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Notes to Accounts of Ratnamani Metals & Tubes Ltd.

Mar 31, 2023

Loans are non-derivative financial assets which generate a fixed interest income for the Company. The carrying value may be affected by changes in the credit risk of the counterparties.

Fair value disclosures for financial assets and liabilities (refer note-33.1)

Fair value hierarchy disclosures for investment (refer note-33.2)

For Financial instruments risk management objectives and policies (refer note-34)

* During the year, the Company acquired 53% equity shares in Ravi Technoforge Private Limited (hereinafter called "RTL") for a cash consideration of '' 9,788.16 Lakh. Pursuant to the agreement, the non-controlling shareholders of RTL are obligated to enter into a forward contract to sell 27.02% of their stake to the Company between April 1 2024 and May 31 2024. The option price formula for determining the sale price remains the same as specified in the agreement. Furthermore, the non-controlling shareholders have the discretion to sell the remaining 19.98% equity shares at any time until May 31 2027. The option price formula for this put option remains consistent with the terms outlined in the agreement.

Proposed dividends on equity shares are subject to approval at the ensuing Annual General Meeting and are not recognised as a liability as at March 31.

The Board had recommended a Dividend of '' 14.00 per Equity Share (i.e. @ 700%) on 4,67,28,000 Equity Shares of '' '' 2.00 each (prebonus) to the members, which translates into dividend of '' 9.33 per equity share, having face value of '' 2/- each (post-bonus), for the financial year ended on March 31,2022. Additional amount of '' 0.05 Lakh has been paid on account of rounding off differences.

The Board of Directors at its meeting held on May 10, 2023, proposed dividend of '' 12.00 (600%) per equity share of the face value of '' 2 each for the financial year 2022-23, subject to the approval of shareholders in ensuing Annual General Meeting.

The Company declares and pays dividend in Indian rupees in accordance with its dividend distribution policy. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividend outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

a) Long Term Borrowings are secured by - i) a first pari passu charge on entire manufacturing movable fixed assets; ii) a first pari passu mortgage and charge on immovable properties situated at Indrad, Kadi and Anjar, Kutch all in the State of Gujarat; iii) a second pari passu charge on entire current assets in the form of inventories, book-debts and all other movable assets.

External (Foreign) Commercial Borrowing of '' 5,356.94 Lakhs (March 31,2022''8,890.75) carry interest @ 3M Libor plus 100 basis point. The loan is repayable in 16 quarterly instalments between July 29, 2020 till April 29, 2024.

Term Loan of '' 4,687.50 Lakhs (March 31, 2022''5,937.50) carry interest @ 3M MCLR plus 15 basis point. The loan is repayable in 24 equal quarterly instalments between March 31, 2021 till December 31, 2026.

b) Short term Borrowings are secured by - i) a first pari passu charge on entire current assets in the form of inventories, book-debts, all other movable assets; ii) a second pari passu charge on entire manufacturing movables fixed assets; iii) a second pari passu mortgage and charge on immovable properties situated at Indrad, Kadi and Anjar, Kutch all in the State of Gujarat; iv) a Negative Lien on the agricultural lands, pending conversion to the non-agriculture status; v) a Negative Lien on leasehold interest on the immovable properties situate at GIDC Estate Chhatral, Taluka Kalol, District Gandhinagar.

Short term Borrowings from banks carries interest in the range of 0 to 12 month MCLR plus 25 to 50 basis point.

c) The bank overdrafts are secured by a portion of the Company''s fixed deposits which carry interest @ 6.05% p.a (March 31, 2022: 3.80% to 5.00%). The borrowings are payable on demand.

d) At March 31 2023, the Company has available fund based working capital limits from consortium banks and term loan aggregating to '' 14,900.00 Lakhs (March 31, 2022: '' 14,900.00 Lakhs) of undrawn committed borrowing facilities.

e) The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

f) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

g) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

h) Term loans were applied for the purpose for which the loans were obtained.

26 COMMITMENTS AND CONTINGENCIES

a) Leases

Operating lease commitments — Company as lessee

The Company has entered into lease contracts for office premises, land and other properties on lease, with lease terms between one to ninety years. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

The Company also has certain leases of office premises, land and other properties with lease terms of 12 months or less with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year.

('' in Lakhs)

Description

Leasehold

land

Office

Premises

Total

As at April 1, 2021

36.40

941.15

977.55

Additions during the year

-

-

-

Depreciation and Amortisation Expenses

3.08

138.75

141.83

As at March 31, 2022

33.32

802.40

835.72

Additions during the year

384.89

-

384.89

Depreciation and Amortisation Expenses

5.43

138.75

144.18

As at March 31, 2023 |

412.78

663.65

1,076.43

Set out below are the carrying amounts of lease liabilities and the movements during the period:

('' in Lakhs)

Description

2022-23

2021-22

As at April 1

918.38

1,008.98

Additions

56.22

-

Finance Costs incurred during the year

78.75

81.80

Payments of lease liabilities

(191.67)

(172.40)

As at March 31

861.68

918.38

Current

111.23

112.91

Non-current

750.45

805.47

The effective interest rate for lease liabilities is 8.45 % to 9.30%, with maturity between 2021-2112.

The following are the amounts recognised in profit or loss:

('' in Lakhs)

Description

Year Ended March 31, 2023

Year Ended March 31, 2022

Depreciation and Amortisation Expenses

144.18

141.83

Interest expense on lease liabilities

78.75

81.80

Expense relating to short-term leases

272.07

241.61

Total amount recognised in statement of profit or loss

495.00

465.24

The Company had total cash outflows for leases of '' 191.67 Lakhs (March 31,

2022''172.40 Lakhs).

b) Contingent Liabilities :-

('' in Lakhs)

Sr.

Particulars

As at

As at

No.

March 31, 2023

March 31, 2022

a)

ESI Liability (excluding interest leviable, if any)

485.61

463.32

b)

Disputed statutory claims/levies for which the Company/department has preferred appeal in respect of (excluding interest leviable, if any):

- Excise/Custom duty/Service Tax (note-i)

4,268.78

4,334.83

- Income Tax

52.35

-

c)

Differential amount of custom duty in respect of machinery purchased under EPCG scheme (note-ii)

101.52

466.70

d)

Differential amount of custom duty in respect of Advance license (note-ii)

295.86

239.86

Note-(i) Excise/Custom duty/Service Tax demand comprise various demands from the Excise/Custom/Service Tax Authorities for

payment of '' 4,268.78 Lakhs (March 31,2022''4,334.83 Lakhs). The Company has filed appeals against these demands. The Company is confident that the demands are likely to be deleted and accordingly no provision for liability has been recognized in the financial statements.

Note-(ii) The Company has imported capital goods under the EPCG scheme to utilize the benefit of zero or concessional custom duty rate. Also, the Company has imported raw materials under the advance licence scheme. These benefits are subject to future exports within stipulated time.

c) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for '' 7,425.17 Lakhs (March 31, 2022''4,174.26 Lakhs).

27 The Company has incurred premium expenses of '' 139.83 Lakhs (March 31,2022''139.83 Lakhs) on Key Man Insurance Policy and term plan policy of Chairman and Managing Director, Joint Managing Director and Whole-Time Director, which is included in insurance expenses.

28 During the year ended March 31, 2023 '' 1,084.63 Lakhs (March 31, 2022 '' 261.82 Lakhs) was recognised as an expense for inventories carried at net realisable value.

