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Accounting Policies of Gandhi Special Tubes Ltd. Company
Mar 31, 2025
1.1 Corporate Information
Gandhi Special Tubes Limited (âthe Companyâ) is
engaged in manufacture of Seamless and Welded Steel
Tubes, Nuts and generation of Wind Power.
The Company is a public limited company incorporated
and domiciled in India and has its registered office at
201-204, Plaza, 2nd Floor Near Dharam Palace, 55
Hughes Road, Mumbai - 400004. The equity shares of
the Company are listed on Bombay Stock Exchange
Limited (BSE) and National Stock Exchange of India
Limited (NSE).
The financial statements for the year ended 31 March
2025 are approved by the Company''s Board of Directors
on 28 May, 2025
1.2 Basis of Preparation
These financial statements of the Company have
been prepared in accordance with Indian Accounting
Standards (Ind AS) as prescribed under Section 133
of the Companies Act, 2013 (the ''Act'') read with the
Companies (Indian Accounting Standard) Rules as
amended from time to time.
These financial Statements are prepared on an accrual
basis under the historical cost convention or amortised
cost, except for the following assets and liabilities, which
have been measured at fair value :
i) Certain financial assets and liabilities that are measured
at fair value
ii) Defined Benefit Obligations - as per actuarial valuation
These financial statements are presented in Indian
Rupees (INR), which is also the Company''s functional
currency and all amounts are rounded off, except when
otherwise indicated.
1.3 Critical Accounting Judgements and Key Sources of
Estimation Uncertainty
The preparation of the financial statements requires
the management to make judgements, estimates and
assumptions in the application of accounting policies
and that have the most significant effect on reported
amounts of assets, liabilities, income and expenses,
and accompanying disclosures, and the disclosure of
contingent liabilities. The estimates and associated
assumptions are based on historical experience and
other factors that are considered to be relevant. Actual
results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the
revision affects only that period or in the period of the
revision and future periods if the revision affects both
current and future periods.
1.4 Key estimates, assumptions and judgements
The key assumptions concerning the future and other
major 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:
a) Property, Plant and Equipment/Intangible Assets
Property, Plant and Equipment/ Other Intangible Assets
are depreciated/amortised over their estimated useful
lives, after taking into account estimated residual value.
The useful lives and residual values are based on the
Company''s historical experience with similar assets and
taking into account anticipated technological changes
or commercial obsolescence. Management reviews
the estimated useful lives and residual values of the
assets annually in order to determine the amount of
depreciation/amortisation to be recorded during any
reporting period. The depreciation/amortisation for future
periods is revised, if there are significant changes from
previous estimates and accordingly, the unamortised/
depreciable amount is charged over the remaining useful
life of the assets.
b) Leased Assets
Identification of a lease requires significant judgment in
assessing the lease term (including anticipated renewals)
and the applicable discount rate. The Company
determines the lease term as the non-cancellable period
of a lease, together with both periods covered by an option
to extend the lease if the Company is reasonably certain
to exercise that option; and periods covered by an option
to terminate the lease if the Company is reasonably
certain not to exercise that option. In assessing whether
the Company is reasonably certain to exercise an option
to extend a lease, or not to exercise an option to terminate
a lease, it considers all relevant facts and circumstances
that create an economic incentive for the Company to
exercise the option to extend the lease, or not to exercise
the option to terminate the lease. The Company revises
the lease term if there is a change in the non-cancellable
period of a lease. The lease payments are discounted
using the interest rate implicit in the lease or, if not readily
determinable, using the RBI lending rates increased by
2%.
c) Fair Value measurements of 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
(Net Assets Value in case of units of Mutual Funds),
their fair value is measured using valuation techniques
including the Discounted Cash Flow (DCF) model.
The inputs to these models are taken from observable
markets where possible, but where this is not feasible,
a degree of judgement is required in establishing fair
values. Judgements 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.
d) Employee Benefit Plans
The cost of the defined benefit gratuity plan and other-
post employment benefits and the present value of
gratuity obligations and compensated absences is/
are determined based on actuarial valuations. 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, attrition and mortality rates.
Due to the complexities involved in the valuation and
its long-term nature, these liabilities are highly sensitive
to changes in these assumptions. All assumptions are
reviewed at each reporting date.
The mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only at
interval in response to demographic changes. Further
salary increases and gratuity increases are based on
expected future inflation rates.
e) Impairment of Assets
The Company has used certain judgements and
estimates to work out future projections and discount
rates to compute value in use of cash generating unit
and to access impairment. In case of certain assets
independent external valuation has been carried out to
compute recoverable values of these assets.
f) Impairment of Financial Assets
The impairment provisions for financial assets are based
on assumptions about risk of default and expected cash
loss rates. The Company uses judgement in making
these assumptions and selecting the inputs to the
impairment calculation, based on the Company''s past
history, existing market conditions as well as forward
looking estimates at the end of each reporting period.
The Company reviews its carrying value of investments
carried at amortised cost annually, or more frequently
when there is indication for impairment. If the recoverable
amount is less than its carrying amount, the impairment
loss is accounted for.
g) Income taxes
Significant judgements are involved in determining the
provision for income taxes, including amount expected
to be paid/recovered for uncertain tax positions as also
to determine the amount of deferred tax that can be
recognised, based upon the likely timing and the level of
future taxable profits. Also refer Note No.32.
1.5 Property, Plant and Equipment (PPE)
PPE is recognised when it is probable that future
economic benefits associated with the item will flow to
the Company and the cost of the item can be measured
reliably. PPE (other than Freehold Land) are stated at
cost less accumulated depreciation and impairment
losses, if any. The initial cost of an asset comprises its
purchase price, non- refundable purchase taxes and any
costs directly attributable to bringing the asset into the
location and condition necessary for it to be capable of
operating in the manner intended by management, the
initial estimate of any decommissioning obligation, if any.
Freehold land is carried at historical cost.
The carrying amount of an item of PPE is derecognised
upon disposal or when no future economic benefit is
expected to arise from its continued use. Any gain or
loss arising on the derecognition of an item of PPE is
determined as the difference between the net disposal
proceeds and the carrying amount of the item and is
recognised in Statement of Profit and Loss.
Depreciation :
Depreciation on Property, Plant and Equipment,
Leasehold Assets (other than freehold land) is provided
on the Straight-Line Method as per the useful life
prescribed under Schedule II to the Companies Act,
2013, except for Wind Mill, which is provided on Written
Down value Method.
The estimated useful lives, residual values and
depreciation method are reviewed at the end of each
reporting period, with the effect of any change in estimate
accounted for on a prospective basis.
1.6 Leases
The Company''s lease asset classes primarily consist of
lease for Land on which windmill has been installed for
power generation. The Company assesses whether a
contract is or contains a lease, at inception of a contract.
