRA)
drafted by Amarachand & Mangaldas & Suresh A Shroff & Co. (AMSS) (Legal
Counsel to the Bankers) appointed by the Banks through MI is under
signature as on the date of Balance sheet.
Mar 31, 2012
These Financial Statements have been prepared on an Accrual Basis and
under historical cost convention and in compliance. In all material
aspects, with the applicable accounting principles in India, the
applicable accounting standard notified under Section 211 (3C) and the
other relevant provisions of the Companies Act, 1956.
All the 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 Schedule VI of the Companies Act, 1956. Based on the nature
of products and the time between the acquisition of Assets for
processing and their realization in cash and cash equivalent, the
Company has ascertained its operating cycle to be less than 12 months.
A. Method of Accounting
The Accounts have been prepared to comply in all material aspects with
applicable principles in India and the Accounting Standards issued by
the Institute of Chartered Accountants of India and the relevant
provisions of the Companies Act, 1956.
B. Valuation of Inventories
The Raw Materials, Stores and Spare Parts are valued at cost, which is
arrived on FIFO basis. Work in progress, Semi Finished Goods and
Finished Goods are valued at cost or at the net realizable value,
whichever is lower. Cost of Inventories comprises of all costs of
purchase (other than refundable duties and taxes), costs of conversion
& other costs incurred in bringing the inventories to their present
condition and location. Costs of Raw Materials, Packing Materials and
Stores and Spares are determined by the average cost method. Cost of
Work in Progress and Finished Goods inventories are determined by the
absorption costing method. Obsolete, defective, slow moving and
unserviceable inventories are duly provided for.
C. Method of Depreciation and Amortization
Depreciation is provided from the date the Assets have been installed
and put to use on written down value method at the rates and in the
manner prescribed by schedule XIV of the Companies Act, 1956. Lease
hold land is being amortized over the period of lease. Depreciation on
additions to Assets or on sale - discernment of Assets, is calculated
on pro-rata basis from the month of such addition or up to the month of
such sale/discernment, as the case may be.
D. Research and Development
Revenue Expenditure is charged to Profit & Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year when it is
incurred.
E. Revenue Recognition / Income
Revenue Income is recognized on Accrual Basis except where mentioned
otherwise, in particular:
Sales revenue is recognized when it is earned and no significant
uncertainty exist as to its realization or collection. Sales are net of
sales return and trade discounts. Rebate, claims and discounts are
accounted for as and when determined. Deductions made have been reduced
from the Sales where found necessary.
Export Sales are accounted on the basis of acceptance by the customers
and on the basis of export bill of lading.
Export Sales are accounted as per the prevailing exchange rate on the
date of transaction.
Revenue from services is recognized on rendering of services.
The pipe coating income is recognized after inspection, approval by
customers and after dispatch. Interest Income is taken on Accrual Basis
and it is netted off against Interest Payment during the year.
Dividend income on investments are accounted for when the right to
receive the payment is established.
Expenditure is accounted for on Accrual Basis and provisions are made
for all known liabilities.
F. Treatment of expenditure during construction period
Expenditure in the case of new units and substantial expansion of
existing units during the construction period is included in the
work-in-progress and the same is allotted to the respective Fixed
Assets on the completion of the construction.
G. Fixed Assets
Fixed Assets are stated at cost of acquisition and installation. The
cost includes Freight, Taxes and related incidental expenses less
Cenvat Credit.
The Company has erected Factory Building Sheds and installed Plant and
Machinery on lease hold land. The company had incurred some
developmental expenditure which was earlier in CWIP on factory
building, plant and on lease hold land which increase the future
benefits from the existing Assets beyond its previously assessed
standard of performance i.e. increase in capacity, modernization &
up gradation.
H. Foreign Currency Transactions
The Company is exposed to Currency Fluctuations on Foreign Currency
transactions. With a view to minimize the volatility arising from
fluctuations in the currency rates, the company follows established
risk management policies including the use of exchange forward
contracts and other derivative instruments.
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transactions. Monetary Assets and
Liabilities in Foreign Currency as at the Balance Sheet, Gains and
losses arising on account of difference in foreign exchange rates on
settlement / transaction of Monetary Assets and Liabilities are
recognized in the Profit and Loss Account.
