1 Disclosure under Revised Accounting Standard 15 on Employee
Benefits:
Consequent to Accounting Standard 15 "Employee Benefits" (Revised 2005)
becoming effective, the Company has made the provision for Defined
Contribution Plan and Defined Benefit Plan.
Defined Contribution Plan
During the year, the Company has recognized Rs. 3,489,560/- (Previous
Year Rs. 3,500,521/- ) towards Provident Fund and Employees, State
Insurance Corporation as Defined Contribution Plan Obligation.
Defined Benefit Plan Gratuity & Leave Encashment
Liability is computed on the basis of Gratuity & Leave Encashment
payable on retirement, death and other withdrawals as per the Act and
already accrued for past service, with the qualifying wages/salaries
appropriately projected, as per the Projected Unit Credit Method.
2 Segment Reporting
The Company's operations predominantly relates to manufacturing and
trading of "Stainless Steel Tubes & Pipes", Hence there is no separate
reporting segment as per Accounting Standard 17 "Segment Reporting" as
prescribed under section 133 of the Companies Act, 2013 read with Rule
7 of the Companies (Accounts) Rules, 2014.
3 Related Party Disclosure
Disclosure requirement as per Accounting Standard 18 (AS-18) "Related
Party Disclosure" as prescribed under section 133 of the Companies Act,
2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
The information has been given in respect of such vendors to the extent
they could be identified as "Micro, Small and Medium" Enterprises on
the basis of information available with the Company.
4 Some of the balances of Trade Receivables, Deposits, Loans &
Advances, Advances received from customers, Liability for expenses and
Trade Payables are subject to confirmation from the respective parties
and consequential reconciliation/adjustment arising there from, if any.
The management, however, does not expect any material variation.
5 In the opinion of the Management, Current Assets, Loans & Advances
are approximately of the value stated, if realized, in the ordinary
course of business. The provision for all known and determined
liability is adequate and not in the excess of the amount reasonably
required.
6 Sundry balances (net) written off amounting to Rs. 20,010,323/- are
net of sundry credit balances written back amounting to Rs.4,527,680/-
(in previous year sundry balances (net) written off amounting to Rs.
31,326,734/- are net of sundry credit balances written back amounting
to Rs.85,65,196/-)
7 Prior period adjustment (Net) amounting to Rs 35,805/- (credit)
{Previous year Rs. 31,090/- (credit)} includes income of Rs. 37,864/-
(Previous year Rs. 290,025/- ) and expenses Rs. 2,059/- (Previous year
Rs.258,935/-).
8 During the year, the Company has written off Bad debts amounting to
Rs.102,592,154/-. This being a material amount, the same has been shown
as 'Exceptional Item' for the year. ('Exceptional Item' for the
previous year ended 31st March, 2014 represents gain of Rs.17,500,000/-
on account of forfeiture of advance due to cancellation of sale
contract by the customer as per terms of contract.)
9 Discolosures of derivative instruments
The Company has entered into the following derivative instruments. All
the forward contracts are accounted for as per Accounting Policies
stated in Note 1(i) annexed to Balance Sheet and Statement of Profit
and Loss.
The Company uses foreign currency forward contracts to hedge its risks
associated with foreign currency fluctuations. The Company does not use
forward contracts for speculative purposes.
10 During the year, pursuant to the notification of Schedule II to the
Companies Act, 2013 with effect from 1 April, 2014, the Company has
revised the useful life of its assets to the useful life specified in
Schedule II whereas previously the Company was providing the
depreciation on its fixed assets at the rates specified in Schedule XIV
of the Companies Act, 1956. Accordingly, the carrying amount of the
fixed assets as on 1st April, 2014 has been depreciated over the
remaining revised useful life of the fixed assets. As a result, the
depreciation charge for year ended 31st March, 2015 is higher by
Rs.23,621,956/- and profit before tax year ended 31st March, 2015 is
lower to the said extent. Further, based on the transitional provisions
provided in note 7(b) of the Schedule II, fixed assets whose useful
life has already been completed as on 1st April, 2014, the carrying
value of those fixed assets amounting to Rs. 9,070,071/- and the
corresponding deferred tax thereon amounting to Rs. 3,082,917/- have
been debited and credited respectively to the opening balance of
'Retained Earnings'.