A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration. At the date
of commencement of the lease, the Company recognises
a right-of-use asset (âROUâ) and a corresponding lease
liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less
(short term leases) and leases of low value assets.
For these short term and leases of low value assets,
the Company recognises the lease payments as an
operating expense on a straight line basis over the
term of the lease. The right-of-use assets are initially
recognised at cost, which comprises the initial amount of
the lease liability adjusted for any lease payments made
at or prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses, if any. Right-of-use
assets are depreciated from the commencement date on
a straight-line basis over the shorter of the lease term and
useful life of the underlying asset. The lease liability is
initially measured at the present value of the future lease
payments. The lease liability is subsequently remeasured
by increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to reflect
the lease payments made. A lease liability is remeasured
upon the occurrence of certain events such as a change
in the lease term or a change in an index or rate used
to determine lease payments. The remeasurement
normally also adjusts the leased assets. Lease liability
and ROU asset have been separately presented in the
Balance Sheet and lease payments have been classified
as financing cash flows.
1.7 Intangible Assets
Intangible assets are initially recognised at cost.
Intangible assets are amortised over estimated useful
life of three years on straight- line basis.
1.8 Impairment of non-financial assets
At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount, which is the
higher of the value in use or fair value less cost to sell, of
the asset or cash-generating unit, as the case may be,
is estimated and impairment loss (if any) is recognised
and the carrying amount is reduced to its recoverable
amount.
In assessing the value in use, the estimated future cash
flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments
of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have
not been adjusted. When it is not possible to estimate the
recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash generating
unit to which the asset belongs.
An impairment loss is recognised immediately in the
Statement of Profit and Loss. When an impairment
subsequently reverses, the carrying amount of the asset
is increased to the revised estimate of its recoverable
amount, but upto the amount that would have been
determined, had no impairment loss been recognized
for that asset or cash generating unit. A reversal of
an impairment loss is recognised immediately in the
Statement of Profit and Loss.
1.9 Current versus Non-current classification
The Company presents assets and liabilities in
the Balance Sheet based on current / non-current
classification. An asset is treated as current when it is :
i) Expected to be realised or intended to be sold or
consumed in normal operating cycle
ii) Held primarily for the purpose of trading
iii) Expected to be realised within twelve months after the
reporting period, or
iv) Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
All liability is current when :
i) It is expected to be settled in normal operating cycle
ii) It held primarily for the purpose of trading
iii) It is due to be settled within twelve months after the
reporting period, or
iv) There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period
The company classifies all other liabilities as non-current.
Based on the nature of products and the time between
the acquisition of assets for processing and their
realization in cash and cash equivalents, the Company
has ascertained its operating cycle as twelve months
for the purpose of current / non-current classification of
assets and liabilities.
1.10 Inventories
Inventories comprise all costs of purchase, conversion
and other costs incurred in bringing the inventories to
their present location and condition.
Raw materials, fuels, stores and spares are valued at
lower of cost and net realisable value. Cost is determined
on the basis of the FIFO method. However, materials and
other items held for use in the production of inventories
are not written down below cost if the finished products in
which they will be incorporated are expected to be sold at
or above cost.
Work-in-progress and finished goods are valued at lower
of cost and net realisable value. Cost includes direct
materials, labour, other direct cost and a proportion of
manufacturing overheads based on normal operating
capacity.
Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the
sale.
Mar 31, 2024
1. Notes forming Part of the Financial Statements1.1 Corporate Information
Gandhi Special Tubes Limited (âthe Companyâ) is engaged in manufacture of Seamless and Welded Steel Tubes, Nuts and generation of Wind Power.
The Company is a public limited company incorporated and domiciled in India and has its registered office at 201204, Plaza, 2nd Floor. Near Dharam Palace, 55 Hughes Road, Mumbai - 400004. The equity shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).
The financial statements for the year ended 31 March 2024 are approved by the Company''s Board of Directors on 28 May, 2024
These financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 (the ''Act'') read with the Companies (Indian Accounting Standard) Rules as amended from time to time.
These financial Statements are prepared on an accrual basis under the historical cost convention or amortised cost, except for the following assets and liabilities, which have been measured at fair value :
i) Certain financial assets and liabilities that are measured at fair value
ii) Defined Benefit Obligations - as per actuarial valuation
These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency and all amounts are rounded off, except when otherwise indicated.
1.3 Critical Accounting Judgements and Key Sources of Estimation Uncertainty
The preparation of the financial statements requires the management to make judgements, estimates and assumptions in the application of accounting policies and that have the most significant effect on reported amounts of assets, liabilities, income and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
1.4 Key estimates, assumptions and judgements
The key assumptions concerning the future and other major 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:
a) Property, Plant and Equipment/Intangible Assets
Property, Plant and Equipment/ Other Intangible Assets are depreciated/amortised over their estimated useful lives, after taking into account estimated residual value. The useful lives and residual values are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes or commercial obsolescence. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The depreciation/amortisation for future periods is revised, if there are significant changes from previous estimates and accordingly, the unamortised/depreciable amount is charged over the remaining useful life of the assets.
b) Leased Assets
Identification of a lease requires significant judgment in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and
periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the RBI lending rates increased by 2%.
c) Fair Value measurements of 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 (Net Assets Value in case of units of Mutual Funds), their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements 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.
The cost of the defined benefit gratuity plan and other-post employment benefits and the present value of gratuity obligations and compensated absences is/ are determined based on actuarial valuations. 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, attrition and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Further salary increases and gratuity increases are based on expected future inflation rates.
The Company has used certain judgements and estimates to work out future projections and discount rates to compute value in use of cash generating unit and to access impairment. In case of certain assets independent external valuation has been carried out to compute recoverable values of these assets.
f) Impairment of Financial Assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/ recovered for uncertain tax positions as also to determine the amount of deferred tax that can be recognised, based upon the likely timing and the level of future taxable profits. Also refer Note No. 33.
1.5 Property, Plant and Equipment (PPE)
PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE (other than Freehold Land) are stated at cost less accumulated depreciation and impairment losses, if any. The initial cost of an asset comprises its purchase price, non- refundable purchase taxes and any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any.
Freehold land is carried at historical cost.
The carrying amount of an item of PPE is derecognised upon disposal or when no future economic benefit is expected to arise from its continued use. Any gain or loss arising on the derecognition of an item of PPE is determined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in Statement of Profit and Loss.