In respect of forward contracts assigned to the Foreign Currency Assets
as at the Balance Sheet date, the proportionate premium / discount for
the period up to the date of Balance Sheet is recognized in the Profit
and Loss account. The exchange difference measured by the change rate
between the inception of forward contract and date of Balance Sheet is
applied on Foreign Currency amount of the forward contract and is
recognized in the Profit and Loss account.
All loans and deferred credits repayable in Foreign Currency and
outstanding at the close of the year are expressed in Indian currency
at the appropriate rate of exchange prevailing on the date of Balance
Sheet.
Balances in the form of Current Assets and Current Liabilities in
Foreign Currency, outstanding at the close of the year, are converted
in Indian Currency at the appropriate rates of exchange prevailing on
the date of Balance Sheet. Resultant gain or loss is accounted during
the year.
I. Investments
Investments are classified into Current and Long-term Investments.
Current Investments are stated at lower of cost and fair value.
Long-term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of
Long-term investments. However, fixed income long term securities are
stated at cost, less amortization of premium/discount and provision for
diminution to recognize a decline other than temporary.
J. Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classified as Short term employee benefits and they are
recognized in the period in which the employee renders the related
service. The Company recognizes the undiscounted amount of Short term
employee benefits expected to be paid in exchange for services rendered
as a liability (accrued expense) after deducting any amount already
paid.
Post-employment benefits:
a. Defined contribution plans
Defined contribution plans are Provident Fund Scheme, Employee State
Insurance Scheme and Government Administered Pension Fund Scheme for
all employees and Superannuation Scheme for eligible employees. The
Company's contribution to defined contribution plans are recognized in
the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards Employee
Provident Fund to the respective Regional Provident Fund Authority.
b. Defined Benefit Gratuity Plan
The Company operates a Defined Benefit Gratuity Plan for employees. The
Company contributes the same to LIC towards meeting the Gratuity
obligations
c. Other Long term employee benefits
Entitlements to annual leave and sick leave are recognized when they
accrue to employees. Sick leave can only be availed while annual leave
can either be availed or encased subject to a restriction on the
maximum number of accumulations of leave. The Company determines the
liability for such accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations being carried out at each
Balance Sheet date.
K. Cash Flow Statement
The Cash Flow Statement is prepared by the indirect method set out in
Accounting Standard -3 on Cash Flow Statement and present Cash Flows by
operating investing and financing activities of the Company. Cash and
cash equivalent presented in the Cash Flow Statement consists of Cash
in Hand and demand deposits with banks as on the Balance Sheet date.
L. Borrowing Cost
Interest & other borrowing costs on specific borrowings relatable to
the qualifying Assets are capitalized. Other interests and borrowing
costs are charged to Revenue.
M. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when there is a present obligation as a
result of past event, it is probable that an outflow of resources will
be required to settle the obligations and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the yearend date. These are reviewed at the end of each
year and adjusted to reflect the best current estimate.
Contingent Liabilities are not recognized but disclosed in Financial
Statements. Contingent Assets are neither recognized nor disclosed in
the Financial Statements.
N. Management Estimates
The preparation of Financial Statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of Assets and Liabilities and
disclosure of Contingent Liabilities on the date of the Financial
Statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and
the differences between actual results and estimates are recognised in
the periods in which the results are known / materialize.
O. Excise Duty /Service Tax and Sales Tax/Value Added Taxes
Excise duty/Service tax is accounted on the basis of both, payments
made in respect of goods cleared/services provided as also provision
made for goods lying in bonded warehouses. Sales Tax/Value Added Tax
paid is charged to Profit and Loss account.
P. Accounting for Taxes on Income
Income Tax are accounted for in accordance with Accounting Standard 22
on Accounting for taxes on income. Income taxes comprise both Current
and Deferred tax.
Current tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable tax rates and
laws. The company offsets advance payments and provisions for current
tax and discloses the net amount it intends to settle and where it has
a legally enforceable right to set off the recognized amount.