29 Segment Information

The Company has presented segment information in the consolidated financial statements which are presented in the same annual report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ''Operating Segments'', no disclosures related to segments are presented in these standalone financial statements.

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31 2023 and March 31 2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken at each financial year through examining the financial position of the related party and the market in which the related party operates.

Pursuant to the recommendation by the Board in its meeting held on May 18, 2022, and approval granted by the Shareholders of the Company on June 22, 2022 by Postal Ballot through remote e-voting, the Company has issued 2,33,64,000 fully paid-up bonus equity shares having face value of '' 2/-each in the ratio of 1:2 i.e. one bonus equity share for two fully paid up equity shares. Consequent to the bonus issue, the total paid-up share capital has increased to '' 1,401.84 Lakh from '' 934.56 Lakh. Accordingly, as per Ind AS 33 - Earning per share, the calculation of basic and diluted earnings per share for previous period presented has been adjusted and restated.

The cumulative effective portion of gains or losses arising from changes in fair value of hedging instruments designated as cash flow hedges are recognised in cash flow hedge reserve. Such changes recognised are reclassified to the statement of profit and loss when the hedged item affects the profit or loss or are included as an adjustment to the cost of the related non-financial hedged item. The Company has designated certain foreign currency forward contracts, interest rate swaps and interest rate caps and collars as cash flow hedges in respect of foreign exchange and interest rate risks.

33.2Category-wise Classification of Financial Instruments:

The financial instruments are categorised in to three levels, based on the inputs used to arrive at fair value measurement as described bellow :

- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observable.

- Level 3 — Inputs based on unobservable market data.

Valuation Methodology

Financial instruments are initially recognised and subsequently re-measured at fair value as described below :

The fair value of investment in quoted Mutual Funds is measured at quoted price/ NAV.

The derivatives are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity.

Fair value of put option is valued based on the valuation report

34 Financial instruments risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations. The Company''s principal financial assets include investments, loans given, trade and other receivables and cash & term deposits that derive directly from its operations.

The Company''s activities expose it to market risk, credit risk and liquidity risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Company''s risk management is carried out by the corporate finance under policies approved by the Board of directors. The corporate finance identifies, evaluates and hedges financial risks in close co-operation with the Company''s Business Heads. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity.

The corporate finance function reports quarterly to the Company''s Audit committee, that monitors risks and policies framed to mitigate risk exposures.

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, deposits, Investments, trade and other receivables, trade and other payables and derivative financial instruments.

The potential economic impact, due to these assumptions and current situation, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of Profit and Loss may differ materially from these estimates due to actual developments in the global financial markets.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to changes in market interest rates due to financing, investing and cash management activities. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligations with floating interest rates and period of borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowing. In certain cases the Company enters into interest rate swap contracts or interest rate future contracts to manage its exposure to changes in the underlying benchmark interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s profit and equity for the year ended March 31,2023 would (decrease)/increase by '' 27.33 Lakhs (March 31,2022: '' 33.58 Lakhs). This is mainly attributable to variable interest rates on long term borrowings.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognised underlying assets/liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and bonds. The Company is exposed to price risk arising mainly from investments in mutual funds recognised at FVTPL. As at March 31 2023 the carrying value of such instruments recognised at FVTPL amounts to '' 13,512.37 Lakhs (March 31 2022''10,854.48 Lakhs). The details of such investments in mutual funds is given in note 4.

The management expects that the exposure to risk of changes in market rates of these mutual funds is minimal.

(b) Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments. Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

Concentrations of Credit Risk form part of Credit Risk

During the year ended March 31, 2023, sales to a customer approximated '' 65,076.55 Lakhs (or 14.89 % of net revenue) and during the year ended March 31 2022, sales to such customer approximated '' 51,451.98 Lakhs (or 16.39 % of net revenue). Accounts receivable from such customer approximated '' 24,607.63 Lakhs (or 25.45 % of total receivables) at March 31, 2023 and '' 5,164.63 Lakhs (or 8.60 % of total receivables) at March 31, 2022. A loss of this customer could significantly affect the operating results or cash flows of the Company.

The Company generally extends a credit period of 0 to 180 days.

(c) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including, debt and overdraft / credit facilities from both domestic and international banks at an optimised cost. It also enjoys strong access to domestic capital markets across equity.

35 Capital Management

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value through efficient allocation of capital towards expansion of business, optimisation of working capital requirements and deployment of surplus funds into various investment options.

The Company estimates the amount of capital required on the basis of annual business and long term operating plans which includes capital and other strategic investments. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

As at March 31, 2023, the Company meets its capital requirement through equity and borrowings from banks. The Company monitors its capital and debt on the basis of debt to equity ratio.

38 The code of Social Security, 2020 (''Code'') relating to employee benefits during the employment and post-employment received Presidential assent in September 2020 and its effective date is yet to be notified. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the financial impact once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective.

39 The search operations were carried out by the Income Tax Department at the Offices & Plants of the Company during the period from November 23, 2021, to November 27, 2021. The company does not foresee any material impact on the current or future business operations on outcome thereof.

40 Events after the reporting period

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May 10, 2023, other than those disclosed and adjusted elsewhere in these financial statements, there were no further subsequent events to be reported or recognised.

42 Other statutory information

i) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

ii) No proceedings have been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act,1988 (45 of 1988) and rules made thereunder.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries."

v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

vii) The Company does not have any transactions with companies which are struck off.

viii) The Company has not entered with any Scheme(s) of arrangement in terms of sections 230 to 237 of the Companies Act, 2013.

43 Figures of previous year''s have been regrouped, wherever considered necessary to make them comparable to current year''s figures.


Mar 31, 2022

Loans are non-derivative financial assets which generate a fixed interest income for the Company. The carrying value may be affected by changes in the credit risk of the counterparties.

Fair value disclosures for financial assets and liabilities (refer note-33.1)

Fair value hierarchy disclosures for investment (refer note-33.2)

For Financial instruments risk management objectives and policies (refer note-34)

Deposits aggregating to '' 2,115.00 Lakhs (March 31,2021: '' 2,115.00 Lakhs) are pledged / lien against bank overdraft facility. There are no loans or advances in the nature of loans granted to Promoters, Directors, KMPs and their related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, that are:

a) repayable on demand; or

b) without specifying any terms or period of repayment.

Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of '' 2/- per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupee. The dividend proposed by the Board of Directors is subject to approval of the Shareholders at the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by Share holders.

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatory transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

The Company uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, currency swaps, and interest rate swaps. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedge reserve. Amounts recognised in the cash flow hedge reserve is reclassified to the statement of profit or loss when the hedged item affects profit or loss.

Proposed dividends on equity shares are subject to approval at the ensuing Annual General Meeting and are not recognised as a liability as at March 31.

The Board of Directors at its meeting held on May 18, 2022, proposed a dividend of '' 14.00 per share having face value of '' 2.00 (pre-bonus), which translates into final dividend of '' 9.33 per equity share having face value of ''2.00 (post-bonus) for the year ended March 31,2022, subject to approval by the members of the Company.

The Company declares and pays dividend in Indian rupees in accordance with its dividend distribution policy. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividend outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

a) Long Term Borrowings are secured by - i) a first pari passu charge on entire manufacturing movable fixed assets; ii) a first pari passu mortgage and charge on immovable properties situated at Indrad, Kadi and Anjar, Kutch all in the State of Gujarat; iii) a second pari passu charge on entire current assets in the form of inventories, book-debts and all other movable assets.