Depreciation :
Depreciation on Property, Plant and Equipment, Leasehold Assets (other than freehold land) is provided on the StraightLine Method as per the useful life prescribed under Schedule II to the Companies Act, 2013, except for Wind Mill, which is provided on Written Down value Method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
The Company''s lease asset classes primarily consist of lease for Land on which windmill has been installed for power generation and godown at Mumbai. The Company assesses whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the date of commencement of the lease, the Company recognises a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight line basis over the term of the lease. The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. The lease liability is initially measured at the present value of the future lease payments. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made. A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets. Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Intangible assets are initially recognised at cost. Intangible assets are amortised over estimated useful life of three years on straight- line basis.
1.8 Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount, which is the higher of the value in use or fair value less cost to sell, of the asset or cash-generating unit, as the case may be, is estimated and impairment loss (if any) is recognised and the carrying amount is reduced to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
An impairment loss is recognised immediately in the Statement of Profit and Loss. When an impairment subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but upto the amount that would have been determined, had no impairment loss been recognized for that asset or cash generating unit. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.
1.9 Current versus Non-current classification
The Company presents assets and liabilities in the Balance Sheet based on current / non-current classification. An asset is treated as current when it is :
i) Expected to be realised or intended to be sold or consumed in normal operating cycle
ii) Held primarily for the purpose of trading
iii) Expected to be realised within twelve months after the reporting period, or
iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
All liability is current when :
i) It is expected to be settled in normal operating cycle
ii) It held primarily for the purpose of trading
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The company classifies all other liabilities as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current / non-current classification of assets and liabilities.
Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.
Raw materials, fuels, stores and spares are valued at lower of cost and net realisable value. Cost is determined on the basis of the FIFO method. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials, labour, other direct cost and a proportion of manufacturing overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
1.11 Provisions, Contingent liabilities and Contingent Assets
Provision is recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provision is not recognised for future operating losses.
Provision is measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, the amount of provision is discounted using an appropriate pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
A Contingent liability is disclosed in case of a present obligation arising from past events, when it is either not probable that an outflow of resources will be required to settle the obligation, or a reliable estimate of the amount cannot be made. A Contingent Liability is also disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent Assets are not recognised but where an inflow of economic benefits is probable, contingent assets are disclosed in the financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Revenue from sale of goods is recognised upon transfer of significant risk and rewards of ownership of the goods to the customer which generally coincides with dispatch of goods to customer. Sales exclude Goods and Service Tax (GST). It is measured at fair value of consideration received or receivable, net of returns, rebates and discounts.
Income from Wind Power is recognised at the point of generation.
Revenue from services are recognised as and when the services are rendered on stage of completion method.
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.
d) Dividends
Dividend income from investments is recognised when the Company''s right to receive dividend is established, which is generally when the shareholders approve the dividend.
Employee benefits include Provident Fund, Employee State Insurance Scheme, Gratuity Fund, Leave Encashment.
a) Short-Term and Other Long-term Employee Benefits
A liability is recognised for benefits accruing to employees in respect of short-term employee benefits in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. A liability is recognised for benefits accruing to employees in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by the employees up to the reporting date.
The Company''s contribution to Provident Fund and Employee State Insurance Scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
i) Gratuity
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (âGratuity Planâ) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date,
carried out by an independent actuary.
Payment for present liabilities of future payment of gratuity for all employees other than Managing Director and Joint Managing Director is being made to approved gratuity fund managed by Life Insurance Corporation of India (LIC).
Re-measurement, comprising actuarial gains and losses, is reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income in the period in which they occur. Re-measurement recognised in Other Comprehensive Income is reflected immediately in retained earnings and is not reclassified to Profit and Loss. Past service cost is recognised in the Statement of Profit and Loss immediately for both vested and the non-vested portion.
ii) Compensated Absences
The Company provides for the encashment of absence or absence with pay based on policy of the Company in this regard. The employees are entitled to accumulate such absences subject to certain limits, for the future encashment or absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date on the basis of an independent actuarial valuation.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using applicable tax rates that have been enacted or substantively enacted by the end of the reporting period and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
c) Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
1.16 Foreign Currency Transactions
Transaction in foreign currencies are initially recorded in the functional currency, using the spot exchange rate at the date of the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences that arise on settlement of monetary items recognised in statement of Profit and Loss. Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the initial transactions.
1.17 Financial Instrumentsa) Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
At initial recognition, financial assets and financial liabilities are initially measured at fair value or at amortised cost. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at Fair Value through Profit or Loss are recognised in the Statement of Profit and Loss.
i) Subsequent measurement
All recognised financial assets are subsequently measured in its entirety at either amortised cost or fair value, depending on the classification of the financial assets.
c) Financial Liabilities and Equity Instruments
i) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received.
ii) Financial Liabilities
All financial liabilities (other than derivative financial instruments) are measured at amortised cost using effective interest method at the end of reporting periods.
d) Derecognition of Financial Assets and Liabilities
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or when the Company transfers the contractual rights to receive the cash flows of the financial asset in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset. The Company derecognises a financial liability (or a part of financial liability) when the contractual obligation is discharged, cancelled or expires.
Mar 31, 2023
Corporate Information
Gandhi Special Tubes Limited (âthe Companyâ) is engaged in manufacture of Seamless and Welded Steel Tubes, Nuts and generation of Wind Power.
The Company is a public limited company incorporated and domiciled in India and has its registered office at 201-204, Plaza, 2nd Floor. Near Dharam Palace, 55 Hughes Road, Mumbai - 400004. The equity shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).
The financial statements for the year ended 31 March 2023 are approved by the Company''s Board of Directors on 23 May, 2023 1 Significant Accounting Policies
These financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies Act as amended and notified under Section 133 of the Companies Act, 2013 (the ''Act'') and accounting principle generally accepted in India.
These financial Statements are prepared on an accrual basis under the historical cost convention or amortised cost, except for the following assets and liabilities, which have been measured at fair value:
i) Certain financial assets and liabilities that are measured at fair value
ii) Defined Benefit Obligations - as per actuarial valuation
These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency and all amounts are rounded off, except when otherwise indicated.
1.2 Property, Plant and Equipment (PPE)
PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE (other than Freehold Land) are stated at cost less accumulated depreciation and impairment losses, if any. The initial cost of an asset comprises its purchase price, non- refundable purchase taxes and any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any.
Freehold land is carried at historical cost.
The carrying amount of an item of PPE is derecognised upon disposal or when no future economic benefit is expected to arise from its continued use. Any gain or loss arising on the derecognition of an item of PPE is determined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in Statement of Profit and Loss.
Depreciation :
Depreciation on Property, Plant and Equipment, Leasehold Assets (other than freehold land) is provided on the StraightLine Method as per the useful life prescribed under Schedule II to the Companies Act, 2013, except for Wind Mill, which is provided on Written Down value Method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
The Company''s lease asset classes primarily consist of lease for Land on which windmill has been installed for power generation and godown at Mumbai. The Company assesses whether a contract is or contains a lease, at inception of a
contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the date of commencement of the lease, the Company recognises a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight line basis over the term of the lease. The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. The lease liability is initially measured at the present value of the future lease payments. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made. A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets. Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Intangible assets are initially recognised at cost. Intangible assets are amortised over estimated useful life of three years on straight- line basis.