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as a Deferred Tax Assets or a Deferred
Tax Liability. Deferred Tax Assets and Liabilities are recognized for
future tax consequences attributable to timing differences. They are
measured using the substantively enacted tax rates and tax regulations.
The carrying amount of Deferred Tax Assets at each Balance Sheet date
is reduced to the extent that it is no longer reasonable certain that
sufficient future taxable income will be available against which the
Deferred Tax Assets can be realized.
Q. Impairment of Assets:
In the opinion of the Company's Management, there is no impairment to
the Assets to which Accounting Standard 28 - "Impairment of Assets"
applied requiring any revenue recognition.
Mar 31, 2011
A. Method of Accounting
The Accounts have been prepared to comply in all material aspects with
applicable principles in India and the Accounting Standards issued by
the Institute of Chartered Accountants of India and the relevant
provisions of the Companies Act,1956
b. Inventories
The Raw Materials, Stores and Spare Parts are valued at cost, which is
arrived on FIFO basis. Work in progress, Semi Finished Goods and
Finished Goods are valued at cost or at the net realisable value,
whichever is lower. Cost of Inventories comprises of all costs of
purchase (other than refundable duties and taxes) costs of conversion &
other costs incurred in bringing the inventories to their present
condition and location. Costs of Raw Materials, Packing Materials and
Stores and Spares are determined by the average cost method. Cost of
Work in Progress and Finished Goods Inventories are determined by the
absorption costing method. Obsolete, defective, slow moving and
unserviceable inventories are duly provided for.
c. Depreciation
Depreciation is provided from the date the assets have been installed
and put to use on written down value method at the rates and in the
manner prescribed by Shedule XIV of the Companies Act, 1956. Lease hold
land is being amortised over the period of lease. Depreciation on
additions to assets or on sale - discardment of assets, is calculated
on pro-rata basis from the month of such addition or upto the month of
such sale/discardment, as the case may be.
d. Research and Development Expenditure
Revenue Expenditure is charged to Profit & Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year when it is
incurred.
e. Revenue Recognition/Income
Revenue Income is recognised on accrual basis except where mentioned
otherwise, in particular:
i. Sales Revenue is recongnised when it is earned and no significant
uncertainty exist as to its realisation or collection. Sales are net
of sales return and trade discounts. Rebate, claims and discounts are
accounted for as and when determined. Deductions made have been
reduced from the Sales where found necessary. Export sales are
accounted on the basis of acceptance by the customers and on the basis
of export bill of lading. Export sales are accounted as per the
prevailing exchange rate on the date of transaction. Revenue from
services is recongnised on rendering of services.
ii. Gross Sales include Excise Duty collection of Rs. 13946.47 lacs,
Service Tax, Sales Tax and Freight charged in invoices.
iii. The pipe coating income is recognised after inspection, approval
by customers and after despatch.
iv. Interest income is taken on accrual basis. Interest Income of Rs.
759.08 Lacs netted off against interest payment during the year.
(Previous year interest income of Rs. 477.88 lacs netted off against
interest payment) wherever applicable.
v. Dividend income on investments are accounted for when the right to
receive the payment is established.
vi. Expenditure are accounted for on accrual basis and provisions are
made for all known liabilities.
f. Treatment of expenditure during construction period
Expenditure in the case of new units and substantial expansion of
existing units during the construction period is included in the work
in progress and the same is allotted to the respective Fixed Assets on
the completion of the construction.
g. Fixed Assets
i. Fixed Assets are stated at cost of acquisition and installation. The
cost includes Freight, Taxes and related incidental expenses less
Cenvat Credit.
ii. The Company has erected factory building sheds and installed plant
and machinery on lease hold land. The Company had incurred some
developmental expenditure which was earlier in CWIP on factory
building, plant and on lease hold land which increase the future
benefits from the existing assets beyond its previously assessed
standard of performance i.e. increase in capacity, modernisation &
upgradation.
h. Foreign Currency Transactions
i. a. The company is exposed to currency Fluctuations on Foreign
Currency transactions. With a view to minimize the volatility arising
from fluctuations in the currency rates, the company follows
established risk management policies including the use of exchange
forward contracts and other derivative instruments.
b. Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transactions. Monetary Assets and
Liabilities in Foreign Currency as at the Balance Sheet. Gains and
losses arising on account of difference in foreign exchange rates on
settlement / translation of monetary Assets and Liabilities are
recognized in the Profit and Loss Account.
c. In respect of forward contracts assigned to the Foreign Currency
Assets as at the Balance Sheet date, the proportionate premium /
discount for the period up to the date of Balance Sheet is recognized
in the Profit and Loss Account. The exchange difference measured by
the change rate between the inception of forward contract and date of
Balance Sheet is applied on foreign Currency amount of the forward
contract and is recognized in the Profit and Loss Account.
ii. All loans and deferred credits repayable in foreign currency and
outstanding at the close of the year are expressed in Indian currency
at the appropriate rate of exchange prevailing on the date of Balance
Sheet.
iii. Balances in the form of Current Assets and Current Liabilities in
Foreign Currency, outstanding at the close of the year, are converted
in Indian Currency at the appropriate rates of exchange prevailing on
the date of Balance Sheet. Resultant gain or loss is accounted during
the year.
i. Derivative Instruments
I. The company has entered into the following derivative instruments:
a. Forward Exchange contracts (being a derivative instrument), which
are not intended for trading or speculative purposes, but for hedge
purposes, to establish the amount of reporting currency required or
available at the settlement date of certain payables and receivables.
Forward Exchange Contracts entered into by the Company as on March 31,
2011 [8.861 USD (mn)]
b. Interest Rate Swaps to hedge against fluctuations in interest rate
changes : No. of Contracts : NIL
Notional Principal : NIL
c. Currency Swaps (other than forward exchange contracts stated above)
to hedge against fluctuations in changes in exchange rate.
No. of Contracts : NIL
Notional Principal : NIL
III. Derivative Instruments (causing an unhedged Foreign Currency
exposure): NIL
j. Investments
i. Investments are of long term nature and are stated at cost of
acquisition, less any diminishing in the value other then temporary.
ii. The investments in companies under the same management and its
subsidiaries whose shares are unquoted are valued at cost. The
Management is of the opinion that there is no diminishing value on
these Investments.
k. Employee Benefits
A. Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits and they are
recognised in the period in which the employee renders the related
service. The Company recognises the undiscounted amount of short term
employee benefits expected to be paid in exchange for services rendered
as a liability (accrued expense) after deducting any amount already
paid.
B. Post-employment benefits
(a) Defined contribution plans
Defined contribution plans are Provident Fund Scheme, Employee State
Insurance Scheme and Government Administered Pension Fund Scheme for
all employees and Superannuation Scheme for eligible employees. The
Company's contribution to defined contribution plans are recognised in
the Profit and Loss Account in the financial year to which they relate.
The Company makes specified monthly contributions towards Employee
Provident Fund to the respective Regional Provident Fund Authority.
b) Defined Benefit Gratuity Plan
The Company operates a defined benefit Gratuity Plan for employees. The
Company contributes the same to LIC towards meeting the Gratuity
obligations.
C. Other long term employee benefits
Entitlements to annual leave and sick leave are recognised when they
accrue to employees. Sick leave can only be availed while annual leave
can either be availed or encashed subject to a restriction on the
maximum number of accumulation of leave. The Company determines the
liability for such accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations being carried out at each
Balance Sheet date.
iii) For the year ended March 31, 2011, provision for Employees
Benefits amounting to Rs. 53.56 Lacs towards Leave Encashment has been
made to SBI Life Insurance Co. Ltd., Mumbai. The actual liability as
per actuarial valuation amounts to Rs. 135.60 Lacs.
l. Borrowing Cost
Interest & other Borrowing Costs on specific borrowings relatable to
the qualifying Assets are capitalised. Other Interests and Borrowing
Costs are charged to Revenue.
m. Cash Flow Statement
The Cash Flow statement is prepared by the indirect method set out in
Accounting Standard - 3 on Cash Flow Statement and presents Cash Flows
by operating, investing and financing activities of the Company. Cash
and cash equivalents presented in the Cash Flow Statement consists of
Cash in Hand and demand deposits with banks as on the Balance Sheet
date.