External (Foreign) Commercial Borrowing of '' 8,890.75 Lakhs (March 31,2021 '' 12,452.16) carry interest @ 3M Libor plus 100 basis point. The loan is repayable in 16 quarterly instalments between July 29, 2020 till April 29, 2024.

Term Loan of '' 5,937.50 Lakhs (March 31, 2021 '' 7,187.50) carry interest @ 3M MCLR plus 15 basis point. The loan is repayable in 24 equal quarterly instalments between March 31,2021 till December 31,2026.

b) Short term Borrowings are secured by - i) a first pari passu charge on entire current assets in the form of inventories, book-debts, all other movable assets; ii) a second pari passu charge on entire manufacturing movables fixed assets; iii) a second pari passu mortgage and charge on immovable properties situate at Indrad, Kadi and Anjar, Kutch all in the State of Gujarat; iv) a Negative Lien on the agricultural lands, pending conversion to the non-agriculture status; v) a Negative Lien on leasehold interest on the immovable properties situate at GIDC Estate Chhatral, Taluka Kalol, District Gandhinagar. Short term Borrowings from banks carries interest in the range of 0 to 12 month MCLR plus 25 to 50 basis point.

c) The bank overdrafts are secured by a portion of the Company’s fixed deposits which carry interest at 3.80% to 5.00% p.a (March 31,2021: 5.00 %). The borrowings are payable on demand.

d) At March 31, 2022, the Company has available fund based working capital limits from consortium banks and term loan aggregating to '' 14,900.00 Lakhs (March 31,2021: '' 22,320.39 Lakhs) of undrawn committed borrowing facilities.

e) The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

f) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

g) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

h) Term loans were applied for the purpose for which the loans were obtained.

18.4 Performance obligation

Information about the Company’s performance obligations are summarised below:

Steel tubes and pipes

The performance obligation is satisfied upon delivery of the goods and control thereof is assumed by the customers and payment gets due as contractually agreed, generally ranging within 0 to 180 days from delivery, backed up by financials arrangements in certain cases.

Power generated from windmills

The performance obligation from windmills is recognised on unit generation basis, in accordance with the terms of power purchase agreements.

B. Defined benefit plans:

The Company operates gratuity plan in the nature of defined benefit plan wherein every employee is entitled to the benefit as per scheme of the Company, for each completed year of service. The same is payable on retirement or termination whichever is earlier. The benefit vests only after five years of continuous service. The gratuity plan is governed by the payment of Gratuity Act,1972. The Company’s gratuity plan is funded with Life Insurance Corporation of India and HDFC life.

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.

E3 COMMITMENTS AND CONTINGENCIES a) Leases

Operating lease commitments - Company as lessee

The Company has entered into lease contracts for office premises, land, guest house and other properties on lease, with lease terms between one to nine years. Generally, the Company is restricted from assigning and subleasing the leased assets. There are several lease contracts that include extension and termination options and variable lease payments, which are further discussed below.

The Company also has certain leases of office premises, land and other properties with lease terms of 12 months or less with low value. The Company applies the ''short-term lease’ and ''lease of low-value assets’ recognition exemptions for these leases.

Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year.

b) Contingent Liabilities :-

('' in Lakhs)

Sr.

No.

Particulars

As at

31st March, 2022

As at

31st March, 2021

a)

ESI Liability (excluding interest leviable, if any)

463.32

444.32

b)

Disputed statutory claims/levies for which the Company/ Department has preferred appeal in respect of (excluding interest leviable, if any):

- Excise/Custom duty (note-i)

4,334.83

494.91

c)

Differential amount of custom duty in respect of machinery purchased under EPCG scheme (note-ii)

466.70

-

d)

Different amount of custom duty in respect of Advance license (note-ii)

239.86

-

Note-(i) Excise/Custom duty demand comprise various demands from the Excise/Custom Authorities for payment of '' 4,334.83 Lakhs (March 31, 2021 '' 494.91 Lakhs). The Company has filed appeals against these demands. The Company is confident that the demands are likely to be deleted and accordingly no provision for liability has been recognised in the financial statements.

Note-(ii) The Company has imported capital goods under the EPCG scheme to utilise the benefit of zero or concessional custom duty rate. Also, the Company has imported raw materials under the advance licence scheme. These benefits are subject to future exports within stipulated time.

c) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for

'' 4,174.26 Lakhs (31st March, 2021 '' 3,246.68 Lakhs).

| The Company has incurred premium expenses of '' 139.83 Lakhs (March 31,2021 '' 171.62 Lakhs) on Key Man Insurance Policy and term plan policy of Chairman and Managing Director, Joint Managing Director and Whole-Time Director, which is included in insurance expenses.

8| During the year ended March 31,2022''261.82 Lakhs (March 31,2021 '' 527.54 Lakhs) was recognised as an expense for inventories carried at net realisable value.

EB! SEGMENT INFORMATION

The Company is engaged in manufacturing of Steel Tubes and Pipes. Considering the nature of Company’s business and operations, as well as based on reviews of operating results by the chief operating decision makers to make decisions about resource allocation and performance measurement, the Company has identified "Steel Tubes and Pipes" as only reportable segment in accordance with the requirements of ''Ind AS 108 - Operating Segments’.

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31,2022 and March 31,2021, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken at each financial year through examining the financial position of the related party and the market in which the related party operates.

33.2 Category-wise Classification of Financial Instruments:

The financial instruments are categorised in to three levels, based on the inputs used to arrive at fair value measurement as described bellow:

- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

- Level 3 - Inputs based on unobservable market data.

Valuation Methodology

Financial instruments are initially recognised and subsequently re-measured at fair value as described below :

The fair value of investment in quoted Mutual Funds is measured at quoted price/ NAV.

The derivatives are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity.

(b) Financial Instruments measured at Amortised Cost

The management assessed that cash and cash equivalents, other bank balances, trade receivables, other financial assets, trade payables, bank overdrafts, investments and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

1341 FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities, other than derivatives, comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s principal financial assets include investments, loans given, trade and other receivables and cash & term deposits that derive directly from its operations.

The Company’s activities expose it to market risk, credit risk and liquidity risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Company’s risk management is carried out by the corporate finance under policies approved by the Board of directors. The corporate finance identifies, evaluates and hedges financial risks in close co-operation with the Company’s Business Heads.

The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity.

The corporate finance function reports quarterly to the Company’s Audit committee, that monitors risks and policies framed to mitigate risk exposures.

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, deposits, Investments, trade and other receivables, trade and other payables and derivative financial instruments.

The potential economic impact, due to these assumptions and current situation, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of Profit and Loss may differ materially from these estimates due to actual developments in the global financial markets.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to changes in market interest rates due to financing, investing and cash management activities. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligations with floating interest rates and period of borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowing. In certain cases Company enters into interest rate swap contracts or interest rate future contracts to manage its exposure to changes in the underlying benchmark interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s profit and equity for the year ended March 31,2022 would (decrease)/increase by '' 33.58 Lakhs (March 31,2021: '' 33.35 Lakhs). This is mainly attributable to variable interest rates on long term borrowings.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognised underlying assets/liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above table represents total exposure of the Company towards foreign exchange denominated assets and liabilities. The details of exposures hedged using forward exchange contracts are given as a part of note 32.