1.5 Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount, which is the higher of the value in use or fair value less cost to sell, of the asset or cash-generating unit, as the case may be, is estimated and impairment loss (if any) is recognised and the carrying amount is reduced to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
An impairment loss is recognised immediately in the Statement of Profit and Loss. When an impairment subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but upto the amount that would have been determined, had no impairment loss been recognized for that asset or cash generating unit. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.
1.6 Current versus Non-current classification
The Company presents assets and liabilities in the Balance Sheet based on current / non-current classification. An asset is treated as current when it is:
i) Expected to be realised or intended to be sold or consumed in normal operating cycle
ii) Held primarily for the purpose of trading
iii) Expected to be realised within twelve months after the reporting period, or
iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
All liability is current when :
i) It is expected to be settled in normal operating cycle
ii) It held primarily for the purpose of trading
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The company classifies all other liabilities as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current / noncurrent classification of assets and liabilities.
Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.
Raw materials, fuels, stores and spares are valued at lower of cost and net realisable value. Cost is determined on the basis of the FIFO method. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials, labour, other direct cost and a proportion of manufacturing overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Cash flows are reported using the indirect method, whereby profit / loss before extraordinary items and tax for the period is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments. Cash flows from operating, investing and financing activities of the Company are segregated. Cash and cash equivalents for the purpose of cash flow statement comprise of cash at bank, cash in hand and short-term deposits with an original maturity of three months or less, as reduced by bank overdrafts.
1.9 Provisions, Contingent liabilities and Contingent Assets
Provision is recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provision is not recognised for future operating losses.
Provision is measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, the amount of provision is discounted using an appropriate pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
A Contingent liability is disclosed in case of a present obligation arising from past events, when it is either not probable that an outflow of resources will be required to settle the obligation, or a reliable estimate of the amount cannot be made. A Contingent Liability is also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent Assets are not recognised but where an inflow of economic benefits is probable, contingent assets are disclosed in the financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Revenue from sale of goods is recognised upon transfer of significant risk and rewards of ownership of the goods to
the customer which generally coincides with dispatch of goods to customer. Sales exclude Goods and Service Tax (GST). It is measured at fair value of consideration received or receivable, net of returns, rebates and discounts.
Income from Wind Power is recognised at the point of generation.
Revenue from services are recognised as and when the services are rendered on stage of completion method.
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.
Dividend income from investments is recognised when the Company''s right to receive dividend is established, which is generally when the shareholders approve the dividend.
Export incentives are recognised when there is reasonable assurance that the Company will comply with the conditions and the incentive will be received.
Employee benefits include Provident Fund, Employee State Insurance Scheme, Gratuity Fund, Leave Encashment.
a) Short-Term and Other Long-term Employee Benefits
A liability is recognised for benefits accruing to employees in respect of short-term employee benefits in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. A liability is recognised for benefits accruing to employees in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by the employees up to the reporting date.
The Company''s contribution to Provident Fund and Employee State Insurance Scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
i) Gratuity
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (âGratuity Planâ) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary.
Payment for present liabilities of future payment of gratuity for all employees other than Managing Director and Joint Managing Director is being made to approved gratuity fund managed by Life Insurance Corporation of India (LIC).
Re-measurement, comprising actuarial gains and losses, is reflected immediately in the Balance Sheet with a charge or credit recognised in Other Comprehensive Income in the period in which they occur. Re-measurement recognised in Other Comprehensive Income is reflected immediately in retained earnings and is not reclassified to Profit and Loss. Past service cost is recognised in the Statement of Profit and Loss immediately for both vested and the non-vested portion.
ii) Compensated Absences
The Company provides for the encashment of absence or absence with pay based on policy of the Company in this regard. The employees are entitled to accumulate such absences subject to certain limits, for the future encashment or absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date on the basis of an independent actuarial valuation.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using applicable tax rates that have been enacted or substantively enacted by the end of the reporting period and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
MAT Credits are in the form of unused tax credits that are carried forward by the Company for a specified period of time and hence, it is grouped with Deferred Tax Asset.
c) Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is adjusted for after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.14 Foreign Currency Transactions
Transaction in foreign currencies are initially recorded in the functional currency, using the spot exchange rate at the date of the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences that arise on settlement of monetary items recognised in statement of Profit and Loss. Non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the initial transactions.
1.15 Financial Instrumentsa) Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
At initial recognition, financial assets and financial liabilities are initially measured at fair value or at amortised cost. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at Fair Value through Profit or Loss are recognised in the Statement of Profit and Loss.
i) Subsequent measurement
All recognised financial assets are subsequently measured in its entirety at either amortised cost or fair value, depending on the classification of the financial assets.
ii) Impairment of financial assets
For Trade Receivables, the Company computes expected credit loss allowance based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
c) Financial Liabilities and Equity Instruments
i) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received.
ii) Financial Liabilities
All financial liabilities (other than derivative financial instruments) are measured at amortised cost using effective interest method at the end of reporting periods.
d) Derecognition of Financial Assets and Liabilities
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or when the Company transfers the contractual rights to receive the cash flows of the financial asset in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset. The Company derecognises a financial liability (or a part of financial liability) when the contractual obligation is discharged, cancelled or expires.
1.16 Critical Accounting Judgements and Key Sources of Estimation Uncertainty
The preparation of the financial statements requires the management to make judgements, estimates and assumptions in the application of accounting policies and that have the most significant effect on reported amounts of assets, liabilities, income and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
1.17 Key estimates, assumptions and judgements
The key assumptions concerning the future and other major 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:
a) Property, Plant and Equipment/Intangible Assets
Property, Plant and Equipment/ Other Intangible Assets are depreciated/amortised over their estimated useful lives, after taking into account estimated residual value. The useful lives and residual values are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes or commercial obsolescence. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The depreciation/ amortisation for future periods is revised, if there are significant changes from previous estimates and accordingly, the unamortised/depreciable amount is charged over the remaining useful life of the assets.
b) Leased Assets
Identification of a lease requires significant judgment in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the RBI lending rates increased by 2%.
c) Fair Value measurements of 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 (Net Assets Value in case of units of Mutual Funds), their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements 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.
The cost of the defined benefit gratuity plan and other-post employment benefits and the present value of gratuity obligations and compensated absences is/ are determined based on actuarial valuations. 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, attrition and mortality rates. Due to the complexities
involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Further salary increases and gratuity increases are based on expected future inflation rates.