n. Provisions
A provision is recognised when there is a present obligation as a
result of past event, it is probable that an outflow of resources will
be required to settle the obligations and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date and adjusted to reflect the best current estimate.
o. Segment Reporting
The Group is engaged in the business of production of steel products
which in the opinion of the management is considered the only business
segment in the context of Accounting Standard - 17 on Segmental
Reporting. Also, the Group does not consider any significant difference
as regards the risks and returns of the product with reference to
export and domestic sales. Therefore, Segment information as required
by Accounting Standard - 17 is not applicable.
p. Related Party and Key Management Personnel Disclosure
A. Name of the Party and the Relationship
a) Subsidiary Companies
i. PSL Corrosion Control Services Ltd. : 100% Subsidiary Company
ii. Pipeline Systems Ltd., Mauritius : 100% Subsidiary Company
iii. PSL USA INC., Delaware, USA : 100% Subsidiary Company
iv. PSL Gas Distribution Pvt.Ltd. : 100% Subsidiary Company
v. PSL Infrastructure & Ports Pvt.Ltd. : 100% Subsidiary Company
vi. PSL FZE, Sharjah. : 100% Subsidiary Company of Pipeline Systems
Ltd., Mauritius
vii. PSL North America LLC. : JV Company of PSL USA INC, Delaware,
USA, (78% holding)
b) Companies in which control exists directly / indirectly
i. BHI Ltd.
ii. Broken Hills International Ltd.
iii. Eurocoustic Products Ltd.
iv. Punj International Pvt. Ltd.
v. Punj Investments Ltd.
vi. Punj Corporation Private Limited
vii. Rosoboronterra India Pvt.Ltd.
(Subsidiary of Punj Corporation Pvt.Ltd.)
c) Key Management Personnel
Ashok Punj :Managing Director
M. M. Mathur :Director
R. K. Bahri :Director
G. S. Sauhta :Director
D. N. Sehgal :Director
S.P. Bhatia :Director
C. K. Goel :Director
G. Gehani :Director & Company Secretary
q. Lease
Operating lease payments are recognized as expenditure in the Profit
and Loss Account on a straight-line basis, which is representative of
the time pattern of benefits received from the use of assets taken on
lease. Lease rentals in respect of operating lease are recognized as
income over the lease period.
r. Earning Per Share
The Company reports basic and diluted Earnings Per Share in accordance
with Accounting Standard 20 on Earning Per Share. Basic Earnings per
share is computed by dividing the net profit or loss for the year by
the weighted average number of equity shares outstanding during the
year. Diluted Earnings Per Share is computed by dividing the net profit
or loss for the year by the weighted average number of equity shares
outstanding during the year as adjusted for the effects of all dilutive
potential equity shares, except where the results are anti-dilutive.
s. Management Estimates
The preparation of Financial Statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of Assets and Liabilities and
disclosure of Contingent Liabilities on the date of the Financial
Statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and
the differences between actual results and estimates are recognised in
the periods in which the results are known / materialize.
t. Accounting for Taxes on Income
Income Tax are accounted for in accordance with Accounting Standard 22
on Accounting for taxes on income. Income tax comprise both current and
deferred tax.
Current tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable Tax Rates and
laws. The company offsets advance payments and provisions for current
tax and disclose the net amount it intends to settle and where it has a
legally enforceable right to set off the recognised amount.
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as a Deferred Tax Assets or a Deferred
Tax Liability. Deferred Tax Assets and Liabilities are recognized for
future tax consequences attributable to timing differences. They are
measured using the substantively enacted tax rates and tax regulations.
The carrying amount of Deferred Tax Assets at each Balance Sheet date
is reduced to the extent that it is no longer reasonable certain that
sufficient future taxable income will be available against which the
Deferred Tax Assets can be realized.
u. Sundry Debtors/Loans & Advances
Sundry Debtors, Creditors and other advances are subject to
confirmation. The effect of the same, if any, which is not likely to be
material, will be adjusted at the time of confirmation. Sundry
Creditors for purchases includes Rs. 89707.07 Lacs being buyer's credit
availed by the Company for the purchase of Raw Materials/ Capital
Goods.
v. Impairment of Assets:
In the opinion of the company's Management, there is no impairment to
the assets to which Accounting Standard 28 "Impairment of Assets"
applied requiring any revenue recognition.
w. Contingent liabilities
Contingent liabilities as defined in Accounting Standard 29 are
disclosed in the notes to accounts. Provisions is made if it became
probable that an outflow of future economic benefits will be required
for an item previously dealt with it as a contingent liability.