The Company is mainly exposed to changes in USD and EURO. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD and EURO against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 1% represents management’s assessment of reasonably possible change in foreign exchange rate.

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and bonds. The Company is exposed to price risk arising mainly from investments in mutual funds recognised at FVTPL. As at March 31,2022 the carrying value of such instruments recognised at FVTPL amounts to '' 10,854.48 Lakhs (March 31,2021 '' 63,651.31 Lakhs). The details of such investments in mutual funds is given in note 4.

The management expects that the exposure to risk of changes in market rates of these mutual funds is minimal.

(b) Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments. Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

Concentrations of Credit Risk form part of Credit Risk

During the year ended March 31,2022, sales to a customer approximated '' 51,451.98 Lakhs (or 16.39 % of net revenue) and during the year ended March 31,2021, sales to such customer approximated '' Nil Lakhs (or Nil % of net revenue). Accounts receivable from such customer approximated '' 5,164.63 Lakhs (or 8.60 % of total receivables) at March 31,2022 and '' Nil Lakhs (or Nil % of total receivables) at March 31,2021. A loss of this customer could significantly affect the operating results or cash flows of the Company.

(c) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including, debt and overdraft / credit facilities from both domestic and international banks at an optimised cost. It also enjoys strong access to domestic capital markets across equity.

B35H CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value through efficient allocation of capital towards expansion of business, optimisation of working capital requirements and deployment of surplus funds into various investment options.

The Company estimates the amount of capital required on the basis of annual business and long term operating plans which includes capital and other strategic investments. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

As at March 31, 2022, the Company meets its capital requirement through equity and borrowings from banks. The Company monitors its capital and debt on the basis of debt to equity ratio.

| The code of Social Security, 2020 (''Code'') relating to employee benefits during the employment and post-employment received Presidential assent in September 2020 and its effective date Is yet to be notified. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the financial impact once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective.

| The search operations were carried out by the Income Tax Department at the Offices & Plants of the Company during the period from Nov 23, 2021, to Nov 27, 2021. The Company has not received any further communication or order from the department. The company does not foresee any material impact on the current or future business operations.

EE1 EVENTS AFTER THE REPORTING PERIOD

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May 18, 2022, other than those disclosed and adjusted elsewhere in these financial statements, there were no further subsequent events to be reported or recognised.

HM OTHER STATUTORY INFORMATION

i) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

ii) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act,1988 (45 of 1988) and rules made thereunder.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

vii) The Company does not have any transactions with companies which are struck off.

viii) The Company has not entered with any Scheme(s) of arrangement in terms of sections 230 to 237 of the Companies Act, 2013.

2| Figures of previous year’s have been regrouped, wherever considered necessary to make them comparable to current year’s figures.


Mar 31, 2021

33.2 Category-wise Classification of Financial Instruments:

The financial instruments are categorised in to three levels, based on the inputs used to arrive at fair value measurement as described bellow:

- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

- Level 3 - Inputs based on unobservable market data.

Valuation Methodology

Financial instruments are initially recognised and subsequently re-measured at fair value as described below :

The fair value of investment in quoted Mutual Funds is measured at quoted price/ NAV.

The derivatives are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity.

(b) Financial Instruments measured at Amortised Cost

The management assessed that cash and cash equivalents, other bank balances, trade receivables, other financial assets, trade payables, bank overdrafts, investments and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

B34I FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities, other than derivatives, comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company’s operations and to support its operations. The Company’s principal financial assets include investments, loans given, trade and other receivables and cash & term deposits that derive directly from its operations.

The Company’s activities expose it to market risk, credit risk and liquidity risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Company’s risk management is carried out by the corporate finance under policies approved by the Board of directors. The corporate finance identifies, evaluates and hedges financial risks in close co-operation with the Company’s Business Heads. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity.

The corporate finance function reports quarterly to the Company’s Audit committee, that monitors risks and policies framed to mitigate risk exposures.

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, deposits, Investments, trade and other receivables, trade and other payables and derivative financial instruments.

The potential economic impact, due to these assumptions and current situation, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of Profit and Loss may differ materially from these estimates due to actual developments in the global financial markets.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to changes in market interest rates due to financing, investing and cash management activities. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligations with floating interest rates and period of borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowing. In certain cases company enters into interest rate swap contracts or interest rate future contracts to manage its exposure to changes in the underlying benchmark interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s profit and equity for the year ended 31st March, 2021 would (decrease)/increase by '' 33.35 Lakhs (31st March, 2020: '' 2.82 Lakhs). This is mainly attributable to variable interest rates on long term borrowings.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognised underlying assets/liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and bonds. The Company is exposed to price risk arising mainly from investments in mutual funds recognised at FVTPL. As at 31st March, 2021, the carrying value of such instruments recognised at FVTPL amounts to '' 63,651.31 Lakhs (31st March, 2020 '' 15,483.64 lakhs). The details of such investments in mutual funds is given in note 4.

The management expects that the exposure to risk of changes in market rates of these mutual funds is minimal.

(b) Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments. Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

Concentrations of Credit Risk form part of Credit Risk

During the year ended 31st March, 2021, sales to a customer approximated '' 14,843.96 lakhs (or 6.46 % of net revenue) and during the year ended 31st March, 2020, sales to such customer approximated '' 44,929.56 lakhs (or 17.39 % of net revenue). Accounts receivable from such customer approximated '' 602.77 lakhs (or 1.50% of total receivables) at 31st March, 2021 and '' 3,378.06 lakhs (or 9.13% of total receivables) at 31st March, 2020. A loss of this customer could significantly affect the operating results or cash flows of the Company.

The Company generally extends a credit period of 0 to 180 days.

(c) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including, debt and overdraft / credit facilities from both domestic and international banks at an optimised cost. It also enjoys strong access to domestic capital markets across equity.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual payments:

1351 CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value through efficient allocation of capital towards expansion of business, optimisation of working capital requirements and deployment of surplus funds into various investment options.

The Company estimates the amount of capital required on the basis of annual business and long term operating plans which includes capital and other strategic investments. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

B37I IMPACT ASSESSMENT ON COVID-19 OUTBREAK

On 24th March, 2020, the Government of India ordered a nationwide lockdown to prevent community spread of COVID-19 in India resulting in significant reduction in economic activities. The Company has considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of property, plant and equipment, investments, inventories, receivables and other current assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions including conditions in India because of this pandemic, the Company, as at the date of approval of these financial results has used internal and external sources on the expected future performance of the Company. The Company has performed sensitivity analysis on the assumptions used and based on current estimates expects the carrying amount of these assets are fully recoverable. The Company believes that impact of COVID-19 on the Company’s financial statement is not material.

H The code of Social Security, 2020 (''Code’) relating to employee benefits during the employment and post-employment received Presidential assent in September 2020 and its effective date Is yet to be notified. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13th November, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the financial impact once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective.

B39I EVENTS AFTER THE REPORTING PERIOD

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of 2nd June, 2021, other than those disclosed and adjusted elsewhere in these financial statements, there were no further subsequent events to be reported or recognised.

0. Figures of previous year’s have been regrouped, wherever considered necessary to make them comparable to current year’s figures.