The Company has used certain judgements and estimates to work out future projections and discount rates to compute value in use of cash generating unit and to access impairment. In case of certain assets independent external valuation has been carried out to compute recoverable values of these assets.
f) Impairment of Financial Assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions as also to determine the amount of deferred tax that can be recognised, based upon the likely timing and the level of future taxable profits. Also refer Note No. 33.
1.18 Recent Accounting Pronouncement
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
a) Ind AS 1 - Presentation of Financial Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements
b) Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
This amendment has introduced a definition of ''accounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
Mar 31, 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2018 Corporate Information
Gandhi Special Tubes Limited (âthe Companyâ) is engaged in manufacture of Seamless and Welded Tubes, Nuts and generation of Wind Power.
The Company is a public limited company incorporated and domiciled in India and has its registered office at 201D204, Plaza, 2nd Floor. Near Dharam Palace, 55 Hughes Road, Mumbai - 400004. The equity shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange (NSE).
The financial statements for the year ended 31 March 2018 are approved by the Company''s Board of Directors on 28 May 2018.
1 Significant Accounting Policies 1.1 Basis of Preparation
These financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies Act as amended and notified under Section 133 of the Companies Act, 2013 (the ''Act'') and other relevant provisions of the Act.
For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Accounting Standards specified under Section 133 of the Companies Act, 2013, read with applicable rules and the relevant provisions of the Companies Act, 2013 (âPrevious GAAPâ). The figures for the year ended March 31, 2017 have now been restated as per Ind AS to provide comparability.
These financial statements for the year ended March 31, 2018 are the Company''s first Ind AS standalone financial statements. The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101, âFirst-Time Adoption of Indian Accounting Standardsâ the date of transition to Ind AS being April 1, 2016. Refer to Note 41 for details of adoption of Ind AS.
These financial Statements are prepared on an accrual basis under the historical cost convention or amortized cost, except for the following assets and liabilities, which have been measured at fair value :
i) Certain financial assets and liabilities that are measured at fair value
ii) Defined Benefit Obligations - as per actuarial valuation
These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency and all amounts are rounded off to the nearest lakhs (INR 00,000) up to two decimals, except when otherwise indicated.
1.2 Property, Plant and Equipment (PPE)
PPE is recognized when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE (other than Freehold Land) are stated at cost less accumulated depreciation and impairment losses, if any. The initial cost of an asset comprises its purchase price, non- refundable purchase taxes and any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any.
Freehold land is carried at historical cost less impairment loss, if any.
The carrying amount of an item of PPE is derecognized upon disposal or when no future economic benefit is expected to arise from its continued use. Any gain or loss arising on the derecognition of an item of PPE is determined as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in Statement of Profit and Loss.
Depreciation :
Depreciation on Property, Plant and Equipment (other than freehold land) is provided on the Straight-Line Method as per the useful life prescribed under Schedule II to the Companies Act, 2013, except for Wind Mill, which is provided on Written Down value Method. Leasehold land is amortized over the period of lease.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
1.3 Intangible Assets
Intangible assets are initially recognized at cost. Intangible assets are amortized over estimated useful life of three years on straight- line basis.
1.4 Impairment of non-financial assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount, which is the higher of the value in use or fair value less cost to sell, of the asset or cash-generating unit, as the case may be, is estimated and impairment loss (if any) is recognized and the carrying amount is reduced to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.
An impairment loss is recognized immediately in the Statement of Profit and Loss. When an impairment subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but upto the amount that would have been determined, had no impairment loss been recognized for that asset or cash generating unit. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss.
1.5 Inventories
Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.
Raw materials, fuels, stores and spares are valued at lower of cost and net realizable value. Cost is determined on the basis of the FIFO method. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials, labour, other direct cost and a proportion of manufacturing overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
1.6 Statement of Cash Flows
Cash flows are reported using the indirect method, whereby profit / loss before extraordinary items and tax for the period is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments. Cash flows from operating, investing and financing activities of the Company are segregated. Cash and cash equivalents for the purpose of cash flow statement comprise of cash at bank, cash in hand and short-term deposits with an original maturity of three months or less, as reduced by bank overdrafts.
1.7 Provisions, Contingent liabilities and Contingent Assets
Provision is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provision is not recognized for future operating losses.
Provision is measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, the amount of provision is discounted using an appropriate pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A Contingent liability is disclosed in case of a present obligation arising from past events, when it is either not probable that an outflow of resources will be required to settle the obligation, or a reliable estimate of the amount cannot be made. A Contingent Liability is also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent Assets are not recognized but where an inflow of economic benefits is probable, contingent assets are disclosed in the financial statements.
1.8 REVEN UE RECOG N ITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
a) Sale of Goods
Revenue from sale of goods is recognized upon transfer of significant risk and rewards of ownership of the goods to the customer which generally coincides with dispatch of goods to customer. Sales include excise duty but exclude Goods and Service Tax (GST). It is measured at fair value of consideration received or receivable, net of returns, rebates and discounts.
Income from Wind Power is recognized at the point of generation.
b) Rendering of Services
Revenue from services are recognized as and when the services are rendered on stage of completion method.
c) Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of that financial asset.
d) Dividends
Dividend income from investments is recognized when the Company''s right to receive dividend is established, which is generally when the shareholders approve the dividend.
e) Export incentives
Export incentives are recognized when there is reasonable assurance that the Company will comply with the conditions and the incentive will be received.
1.9 Leases
At the inception of an arrangement, it is determined whether the arrangement is or contains a lease and based on the substance of the lease arrangement, it is classified as a finance lease or an operating lease
a) Finance Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership to the lessee.
Assets under finance leases are capitalized at the commencement of lease at the fair value of the leased property or, if lower, the present value of the minimum lease payments and a liability is created for an equivalent amount. Minimum lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Assets given under a finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Lease income is recognized over the period of the lease so as to yield a constant rate of return on the net investment in the lease.
b) Operating Leases
Leases are classified as operating leases whenever the terms of the lease do not transfer substantially all the risks and rewards incidental to ownership.
Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognized on a straight line basis over the term of the relevant lease.
1.10 Employee Benefits
Employee benefits include Provident Fund, Employee State Insurance Scheme, Gratuity Fund, Leave Encashment.
a) Short-Term and Other Long-term Employee Benefits
A liability is recognized for benefits accruing to employees in respect of short-term employee benefits in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. A liability is recognized for benefits accruing to employees in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by the employees up to the reporting date.
b) Defined Contribution Plan
The Company''s contribution to Provident Fund and Employee State Insurance Scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
c) Defined Benefit Plan
i) Gratuity
In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (âGratuity Planâ) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary.