11 The Company has entered into a Joint Venture Agreement with Tubacex
S. A. on February 13, 2015. Pursuant to the joint ventured agreement,
the Company proposes to transfer its Seamless Stainless Steel Tubes and
Pipes business (herein after referred as "seamless business" or
"discontinued operations") to the new Joint Venture Company (JVC)
(incorporated on April 22, 2015) at a net consideration of Rs. 209.16
crores and sell additional land measuring about 16,188 sq. metres for
an additional consideration of about Rs.20 crores subject to fulfilment
of various terms & condition based on which the execution of the
business transfer agreement will take place. The JVC has been
incorporated as a wholly owned subsidiary and subsequently the 67.53%
of the shareholding in the JVC will be held by Tubacex S.A and 32.47%
by the Company. The effect of the said transaction will be given on
fulfilment of various terms and conditions of joint venture agreement.
The Company operates under a single business segment i.e. 'Stainless
Steel Tubes & Pipes' within the meaning of Accounting Standard - 17
'Segment Reporting'. The transfer of the seamless business would
involve transfer of assets and liabilities as are related to the
seamless business and as the same are identified by the parties to the
transaction. For this purpose, employees, tangible and intangible
assets, current assets, market territories, other liabilities etc. are
being identified as are related to the seamless business. In view of
common employees, marketing expenses, operating expenses, finance cost,
common customers, common suppliers, logistics & distribution
arrangements and general corporate overheads, which are not separately
identifiable for seamless business, the Company is unable to determine
the income, expenses, assets and liabilities clearly attributable to
the discontinued operations. As per the practice followed by the
Company for preparation of its financial statements for financial
reporting purposes, its present system of maintenance of books of
account and other relevant records do not provide clearly identifiable
details of income and expenditure as are related to the seamless
business. Under the circumstances, the management is of the view that
seamless business, a component of the enterprise, cannot be
distinguished operationally and for financial reporting purposes and
also in view of the fact that the binding agreement for the transfer of
the seamless business is pending, the initial disclosures, namely total
assets, total liabilities, revenue, expenses, net cash flows and
pre-tax profit or loss in respect of the ordinary activities
attributable to the discontinuing operation and the income tax expense
related thereto pertaining to the discontinuing operations as required
by Accounting Standard (AS) 24 'Discontinuing Operations' are not
given.
12 The Company's pending litigations comprise of claims against the
Company and proceedings pending with Statutory and Ta x Authorities.
The Company has reviewed all its pending litigations and proceedings
and has made adequate provisions, whenever required and disclosed the
contingent liabilities, wherever applicable, in its financial
statements. The Company does not expect the outcome of these
proceedings to have a material impact on its financial position (Refer
note no 28 for details on contingent liabilities).
13 The Company periodically reviews all its long term contracts
including derivative contracts to assess for any material foreseeable
losses. Based on such review, the Company has made adequate provisions
for these long term contracts in the books of account as required under
any applicable law/ accounting standard.
14 For the year ended march 31, 2015. the Company is not required to
transfer any amount into the investor education & protection fund.
15 Disclosure in respect of Corporate Social Responsibility Expenditure
( CSR ) is as under. (a) Gross amount required to be spent by the
company during the year is Rs 4,850,465/- (b) Amount spent during the
year is Rs Nil
16 Disclosure pursuant to clause 32 of the Listing Agreement:
17 Details of loans given , Investments made and guarantee given
covered u/s 186 (4) of the Companies Act, 2013:
Details of the loans are given in note 45 above and details of
investment are given in note no 10 above.
18 During the previous year, Company had initiated the development of
the "Industrial Park Project" on its idle land at Palgam (Umbergaon)
and accordingly, it had converted the Land from Fixed Assets into
Stock-in- Trade at lower of cost or net realizable value i.e. at cost
of Rs. 88,18,164/-. It had passed a special resolution for including
real estate business activities as one of the main object and obtained
approval from shareholders. However, the Company could not alter the
main object clause of memorandum and articles of association as the
Registrar of the Companies (ROC) has approved the same subject to
change of name of the Company in line with proposed new business.
Accordingly, during the year, it has reconverted the Land from
stock-in-trade to Fixed Assets.
19 During the previous year, Company has incorporated on 10th April,
2013, wholly-owned foreign subsidiary viz. Pioneer Stainless & Alloy -
F.Z.C. at Ajman, United Arab Emirates for doing trade activities
internationally in ferrous and non ferrous metal items.
20 Figures of the previous year have been re-grouped, re-classified and
re-arranged, wherever necessary.
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