Mar 31, 2018

1.EMPLOYEE BENEFITS EXPENSE

A. Defined contribution plans:

Amount of Rs, 626.08 Lacs (31st March, 2017: Rs, 587.81 Lacs) is recognized as expenses and included in note no. 22 "Employee benefits expense".

B. Defined benefit plans:

The Company operates gratuity plan in the nature of defined benefit plan wherein every employee is entitled to the benefit as per scheme of the Company, for each completed year of service. The same is payable on retirement or termination whichever is earlier. The benefit vests only after five years of continuous service. The gratuity plan is governed by the payment of Gratuity Act,1972. The Company''s gratuity plan is funded with Life Insurance Corporation of India.

note-(i) Excise/Custom duty demand comprise various demands from the Excise/Custom Authorities for payment of Rs, 3,360.65 Lacs (31st March, 2017 Rs, 3,282.17 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 deleted and accordingly no provision for liability has been recognized in the financial statements.

b) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs, 15,860.42 Lacs (31st March, 2017 Rs, 1,004.31 Lacs).

2. The Company has incurred premium expenses of Rs, 138.41 Lacs (31st March, 2017 Rs, 140.21 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.

3. SEGMENT INFORMATION Operating Segments:

The Company is engaged in the business of Steel Tubes and Pipes and generation of power by Windmills. In accordance with the requirements of Ind AS 108 "Operating Segments" Company has identified these two segments as reportable segments.

Identification of Segments:

The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.

Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure (net of allocable income).

Segment Assets and Liabilities:

Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipments, trade receivables, inventory and other operating assets. Segment liabilities primarily includes trade payable and other liabilities. Common assets and liabilities which can not be allocated to any of the business segment are shown as unallocable assets / liabilities.

Inter Segment transfer:

Inter Segment revenues are recognized at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the Company level.

Revenue from one customer amounted to Rs, 27,931.98 Lacs (31st March, 2017: Rs, 48,947.90 Lacs), arising from sales in the Steel Tubes and Pipes segment.

4. RELATED PARTY DISCLOSURES

As required by Indian Accounting Standard - 24 "Related Parties Disclosures", the disclosure of transactions with related parties are given below :

A Relationships

(a) Wholly Owned Foreign 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

Mr. Divyabhash C. Anjaria - Director

Mr. Pravinchandra M. Mehta - Director

Dr. Vinod M. Agrawal - Director

Smt. Nidhi G. Gadhecha - 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 P Sanghvi (Son of Mr. Prakash M. Sanghvi)

Mr. Jigar P 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.

Comfit Valves Private Limited.

Ratnamani Techno Casts Private Limited.

Shree Mahavir Education Trust.

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March 2018 the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March 2017: Rs, Nil). This assessment is undertaken at each financial year through examining the financial position of the related party and the market in which the related party operates.

(b) Financial Instruments measured at Amortized Cost

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

5. FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations. The Company''s principal financial assets include investments, loans given, trade and other receivables and cash and short-term deposits that derive directly from its operations.

The Company''s activities expose it to market risk, credit risk and liquidity risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Company''s risk management is carried out by the corporate finance under policies approved by the Board of Directors. The corporate finance identifies, evaluates and hedges financial risks in close co-operation with the Company''s Business Heads. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

The corporate finance function reports quarterly to the Company''s Audit Committee, that monitors risks and policies framed to mitigate risk exposures.

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, deposits, investments, trade and other receivables, trade and other payables and derivative financial instruments.

The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of Profit and Loss may differ materially from these estimates due to actual developments in the global financial markets.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. The Company has not used any interest rate derivatives.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognized underlying assets/liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above table represents total unhedged exposure of the Company towards foreign exchange denominated assets and liabilities. The details of exposures hedged using forward exchange contracts are given as a part of note-31.

The Company is mainly exposed to changes in USD. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 1% represents management''s assessment of reasonably possible change in foreign exchange rate.

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and bonds. The Company is exposed to price risk arising mainly from investments in mutual funds recognized at FVTPL. As at 31st March 2018, the carrying value of such instruments recognized at FVTPL amounts to Rs, Nil Lacs (31st March 2017 Rs, 7,383.08 Lacs). The details of such investments in mutual funds is given in note-4.

The management expects that the exposure to risk of changes in market rates of these mutual funds is minimal.

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments. Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the international credit rating agencies.

Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

Concentrations of Credit risk form part of Credit risk

During the year ended 31st March, 2018, sales to a customer approximated Rs, 27,931.98 Lacs or 15.61 % of net revenue and during the year ended 31st March 2017, sales to such customer approximated Rs, 48,947.90 Lacs or 35.72 % of net revenue. Accounts receivable from such customer approximated Rs, 18,040.55 Lacs at 31st March, 2018 and Rs, 20,789.94 Lacs at 31st March, 2017. A loss of this customer could adversely affect the operating results or cash flows of the Company.

(c) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including, debt and overdraft / credit facilities from both domestic and international banks at an optimized cost. It also enjoys strong access to domestic capital markets across equity.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted

6. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value through efficient allocation of capital towards expansion of business, optimization of working capital requirements and deployment of surplus funds into various investment options.

As at 31st March, 2018, the Company meets its capital requirement through equity and has low debts. Consequent to such capital structure, there are no externally imposed capital requirements.

In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business, based on its long term financial plans.

The management of the Company reviews the capital structure of the Company on regular basis. As part of this review, the Board considers the cost of capital and the risks associated with the movement in the working capital.

7. CHANGES IN ACCOUNTING POLICIES AND DISCLOSUERS New and amended standards and interpretations

The Company applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2017. The nature and the impact of each amendment is described below:

Amendments to Ind AS 7 Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative period in Cash Flow Statement.

Standards issued but not yet effective

AS 115-Revenue from Contracts with Customers:

Ind AS 115 was notified on 28th March, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. Ind AS 115 is effective for the Company in the first quarter of fiscal 2019 using either one of two methods: (i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or (ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1st April, 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Company''s considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements. The Company has established an implementation team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary.

A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

8. EVENTS OCCURRED AFTER THE BALANCE SHEET DATE

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of 22nd May, 2018, there were no subsequent events to be recognized or reported that are not already disclosed elsewhere in these financial statements.

9. Figures of previous year''s have been regrouped, wherever considered necessary to make them comparable to current year''s figures.


Mar 31, 2017

1. SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(a) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

Further details about gratuity obligations are given in note-26.

(b) Fair value measurement for financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. refer note-33 and 34 for further disclosures.

Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs, 2/- per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividend in Indian ''. The dividend proposed by the Board of Directors is subject to approval of the Shareholders at the ensuing Annual General Meeting.

For the current financial year 2016-17, the Company has proposed dividend of Rs, 5.50 per share to equity shareholder (declared in the previous financial year interim dividend of Rs, 5.50 per share)

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by Share holders.

Issued Share Capital

Equity shares of Rs, 2 each issued, subscribed and fully paid

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents legal ownerships of shares.