Payment for present liabilities of future payment of gratuity for all employees other than Managing Director and Joint Managing Director is being made to approved gratuity fund managed by Life Insurance Corporation of India (LIC).
Re-measurement, comprising actuarial gains and losses, is reflected immediately in the Balance Sheet with a charge or credit recognized in Other Comprehensive Income in the period in which they occur. Re-measurement recognized in Other Comprehensive Income is reflected immediately in retained earnings and is not reclassified to Profit and Loss. Past service cost is recognized in the Statement of Profit and Loss immediately for both vested and the non-vested portion.
ii) Compensated Absences
The Company provides for the encashment of absence or absence with pay based on policy of the Company in this regard. The employees are entitled to accumulate such absences subject to certain limits, for the future encashment or absence. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date on the basis of an independent actuarial valuation.
1.11 Taxes on Income
Income tax expense represents the sum of the tax currently payable and deferred tax.
a) Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using applicable tax rates that have been enacted or substantively enacted by the end of the reporting period and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.
b) Deferred Tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
MAT Credits are in the form of unused tax credits that are carried forward by the Company for a specified period of time and hence, it is grouped with Deferred Tax Asset.
c) Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
1.12 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is adjusted for after income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.13 Foreign Currency Transactions
Transactions in foreign currencies are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured at historical cost denominated in a foreign currency,(if any) are translated using the exchange rate as at the date of initial transaction. Exchange differences on monetary items are recognized in profit or loss in the period in which they arise.
1.14 Financial Instruments
a) Initial Recognition and Measurement
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.
At initial recognition, financial assets and financial liabilities are initially measured at fair value or at amortized cost. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at Fair Value through Profit or Loss are recognized in the Statement of Profit and Loss.
b) Financial Assets
i) Subsequent measurement
All recognized financial assets are subsequently measured in its entirety at either amortized cost or fair value, depending on the classification of the financial assets.
ii) Impairment of financial assets
For Trade Receivables, the Company computes expected credit loss allowance based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
c) Financial Liabilities and Equity Instruments
i) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received.
ii) Financial Liabilities
All financial liabilities (other than derivative financial instruments) are measured at amortized cost using effective interest method at the end of reporting periods.
d) Derecognition of Financial Assets and Liabilities
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or when the Company transfers the contractual rights to receive the cash flows of the financial asset in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and does not retain control of the financial asset. The Company derecognises a financial liability (or a part of financial liability) when the contractual obligation is discharged, cancelled or expires.
1.15 Critical Accounting Judgments and Key Sources of Estimation Uncertainty
âThe preparation of the financial statements requires the management to make judgmentâs, estimates and assumptions in the application of accounting policies and that have the most significant effect on reported amounts of assets, liabilities, income and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
1.16 Key estimates, assumptions and judgmentâs
The key assumptions concerning the future and other major 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:
a) Property, Plant and Equipment/Intangible Assets
Property, Plant and Equipment/ Other Intangible Assets are depreciated/amortized over their estimated useful lives, after taking into account estimated residual value. The useful lives and residual values are based on the Company''s historical experience with similar assets and taking into account anticipated technological changes or commercial obsolescence. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation/amortization to be recorded during any reporting period. The depreciation/ amortization for future periods is revised, if there are significant changes from previous estimates and accordingly, the unamortized/depreciable amount is charged over the remaining useful life of the assets.
b) Fair Value measurements of 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 (Net Assets Value in case of units of Mutual Funds), their fair value is measured using valuation techniques including the Discounted Cash Flow (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.
c) Employee Benefit Plans
The cost of the defined benefit gratuity plan and other-post employment benefits and the present value of gratuity obligations and compensated absences is/ are determined based on actuarial valuations. 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, attrition and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Further salary increases and gratuity increases are based on expected future inflation rates.
d) Impairment of Assets
The Company has used certain judgmentâs and estimates to work out future projections and discount rates to compute value in use of cash generating unit and to access impairment. In case of certain assets independent external valuation has been carried out to compute recoverable values of these assets.
e) Impairment of Financial Assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
f) Income taxes
Significant judgmentâs are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions as also to determine the amount of deferred tax that can be recognized, based upon the likely timing and the level of future taxable profits. Also refer Note No.30
1.17 First-time adoption-mandatory exceptions, optional exemptions Overall Principle
The Company has prepared the opening balance sheet as per Ind AS as of 1st April, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities. However, this principle is subject to certain exceptions and certain optional exemptions availed by the Company detailed below:
i) Property, Plant and Equipment
The Company has availed the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment and intangibles as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.
ii) Investments
The Company has elected to measure certain investments in Mutual Funds - At fair value through profit and loss (FVTPL)
iii) Leases
As permitted by Ind AS 101, the Company has elected to avail the exemption as provided in paragraph D9. If an arrangement is determined to be classified as lease, the classification of lease as operating or finance has been made from inception of the arrangement.
1.18 Ind AS issued but not yet effective
Ministry of Corporate Affairs (âMCAâ) through the Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs :
a) Ind AS 21 : The Effects of Changes in Foreign Exchange Rates
Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration is inserted to clarify the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The Appendix explains that the date of the transaction, for the purpose of determining the exchange rate, to use on the initial recognition of the related asset, expense or income (or part of it) is the date on which the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration.
If there are multiple payments or receipts in advance, the date of the transaction is determined for each payment or receipt of advance consideration.
The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on its financial statements and the impact is not material.
b) Ind AS 115 : Revenue from Contracts with Customers
Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind As 18 on âRevenueâ and Ind AS 11 on âConstruction Contractsâ.
The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
Under Ind AS 115, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ''control'' of the goods or services underlying the particular performance obligation is transferred to the customer.
Further, Ind AS 115, requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
C) Ind AS 115 permits two possible methods of transition
Retrospective approach - Under this approach the standard is applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) only to contracts that are not completed contracts on that date. Under this method, cumulative effect is recognized as an adjustment to the opening balance of retained earnings of the annual reporting period
The effective date for adoption of Ind AS 115 is accounting period beginning on or after April 1, 2018.
c) Rights, preferences and restrictions attached to equity shares :
The Company has one class of equity shares having a par value of Rs, 5/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
17.1 The Company concluded the buyback of 8,80,000 equity shares of Rs, 5/- each (representing 5.99% of total pre buy-back paid up Equity Capital) from the shareholders on proportionate basis by way of a tender offer at a price of Rs, 500 per equity share for an aggregate amount of Rs, 44 Crores in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 1998. The process of buyback was completed on 27 March 2018 (except extinguishment of shares, which was completed on 2 April 2018), the effect for which is given in the Financial Statement for the year ended
31 March 2018. Consequent to the Buy-Back, Share Capital, General Reserves and Retained Earnings were reduced by Rs, 44 Lakhs, Rs, 2981 Lakhs and Rs, 1375 lakhs respectively.