Mar 31, 2010
A. Method of Accounting
The Accounts have been prepared to comply in all material aspects with
applicable principles in India and the Accounting Standards issued by
the Institute of Chartered Accountants of India and the relevant
provisions of the Companies Act, 1956.
b. Inventories
The Raw Materials, Stores and Spare Parts are valued at a cost, which
is arrived on FIFO basis. Work in progress, Semi Finished Goods and
Finished Goods are valued at cost or at the net realisable
value,whichever is lower. Cost of Inventories comprises of all costs of
purchase (other than refundable duties and taxes), costs of conversion
& other costs incurred in bringing the inventories to their present
condition and locations. Costs of Raw Materials, Packing Materials and
Stores and Spares are determined by the average method. Cost of Work in
Process and Finished Goods Inventories are determined by the absorption
costing method. Obsolete, defective, slow moving and unserviceable
inventories are duly provided for.
c. Depreciation
Depreciation is provided from the date the assets have been installed
and put to use on written down value method at the rates and in the
manner prescribed by schedule XIV of the Companies Act, 1956. Lease
hold land is being amortised over the period of lease. Depreciation on
additions to assets or on sale - discardement of assets, is calculated
pro-rata from the month of such addition or upto the month of such
sale/discardment, as a case may be.
d. Research and Development Expenditure
Revenue Expenditure is charged in Profit & Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year when it is
incurred.
e. Revenue Recognition/Income
Revenue Income is recognised on accrual basis except where mentioned
otherwise, in particular:
i. Sales revenue is recongnised when it is earned and no significant
uncertainty exists as to its realisation or collection. Sales are net
of sales return and trade discounts. Rebate, claims and discounts are
accounted for as and when determined. Deductions made have been reduced
from the Sales where found necessary. Export sales are accounted on the
basis of acceptance by the customers and on the basis of export bill of
lading. Export sales are accounted as per the prevailing exchange rate
on the date of transaction. Revenue from services is recongnised on
rendering of services.
ii. Gross Sales include excise duty collection of Rs. 10,095.74 lacs,
Service Tax, Sales Tax and Freight charged in invoices.
iii. The pipe coating income is recognised after inspection, approval
by customers and after dispatch.
iv. Interest income is taken on accrual basis. Interest Income of Rs.
477.88 Lacs netted off against interest payment during the year.
(Previous year interest income of Rs.769.75 lacs netted off against
interest payment) wherever applicable.
v. Dividend income on investments are accounted for when the right to
receive the payment is established.
vi. Expenditures are accounted for on accrual basis and provisions are
made for all known liabilities.
f. Treatment of expenditure during construction period:
Expenditure in the case of new units and substantial expansion of
existing units during the construction period is included in the work
in progress and the same is allotted to the respective Fixed Assets on
the completion of the construction.
g. Fixed Assets
i. Fixed assets are stated at cost of acquisition and installation.
The cost includes freight, taxes and related incidental expenses less
Modvat Credit. ii. The company has erected factory building sheds and
installed plant and machinery on lease hold land. The company had
incurred some developmental expenditure which was earlier in CWIP
on factory buidling, plant and on lease hold land which increase the
future benefits from the existing assets beyond its previously assessed
standard of performance i.e. increase in capacity, modernisation &
upgradation.
h. Foreign Currency Transactions
i. a. The company is exposed to Currency Fluctuations on foreign
currency transactions. With a view to minimize the volatility arising
from fluctuations in the currency rates, the company follows
established risk management policies including the use of exchange
forward contracts and other derivative instruments.
b. Foreign Currency transactions are recorded at the exchange rate
prevailing on the date of such transactions. Monetary Assets and
Liabilities in Foreign Currency as in the Balance Sheet. Gains and
Losses arising on account of difference in foreign exchange rates on
settlement/translation of monetary assets and liablities are recognized
in the Profit and Loss Account.