Securities premium reserve is used to record the premium on issue of shares. This reserve is utilized in accordance with the provisions of the Companies Act, 2013

Capital reserve is mainly used to record the reserves created on receipt of state/central subsidies and amounts forfeited towards the forfeited of Equity warrants issued. This reserve is utilized in accordance with the provisions of the Companies Act, 2013

Amalgamation reserve is used to record the reserves created on amalgamation of Ratnamani Engineering Ltd. and Ratnamani Fine Tubes Pvt. Ltd. This reserve is utilized in accordance with the provisions of the Companies Act, 2013

Proposed dividends on equity shares are subject to approval at the Annual General Meeting and are not recognized as a liability (including dividend distribution tax thereon).

a External (Foreign) Commercial Borrowing of Rs, Nil (31st March, 2016 Rs, 882.19 Lacs and 1st April, 2015 Rs, 1,663.57 Lacs) from ICICI Bank Ltd. Hong Kong branch is carrying interest @ 6M Libor 4.52% P.A. The loan is repayable in 12 half yearly installments of USD 6,66,666.67 each from 22nd July, 2011. The loan is secured by an exclusive charge over movable assets in respect of 3Layer PE Coating Line and Offline Welding & Finishing Lines for HSAW plant situated at Survey No. 474, Village Bhimasar, Tal. Anjar, Dist. Kutch.

b Short term Borrowings are secured by - i) Hypothecation of Inventories, Books Debts, all other movables;

ii) Second charge on Fixed Assets of the Company except, a) 8 wind mills along with related equipments/

machineries situated at Moti Sindholi, Kutch, Gujarat and, b) movable assets in respect of 3Layer PE Coating Line and Offline Welding & Finishing Lines for HSAW plant situated at Survey No.474,village Bhimasar, Tal. Anjar, Dist. Kutch; iii) Personal guarantees of Sh. Prakash M. Sanghvi, Chairman and Managing Director, Sh. Jayanti M. Sanghvi, Whole-time Director and Sh. Shanti M. Sanghvi, Whole-time Director, of the Company;

iv) Joint equitable mortgage of all immovable properties held as free-hold and leasehold lands of the Company, except:

a) Leasehold land related to 8 wind mills situated at Moti Sindholi, Kutch.

b) Lease hold land situated at 3306-09, GIDC Chhatral, Taluka Kalol.

c Sales Bills discounted aggregating to Rs, NIL (31st March, 2016 Rs, 1,430.90 Lacs and 1st April, 2015 Rs, 9,747.30 Lacs) have recourse to the Company and carries interest in the range of 9.30% to 10.01% and have maturity period of 3 weeks to 3 months. Sales Bills Discounted from banks are secured by personal guarantee of Sh. Prakash M. Sanghvi, Chairman and Managing Director of the Company.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

During the year ended 31st March, 2016, the Company has paid dividend to its shareholders. This has resulted in payment of dividend distribution tax (DDT) to the taxation authorities. The Company believes that dividend distribution tax represents additional payment to taxation authority on behalf of the shareholders. Hence dividend distribution tax paid is charged to equity.

There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosure have been made. The above information regarding Micro, Small and Medium Enterprise has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

# not due for credit to "Investors Education and Protection Fund"

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.

Note-(i) Consolidated tax payable to GIDC is demanded by GIDC, Chhatral notified under circular dated 9/7/2010 for levying and recovering "infrastructure up gradation fund" from the Company. The amount comprises of the per square meter charges towards infrastructure up gradation as well as interest and penalty thereupon. The Company has paid the demand in current year.

Note-(ii) Excise duty demand comprise various demands from the Excise Authorities for payment of Rs, 3,282.17 Lacs (31st March, 2016 Rs, 3,338.86 Lacs, 1st April, 2015 Rs,3,315.13 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 deleted and accordingly no provision for liability has been recognized in the financial statements.

b) Capital Commitment

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs, 1,004.31 Lacs (31st March, 2016 Rs,2,184.72 Lacs, 1st April, 2015 Rs,1,303.47 Lacs).

2. The Company has incurred premium expenses of Rs, 140.21 Lacs (31st March, 2016 Rs, 127.85 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.

3. SEGMENT INFORMATION Operating Segments:

The Company is engaged in the business of Steel Tubes and Pipes and generation of power by Windmills. In accordance with the requirements of Ind AS 108 "Operating Segments" Company has identified these two segments as reportable segments.

Identification of Segments:

The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.

Segment revenue and results:

The expenses and income which are not directly attributable to any business segment are shown as unallowable expenditure (net of allocable income).

Segment Assets and Liabilities:

Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipments, trade receivables, Inventory and other operating assets. Segment liabilities primarily includes trade payable and other liabilities. Common assets and liabilities which cannot be allocated to any of the business segment are shown as unallowable assets / liabilities.

Inter Segment transfer:

Inter Segment revenues are recognized at sales price. The same is based on market price and business risks. Profit or loss on inter segment transfer are eliminated at the Company level.

Revenue from one customer amounted to Rs, 48,947.90 Lacs (31st March, 2016: Rs, 35,327.27 Lacs), arising from sales in the Steel Tubes and Pipes segment.

4. RELATED PARTY DISCLOSURES

As required by Indian Accounting Standard - 24 "Related Parties Disclosures", the disclosure of transactions with related parties are given below :

A Relationships

(a) Wholly Owned Foreign 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

Mr. Divyabhash C. Anjaria - Director

Mr. Pravinchandra M. Mehta - Director

Dr. Vinod M. Agrawal - Director

Smt. Nidhi G. Gadhecha - 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 P. Sanghvi ( Son of Mr. Prakash M . Sanghvi )

Mr. Jigar P. 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.

Comfit Valves Private Limited.

Ratnamani Techno Casts Private Limited.

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March 2017 the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March 2016: Rs, Nil, 1st April 2015: Rs, Nil). This assessment is undertaken at each financial year through examining the financial position of the related party and the market in which the related party operates.

(b) Financial Instrument measured at Amortized Cost

The carrying amount of financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

5.FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations. The Company''s principal financial assets include Investments, loans given, trade and other receivables and cash & short-term deposits that derive directly from its operations.

The Company''s activities expose it to market risk, credit risk and liquidity risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Company''s risk management is carried out by the corporate finance under policies approved by the Board of Directors. The corporate finance identifies, evaluates and hedges financial risks in close co-operation with the Company''s Business Heads. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

The corporate finance function reports quarterly to the Company''s Audit Committee, that monitors risks and policies framed to mitigate risk exposures.

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, deposits, Investments, trade and other receivables, trade and other payables and derivative financial instruments.

The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of Profit and Loss may differ materially from these estimates due to actual developments in the global financial markets.

i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. The Company has not used any interest rate derivatives.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognized underlying assets/liabilities and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above table represents total exposure of the Company towards foreign exchange denominated assets and liabilities. The details of exposures hedged using forward exchange contracts are given as a part of note-32.

The Company is mainly exposed to changes in USD. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhinged exposure of the Company as at the reporting date. 1% represents management''s assessment of reasonably possible change in foreign exchange rate.

iii) Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments and bonds. The Company is exposed to price risk arising mainly from investments in mutual funds recognized at FVTPL. As at 31st March 2017, the carrying value of such instruments recognized at FVTPL amounts to Rs, 7,383.08 Lacs (31st March 2016 Rs, 2,421.83 Lacs and Rs, 2,335.48 Lacs 1st April, 2015). The details of such investments in mutual funds is given in note-4.

The management expects that the exposure to risk of changes in market rates of these mutual funds is minimal.

(b) Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments. Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the international credit rating agencies.

Credit risk arising from trade receivables is managed in accordance with the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively.