17.2 Description of the nature and purpose of each reserve within equity is as follows:
a) Capital Reserve
It represents the gains of capital nature on forfeiture of shares.
b) Capital Redemption Reserve
It represents reserve created during buy back of Equity Shares and it is a non-distributable reserve.
c) General Reserve
The General Reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilised by the Company in accordance with the Companies Act, 2013.
d) Retained Earnings
Retained earnings are the profits that the Company has earned till date and is net of amount transferred to other reserves such as general reserves etc., amount distributed as dividend and adjustments on account of transition to Ind AS.
Mar 31, 2017
1 SIGNIFICANT ACCOUNTING POLICIES 1.1 BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared under the historical cost convention, in accordance with applicable accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provision of the Companies Act, 2013.
1.2 PROPERTY PLANT AND EQUIPMENT
Property Plant and Equipment''s are stated at cost less accumulated depreciation. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use.
1.3 DEPRECIATION / AMORTISATION
Depreciation on Tangible assets has been provided on Straight Line Method as per the useful life prescribed in Schedule-II of the Companies Act, 2013 except for Wind Mills, which is provided on Written Down Value Method. Intangible assets are amortized over estimated useful life of three years on Straight Line Method. Leasehold land is amortize over the period of lease.
1.4 INVESTMENTS
Long-term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Current investments are valued at lower of cost and fair value.
1.5 INVENTORIES
Inventories are valued at lower of cost and net realizable value. The cost is determined on the basis of FIFO Method. For the purpose of finished goods and work-in-process, cost comprises of material cost plus appropriate share of production overheads and excise duty, wherever applicable.
1.6 EMPLOYEE BENEFITS Defined Contribution Plan :
a) In accordance with the provisions of Employees Provident Funds and Miscellaneous Provisions Act,1952, eligible employees of the company are entitled to receive benefits with respect to provident fund, a defined contribution plan in which both the company and the employee contribute monthly at a determined rate (currently 12% of employee''s basic salary). Company''s contribution to provident fund is charged to statement of profit and loss.
b) The Company has taken a Policy with Life Insurance Corporation of India for the payment of gratuity, a defined contribution plan and premium paid on the policy has been charged to statement of profit & loss in the year of payment.
Defined Benefit Plan :
a) Gratuity to the Managing Director and Joint Managing Director, who are not covered under the policy with LIC has been provided for on the basis of Actuarial valuation, which is based on their contractual terms.
b) Liability of Leave encashment benefits to staff has been provided for on the basis of Actuarial Valuation and in accordance with the rules of the Company, except in the case of Managing Director and Joint Managing Director, the same is accounted on cash basis.
1.7 FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. In case of liabilities incurred for the acquisition of fixed assets, the loss or gain on conversion (at the rate prevailing at the yearend) is recognized as income or expenses in the statement of profit and loss. Current assets and liabilities (other than those relating to fixed assets) are restated at the rate prevailing at the year end. The difference between the yearend rate and the exchange rate at the date of the transaction is recognized as income or expense in the statement of profit and loss.
1.8 REVENUE RECOGNITION
Sale of goods is recognized at the point of dispatch to the customer. Income from Wind Power is recognized at the point of generation. Sales includes excise duty but excludes Sales Tax and discounts. Other Income are accounted on accrual basis.
1.9 TAXATION
Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing difference, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods except for carried forward losses, which are recognized only if there is virtual certainty of their realization.
1.10 IMPAIRMENT
An asset is treated as Impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
1.11 PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognized when there is a present obligation as a result of past events for which it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates, contingent liabilities are disclosed after an evaluation of the facts and legal aspects of the matters involved.
a) Reconciliation of number of shares
There is no movement in the share capital during the current and previous year.
b) Rights, preferences and restrictions attached to equity shares :
The Company has one class of equity shares having a par value ofRs,5/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
The Company has disclosed Business Segments as the primary segment. There are no secondary segments. Segments have been identified taking into account the nature of the product, the differing risk and returns, the organizational structure and internal reporting system. The Company''s operations predominantly relate to manufacture of Steel Tubes. Other segments comprise of manufacture of Nuts.
Segment Revenue, Segment Result, Segment Assets and Segment Liabilities include respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses which are not directly relatable to the business segments, are shown as unallocated expenses. Assets and liabilities that cannot be allocated between the segments are shown as unallocated assets and liabilities respectively.
Mar 31, 2015
1.1 BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared under the historical cost
convention, in accordance with applicable accounting standards
specified under Section 133 of the Companies Act, 2013, read with Rule
7 of the Companies (Accounts) Rules, 2014 and the relevant provision of
the Companies Act, 2013 and Companies Act, 1956 as applicable.
1.2 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost is
inclusive of freight, duties, levies and any directly attributable cost
of bringing the assets to their working condition for intended use.
1.3 DEPRECIATION / AMORTISATION
Depreciation on Tangible assets has been provided on Straight Line
Method as per the useful life prescribed in Schedule-II of the
Companies Act, 2013 except for Wind Mills, which is provided on Written
Down Value Method. Intangible assets are amortized over estimated
useful life of three years on Straight Line Method. Leasehold land is
amortize over the period of lease.
1.4 INVESTMENTS
Long-term Investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management. Current
investments are valued at lower of cost and fair value.
1.5 INVENTORIES
Inventories are valued at lower of cost and net realisable value. The
cost is determined on the basis of FIFO Method. For the purpose of
finished goods and work-in-process, cost comprises of material cost
plus appropriate share of production overheads and excise duty,
wherever applicable.
1.6 EMPLOYEE BENEFITS Defined Contribution Plan :
a) In accordance with the provisions of Employees Provident Funds and
Miscellaneous Provisions Act,1952, eligible employees of the company
are entitled to receive benefits with respect to provident fund, a
defined contribution plan in which both the company and the employee
contribute monthly at a determined rate (currently 12% of employee's
basic salary). Company's contribution to providend fund is charged to
statement of profit and loss.
b) The Company has taken a Policy with Life Insurance Corporation of
India for the payment of gratuity, a defined contribution plan and
premium paid on the policy has been charged to statement of profit &
loss in the year of payment.
Defined Benefit Plan :
a) Gratuity to the Managing Director and Joint Managing Director, who
are not covered under the policy with LIC has been provided for on the
basis of Actuarial valuation, which is based on their contractual
terms.
b) As per Leave encashment policy, the employees other than Managing
Director and Joint Managing Director are required to encash accumulated
leave before the end of accounting year and accordingly form the part
of expenses under the head Salaries and wages. However, liability
towards leave encashment benefits to Managing Director and Joint
Managing Director inrespect of unavailed leave at the end of their
tenure is accounted on cash basis.