c. In respect of forward contracts assigned to the foreign currency
assets as at the Balance Sheet date, the proportionate premium /
discount for the period up to the date of Balance Sheet is recognized
in the Profit and Loss Account. The exchange difference measured by
the exchange rate between the inception of forward contract and date of
Balance Sheet is applied on foreign currency amount of the forward
contract and is recognized in the Profit and Loss Account.
ii. All loans and deferred credits repayable in foreign currency and
outstanding at the close of the year are expressed in Indian currency
at the appropriate rate of exchange prevailing on the date of Balance
Sheet.
iii. Balances in the form of Current Assets and Current Liabilities in
foreign currency, outstanding at the close of the year, are converted
in Indian Currency at the appropriate rates of exchange prevailing on
the date of Balance Sheet. Resultant gain or loss is accounted during
the year.
i. Employee Benefits
A. Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits and they are
recognized in the period in which the employee renders the related
service. The Company recognizes the undiscounted amount of short term
employee benefits expected to be paid in exchange for services rendered
as a liability (accrued expense) after deducting any amount already
paid.
B. Post-employment benefits
(a) Defined contribution plans
Defined contribution plans are Provident Fund Scheme, Employee State
Insurance Scheme and Government administered Pension Fund Scheme for all
employees and superannuation scheme for eligible employees. The Companys
contribution to defined contribution plans are recognised in the Profit
and Loss Account in the Financial Year to which they relate.
The Company makes specified monthly contributions towards employee
provident fund to the Regional Provident Fund Authority by the Company.
b) Defined benefit plans Defined benefit gratuity plan The Company
operates a defined benefit gratuity plan for employees. The Company
contributes the same to LIC, towards meeting the Gratuity obligation.
C. Other Long Term Employee Benefits
Entitlements to annual leave and sick leave are recognized when they
accrue to employees. Sick leave can only be availed while annual leave
can either be availed or encashed subject to a restriction on the maximum
number of accumulation of leave. The Company determines the liability for
such accumulated leaves using the Projected Accrued Benefit method with
actuarial valuations being carried out at each Balance Sheet date.
For the year ended March 31, 2010, provision for Employees Benefits
amounting to Rs. 63.73 Lacs towards Leave Encashment has been made to SBI
Life Insurance Co. Ltd., Mumbai. The actual liability as per acturial
valuation amounts to Rs. 95.37 Lacs
The estimates of the future salary increases considered in Actuarial
valuation take account of inflation, seniority promotion and other
relevant factors.
- Including Contribution to Recognised Provident Fund Scheme (in
respect of employees of Pune and Head office, Mumbai) a defined benefit
scheme in the absence of actuarial valuation for Provident Fund
Liability. (Refer Note 1 (i)(v) in Schedule 14)
j Derivative Instruments
I. The Company has entered into the following Derivative Instruments.
a. Forward Exchange contracts (being a derivative instrument), which
are not intended for trading or speculative purposes, but for hedge
purposes, to establish the amount of reporting currency required or
available at the settlement date of certain payables and receivables.
Forward Exchange Contracts entered into by the Company as on March 31,
2010.: N I L
b. Interest Rate Swaps to hedge against fluctuations in interest rate
changes :
No. of Contracts : NIL
Notional Principal : NIL
c. Currency Swaps (other than forward exchange contracts stated above)
to hedge against fluctuations in changes in
exchange rate.
No. of Contracts : NIL
Notional Principal : NIL
III. Derivative Instruments (causing an unhedged Foreign Currency
exposure) N I L
k. Investments
i. Investments are of long term nature and are stated at cost of
acquisition, less any diminishing in the value other than
temporary.
ii. The investments in Companies under the same management and its
subsidiaries whose shares are unquoted are valued at cost. The
Management is of the opinion that there is no diminishing value on
these Investments.
l. Borrowing Cost
Interest & other borrowing costs on specific borrowings relatable to
the qualifying assets are capitalised. Other interests and borrowing
costs are charged to Revenue.