Concentrations of Credit risk form part of Credit risk

During the year ended 31st March, 2017, sales to a customer approximated Rs, 4,0583.08 Lacs or 29.62 % of net revenue and during the year ended 31st March 2016, sales to such customer approximated Rs, 2,7341.86 Lacs or 16.31 % of net revenue. Accounts receivable from such customer approximated Rs, 1,7185.11 Lacs at 31st March, 2017 and Rs, 1,8027.27 Lacs at 31st March, 2016. A loss of this customer could adversely affect the operating results or cash flows of the Company.

(c) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including, debt and overdraft / credit facilities from both domestic and international banks at an optimized cost. It also enjoys strong access to domestic capital markets across equity.

6. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value through efficient allocation of capital towards expansion of business, optimization of working capital requirements and deployment of surplus funds into various investment options.

As at 31st March, 2017, the Company meets its capital requirement through equity and has low debts. Consequent to such capital structure, there are no externally imposed capital requirements.

In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.

The management of the Company reviews the capital structure of the Company on regular basis. As part of this review, the Board considers the cost of capital and the risks associated with the movement in the working capital.

7. SPECIFIED BANK NOTES DISCLOSURE (SBNs)

Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide notification G.S.R 308 (E) dated 30th March, 2017. The said amendment requires the Company to disclose the details of Specified Bank Notes (''SBNs'') held and transacted during the period 8th November, 2016 to 30th December, 2016. For the purpose of this clause, the term ''Specified Bank Note'' shall have the same meaning as provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E) dated 8th November, 2016

8. FIRST-TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS ("Ind AS")

These financial statements, for the year ended 31st March 2017, are the first financial statement, the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013 (the "Act") read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening Balance Sheet was prepared as at 1st April, 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the Balance Sheet as at 1st April, 2015 and the financial statements as at and for the year ended 31st March, 2016.

Exemptions applied

Ind AS 101 "First-time Adoption of Indian Accounting Standards" allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of its Property, plant and equipment and Intangible assets as recognized in its Indian GAAP financial as deemed cost at the transition date.

b) The Company has elected to measure investments in subsidiaries as per the statement of financial position prepared in accordance with previous GAAP as a deemed cost at the date of transition as per exemption available under Ind AS 101.

c) The Company has elected to avail exemption under Ind AS 101 to continue the policy adopted for accounting for exchange differences arising from translation of long term foreign currency monetary items outstanding and recognized in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting as per the previous GAAP.

d) The Company has elected to disclose the following amounts prospectively from the date of transition (Ind AS ordinarily requires the amounts for the current and previous four annual periods to be disclosed):

(i) the present value of the defined benefit obligation, the fair value of the plan assets and the surplus or deficit in the plan; and

(ii) the experience adjustments arising on the plan liabilities and the plan assets.

e) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

(a) Re-measurement cost of net defined liability:

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under Ind AS, re-measurements comprising of actuarial gains and losses, the effect of the asset selling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI.

(b) Classification and fair value measurement of Financial Assets and Financial Liabilities:

The Company has assessed the classification and fair valuation impact of financial assets and liabilities under Ind AS 32 / Ind AS 109 on the basis of the facts and circumstances at the transition date. Impact of fair value changes as on date of transition, is recognized in opening reserves and changes thereafter are recognized in Statement of Profit and Loss or Other Comprehensive Income, as the case may be. Sales bills discounted has been recognized as financial assets and liabilities as the Company has retain substantially all risks and rewards of ownership of the transferred assets based on arrangements with the bankers and the customers.

Borrowings (part of Financial Liabilities) - Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to the Statement of Profit and Loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability measured at amortized cost and charged to Statement of Profit and Loss using the Effective Interest Rate (EIR) method.

(c) Reversal of Proposed Dividend and Tax thereon:

Under Indian GAAP, proposed dividends including DDT are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a General Meeting) or paid.

In the case of the Company, the declaration of final dividend occurs after period end. Therefore, the liability for the year ended on 31st March, 2015 recorded for dividend has been derecognized against retained earnings on 1st April, 2015 and the same liability was recognized in the financial year 2015-16.

(d) Leasehold Land:

Under previous GAAP, value of leasehold land is amortized in equal installments during the last fifteen years of the lease term where as under Ind AS value of leasehold land is amortized over the period of lease.

(e) Excise Duty:

Under previous GAAP, revenue from sale of goods was presented net of excise duty whereas under Ind AS the revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the Statement of Profit and Loss as part of expenses.

(f) Other comprehensive income:

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP Statement of Profit and Loss to Statement of Profit and Loss as per Ind AS. Further, Indian GAAP Statement of Profit and Loss is reconciled to total comprehensive income as per Ind AS.

(g) Deferred Tax Adjustments:

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in co-relation to the underlying transaction either in retained earnings or a separate component of equity. Further, tax credits in the form of minimum alternate tax credit entitlement is classified as differed tax under Ind AS.

9. EXPOSURE DRAFTS AND ACCOUNTING STANDARDS NOT YET NOTIFIED

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and has amended the following standard:

(a) Amendments to Ind AS 7, Statement of Cash Flows: The amendments to Ind AS 7 requires an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1st April, 2017. Application of this amendments will not have any recognition and measurement impact. However, it will require additional disclosure in the financial statements.

(b) Amendments to Ind AS 102, Share-based Payment: The MCA has issued amendments to Ind AS 102 that address three main areas

i) the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction,

ii) the classification of a share-based payment transaction with net settlement features for withholding tax obligations, and

iii) accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. The amendments are effective for annual periods beginning on or after 1st April, 2017.

These amendments does not have material impact on the Company''s financial statements. The Company will adopt these amendments from their applicability date.

10. EVENTS OCCURRED AFTER THE BALANCE SHEET DATE

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of 17th May, 2017, there were no subsequent events to be recognized or reported that are not already previously disclosed.


Mar 31, 2016

1. Capital Commitment

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs, 2,184.72 Lacs (P.Y. Rs, 1,303.47 Lacs).

2. The Company has incurred premium expenses of Rs, 127.85 Lacs (P.Y. Rs, 100.99 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 recognized 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.

3. Employee Stock Option Scheme (ESOS)

Pursuant to Equity Settled ESOS Scheme 2006 (Scheme 2006), the outstanding equity stock options (5,22,000 nos.) have lapsed in the previous year. As required by Guidance Note on Accounting for Employee Share-based Payments issued by ICAI, the Company had transferred ''122.15 Lacs from "Employee Stock Options Account" representing the difference between the market price of the share on the date of grant of option and the exercise price of the lapsed options to "General Reserve Account" in the previous year.

4. 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 (Accounts) Rules, 2014, 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.

5. 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) Wholly Owned 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 P. Sanghvi (Son of Mr. Prakash M . Sanghvi)

- Mr. Jigar P. 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.


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, 2012

Note 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 mobile plants at Koradi (Maharashtra) and the other at Mungilpatti (Tamil Nadu) as on year end.

Note 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.

Note 3.1 Terms/Rights attached to Equity Shares

– The Company has only one class of Equity Shares having a par value of Rs. 2/- per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the Shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by Share holders.