m. Cash Flow Statement
The Cash Flow statement is prepared by the indirect method set out in
Accounting Standard - 3 on Cash Flow Statement and presents cash flows
by operating, investing and financing activities of the Company. Cash
and cash equivalents presented in the Cash Flow statement consists of
cash in hand and demand deposits with banks as on the Balance Sheet date.
n. Provisions
A provision is recognised when there is a present obligation as a
result of past event, it is probable that an outflow of resources will
be required to settle the obligations and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the year end date. These are reviewed at each year end
date and adjusted to reflect the best current estimate.
o. Segment Reporting
The Group is engaged in the business of production of steel products
which in the opinion of the management is considered the only business
segment in the context of Accounting Standard -17 on Segmental
Reporting. Also, the Croup does not consider any significant difference
as regards the risks and returns of the product with reference to
export and domestic sales. Therefore, Segment information as required
by Accounting Standard - 1 7 is not applicable.
p. Related Parties and Key Management Personnel Disclosure
A. Name of the Party and the relationship
T PSL Corrosion Control Services ItcT. : 100% Subsidiary Company
ii. Pipeline Systems Ltd., Mauritius : 100% Subsidiary Company
iii. PSL USA INC., Delaware, USA : 100% Subsidiary Company
iv. BHI Ltd.
v. Broken Hills International Ltd.
vi. Eurocoustic Products Ltd. Companies in which control
exists directly/ indirectly
vii. Punj International Pvt. Ltd.
viii. Punj Investments Pvt. Ltd.
ix. Punj Corporation Private Limited
x. PSL FZE, Sharjah. : 100% Subsidiary Company
of Pipeline Systems Ltd.,
Mauritius
xi. PSL North America LLC. : JV Company of PSL USA
INC, Delware, USA, (78%
holding)
Ashok Punj : Managing Director
M. M. Mathur : Director
R. K. Bahri : Director
G. S. Sauhta : Director
D. N. Sehgal : Director
S. P. Bhatia : Director
C. K. Goel : Director
G. Gehani : Director & Co. Secretary
q. Lease
Operating lease payments are recognized as expenditure in the Profit
and Loss Account on a straightline basis, which is representative of
the time pattern of benefits received from the use of assets taken on
lease. Lease rentals in respect of operating lease are recognized as
income over the lease period.
r. Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amount of assets and liabilities and
disclosure of contingent liabilties on the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates and
the differences between actual results and estimates are recognised in
the periods in which the results are known / materialize.
s. Accounting for Taxes on Income
Income Taxes are accounted for in accordance with Accounting Standard
22 on Accounting for taxes on income. Income taxes comprise both
current and deferred tax.
Current tax is measured at the amount expected to be paid to /
recovered from the revenue authorities, using applicable tax rates and
laws. The company offsets advance payments and provisions for current
tax and disclose the net amount it intends to settle and where it has a
legally enforceable right to set off the recognised amount.
The tax effect of the timing differences that result between taxable
income and accounting income and are capable of reversal in one or more
subsequent periods are recorded as a deferred tax assest or a deferred
tax liability. Deferred tax assests and liabilities are recognized for
future tax consequences attributable to timing differences.
They are measured using the substantively enacted tax rates and tax
regulations.
The carrying amount of deferred tax assets at each Balance Sheet date
is reduced to the extent that it is no longer reasonably certain that
sufficient future taxable income will be available against which the
deferred tax assests can be realized.
t. Sundry Debtors/Loans & Advances
Sundry Debtors, Creditors and other advances are subject to
confirmation. The effect of the same, if any, which is not likely to be
material, will be adjusted at the time of confirmation. Sundry
Creditors for purchases includes Rs.10199.11 Lacs being buyers credit
availed by the Company for the purchase of Raw Materials/ Capital
Goods.
u. Impairment of Assets:
In the opinion of the companys Management , there is no impairment to
the assets to which Accounting Standard-28 "Impairment of Assets"
applied requiring any revenue recognition.
v. Contingent liabilities
Contingent liabilities as defined in Accounting Standard 29 are
disclosed in the notes to accounts. Provisions are made if it became
probable that an outflow of future economic benefits will be required
for an item previously dealt with as a contingent liability.
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