Note 3.2 Shares Reserved for issue under option

The Company reserved issuance of 22,50,000 (P. Y. 22,50,000) Equity Shares of Rs. 2/- each for offering to eligible employees of the Company under Employees Stock Option Scheme 2006 at a price of Rs. 59.40 per option plus all applicable taxes, as may be levied in this regard on the Company. The options were granted on 31st October, 2006 and have vested completely. Out of the reserved Equity Shares, 14,15,609 Equity Shares (P. Y. 13,74,959) have been issued till date. The maximum exercise period is 8 years from the date of grant of options. (Also refer note no. 30)

– External (Foreign) Commercial Borrowing of Rs. 3,558.79 Lacs (P.Y. Rs. 3,851.00 Lacs) from ICICI Bank Ltd. Hong Kong branch is carrying interest for the first seven years @3M Libor 1.52% P.A., eighth year @3M Libor 2.04% P.A., ninth year @3M Libor 2.54% P.A. The loan is repayable in 32 quarterly installments of USD 4,06,250.00 each from 22.07.2008. The loan is secured by an exclusive charge over all the 8 windmills along with related equipments / machineries situated at Moti Sindholi, Kutch, Gujarat and personal guarantee of Sh. P. M. Sanghvi, Chairman and Managing Director of the Company.

– External (Foreign) Commercial Borrowing of Rs. 3,435.33 Lacs (P.Y. Rs. 3,611.20 Lacs) from ICICI Bank Ltd. Hong Kong branch is carrying interest @ 6M Libor 4.52% P.A. The loan is repayable in 12 half yearly installments of USD 6,66,666.67 each from 22.07.2011. The loan is secured by an exclusive charge over movable assets in respect of 3Layer PE Coating Line and Offline Welding & Finishing Lines for HSAW plant situated at Survey No. 474, Village Bhimasar, Tal. Anjar, Dist. Kutch.

– External (Foreign) Commercial Borrowing of Rs. Nil (P.Y. Rs. 236.99 Lacs) from ICICI Bank (UK) Ltd. was carrying interest @ 3M Libor 1.25% P.A. The loan was repayable in 16 quarterly installments of USD 1,75,000.00 each from 15.03.2007. The loan was secured by first charge on the Company's entire immovable and movable properties situated at Survey Nos. 769, 780 and 787, Village Indrad, Chhatral, Tal. Kadi, Dist. Mehsana and Survey No. 474, Village Bhimasar, Tal. Anjar, Dist. Kutch. The said loan was further secured by second charge on inventories and book debts and personal guarantee of Sh. P. M. Sanghvi, Chairman and Managing director of the Company.

Note 4.1

Working Capital Loans are secured by - i) Hypothecation of Inventories, Books Debts, all other movables; ii) Second charge on Fixed Assets of the Company except, a) 8 wind mills along with related equipments/ machineries situated at Moti Sindholi, Kutch, Gujarat and, b) movable assets in respect of 3Layer PE Coating Line and Offline Welding & Finishing Lines for HSAW plant situated at Survey No. 474,village Bhimasar, Tal. Anjar, Dist. Kutch; iii) Personal guarantees of Sh. P. M. Sanghvi, Chairman and Managing Director, Sh. J.M. Sanghvi, Whole-time Director and Sh. S.M. Sanghvi, Whole-time Director, of the Company; iv) Joint equitable mortgage of all immovable properties held as free-hold and leasehold lands of the Company, except leasehold land related to 8 wind mills situated at Moti Sindholi, Kutch and 3Layer PE Coating Line and Offline Welding & Finishing Lines for HSAW plant situated at Survey No.474, Village Bhimasar, Tal. Anjar, Dist. Kutch.

Note 4.2

Additional working capital loans in form of Buyer's Credits in Foreign Currencies of Rs. 3,470.65 Lacs (P.Y. Rs. 8,449.48 Lacs) from ICICI Bank Limited are secured by i) Hypothecation of Inventories, Books debts, all other movables by way of subservient charge. ii) Personal guarantee of Sh. P. M. Sanghvi, Chairman and Managing Director of the Company.

Note 4.3

Other Loans and Advances from banks payable on demand are secured by personal guarantee of Sh. P. M. Sanghvi, Chairman and Managing Director of the Company.

Note 5.1

The amount of Trade receivable is net of Bills discounted of Rs. 178.76 Lacs (P.Y. Rs. 1460.70 Lacs) with bankers and therefore the same is not shown as liability.

Note 6 CONTINGENT LIABILITIES (Rs.in Lacs)

Particulars 31-03-2012 31-03-2011

a) Bills discounted and not matured 178.76 1,460.70

b) ESI Liability (excluding interest leviable, if any) 196.86 175.25

c) Consolidated Tax payable to GIDC, Chhatral 17.83 24.93

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

- Income tax - 81.55

- Excise Duty 1,851.46 1,804.23

- Central Sales Tax - 32.18

Note 7 EMPLOYEE STOCK OPTION SCHEME (ESOS)

The Company provides share-based payment schemes to its employees. During the year ended 31st March, 2012, 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 and accordingly options were exercised.

The weighted average share price at the date of exercise is Rs. 91.95 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.

Note 8 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.

Note 9 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.

Note 10 PRIOR PERIOD ITEMS

Prior period items of Rs. 1,712.87 Lacs in the current year pertains to the impact of reversing timing difference on depreciation and deferred tax asset on provision for leave encashment not recognised in the previous year.

In the previous year, the prior period items of Rs. 106.00 Lacs pertain to the excess provision made in earlier years, written back.

Note 11

Till the year ended 31st March, 2011 the Company was using pre-revised schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised schedule VI notified under the Companies Act, 1956, has became applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.


Mar 31, 2011

1. Contingent Liabilities as on 31st March, 2011 in respect of :-

(Rs. In Lacs)

Sr. Particulars Current Year Previous Year

a) Guarantees / Counter guarantees issued (including Letters of Credit) 31,016.72 15,083.63

b) Bills discounted and not matured 1,460.70 848.65

c) ESI Liability 175.25 154.58

d) Consolidated Tax payable to GIDC, Chhatral 24.93 20.39

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

- Income tax 81.55 21.21

- Excise Duty 1,804.23 2,935.02

- Central Sales Tax 32.18 -

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 3,916.44 Lacs (P.Y. Rs. 1,577.87 Lacs).

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

4. The Company has paid premium of Rs. 31.80 Lacs (P.Y. Rs. 31.69 Lacs) on Key Man Insurance Policy on the lives 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. 75.57 Lacs to the carrying cost of assets on account of Foreign Exchange difference for the year 2010-11 (P.Y. credited Rs.1437.02 Lacs). The unamortised Foreign Exchange Difference is credit Rs. 134.35 Lacs (P.Y credit Rs.64.64 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. 1460.70 Lacs (P.Y Rs. 848.65 Lacs) with bankers and therefore the same is not shown as liabilities.

7. The Company is engaged in the business of Steel Tubes and Pipe 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 mills for sale of power 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

- Mr. Prashant J. Sanghvi

- Mr. Nilesh P. Sanghvi

(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 put in place a suitable system for identifying the vendors coming under the purview of the Micro, Small and Medium enterprises Development Act, 2006. Since the Company has not received any information in this regard from the vendors, disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act could not be ascertained.

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. 5,368.19 Lacs (P.Y. Rs. 5,809.40 Lacs)

12. Derivative contracts entered into by the Company and outstanding as on 31st March, 2011

For Hedging Currency and Interest Rate Related Risks :

Nominal amounts of derivative contracts entered into by the Company and outstanding as at 31st March, 2011 amount to Rs. 8397.42 Lacs (P.Y. Rs. 6394.48 Lacs).

13. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


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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