1.7 FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. In case of liabilities
incurred for the acquisition of fixed assets, the loss or gain on
conversion (at the rate prevailing at the year end) is recognized as
income or expenses in the statement of profit and loss. Current assets
and liabilities (other than those relating to fixed assets) are
restated at the rate prevailing at the year end. The difference between
the year end rate and the exchange rate at the date of the transaction
is recognized as income or expense in the statement of profit and loss.
1.8 REVENUE RECOGNITION
Sale of goods is recognized at the point of despatch to the customer.
Income from Wind Power is recognized at the point of generation. Sales
includes excise duty but excludes Sales Tax and discounts. Other Income
are accounted on accrual basis.
1.9 TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised, subject to the
consideration of prudence in respect of deferred tax assets, on timing
difference, being the differences between taxable income and accounting
income that originate in one peroiod and are capable of reversal in one
or more subsequent periods except for carried forward losses, which are
recognized only if there is virtual certainty of their realization.
1.10 IMPAIRMENT
An asset is treated as Impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
statement of profit & loss in the year in which an asset is identified
as impaired. The impairment loss recognised in prior accounting periods
is reversed if there has been a change in the estimate of recoverable
amount.
1.11 PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognized when there is a present obligation as a
result of past events for which it is probable that an outflow of
resources will be required to settle the obligation and in respect of
which a reliable estimate can be made. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates,
contingent liabilities are disclosed after an evaluation of the facts
and legal aspects of the matters involved.
a) Reconcilation of number of shares
There is no movement in the share capital during the current and
previous year.
Mar 31, 2013
1.1 BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared under the historical cost
convention, in accordance with applicable accounting standards notified
by the companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956.
1.2 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost is
inclusive of freight, duties, levies and any directly attributable cost
of bringing the assets to their working condition for intended use.
1.3 DEPRECIATION/AMORTISATION
Depreciation is provided on Straight Line Method at the rates and in
the manner specified in Schedule XIV of the Companies Act, 1956, except
for Wind Mills, which is provided on Written Down Value Method and for
Intangible assets, which is written off during the period of three
years. Leasehold land is amortized over the period of lease.
1.4 INVESTMENTS
Long-term Investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management. Current
investments are valued at lower of cost and fair value.
1.5 INVENTORIES
Inventories are valued at lower of cost and net realisable value. The
cost is determined on the basis of FIFO Method. For the purpose of
finished goods and work-in-process, cost comprises of material cost
plus appropriate share of production overheads and excise duty,
wherever applicable.
1.6 EMPLOYEE BENEFITS
Defined Contribution Plan:
a) In accordance with the provisions of Employees Provident Funds and
Miscellaneous Provisions Act, 1952, eligible employees of the company
are entitled to receive benefits with respect to provident fund, a
defined contribution plan in which both the company and the employee
contribute monthly at a determined rate (currently 12% of employee''s
basic salary). Company''s contribution to providend fund is charged to
statement of profit and loss.
b) The Company has taken a Policy with Life Insurance Corporation of
India for the payment of gratuity, a defined contribution plan and
premium paid on the policy has been charged to statement of profit &
loss in the year of payment.
Defined Benefit Plan:
a) Gratuity to the Managing Director and Joint Managing Director, who
are not covered under the policy with LIC has been provided for on the
basis of Actuarial valuation, which is based on their contractual
terms.
b) Liability for Managing Director and Joint Managing Director leave
encashment benefits is accounted on cash basis.
1.7 FOREIGN CURRENCYTRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. In case of liabilities
incurred for the acquisition of fixed assets, the loss or gain on
conversion (at the rate prevailing at the year end) is recognized as
income or expenses in the statement of profit and loss. Current assets
and liabilities (other than those relating to fixed assets) are
restated at the rate prevailing at the year end. The difference between
the year end rate and the exchange rate at the date of the transaction
is recognized as income or expense in the statement of profit and loss.
1.8 REVENUE RECOGNITION
Sale of goods is recognized at the point of despatch to the customer.
Income from Wind Power is recognized at the point of generation. Sales
includes excise duty but excludes Sales Tax and discounts. Other
Income are accounted on accrual basis.
1.9 TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised, subject to the
consideration of prudence in respect of deferred tax assets, on timing
difference, being the differences between taxable income and accounting
income that originate in one peroiod and are capable of reversal in one
or more subsequent periods except for carried forward losses, which are
recognized only if there is virtual certainty of their realization.
1.10 IMPAIRMENT
An asset is treated as Impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
statement of profit & loss in the year in which an asset is identified
as impaired. The impairment loss recognised in prior accounting periods
is reversed if there has been a change in the estimate of recoverable
amount.
1.11 PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognized when there is a present obligation as a
result of past events for which it is probable that an outflow of
resources will be required to''settle the obligation and in respect of
which a reliable estimate can be made. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates,
contingent liabilities are disclosed after an evaluation of the facts
and legal aspects of the matters involved.
Mar 31, 2012
1.1 BASIS OFACCOUNTINGAND PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared under the historical cost
convention, in accordance with applicable accounting standards notified
by the companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act,1956.
1.2 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost is
inclusive of freight, duties, levies and any directly attributable cost
of bringing the assets to their working condition for intended use.
1.3 DEPRECIATION/AMORTISATION
Depreciation is provided on Straight Line Method at the rates and in
the manner specified in Schedule XIV of the Companies Act, 1956, except
for Wind Mills, which is provided on Written Down Value Method.
Leasehold land is amortized over the period of lease.
1.4 INVESTMENTS
Long-term Investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management. Current
investments are valued at lower of cost and fair value.
1.5 INVENTORIES
Inventories are valued at lower of cost and net realisable value. The
cost is determined on the basis of FIFO Method. For the purpose of
finished goods and work-in-process, cost comprises of material cost
plus appropriate share of production overheads and excise duty,
wherever applicable.
1.6 EMPLOYEE BENEFITS
Defined Contribution Plan:
a) In accordance with the provisions of Employees Provident Funds and
Miscellaneous Provisions Act,1952, eligible employees of the Company
are entitled to receive benefits with respect to provident fund, a
defined contribution plan in which both the Company and the employee
contribute monthly at a determined rate (currently 12% of employee's
basic salary). Company's contribution to PF is charged to Profit & Loss
Account.
b) The Company has taken a Policy with Life Insurance Corporation of
India for the payment of gratuity, a defined contribution plan and
premium paid on the policy has been charged to Profit & Loss Account in
the year of payment.
Defined Benefit Plan:
a) Gratuity to the Managing Director and Joint Managing Director, who
are not covered under the policy with LIC has been provided for on the
basis of Actuarial valuation, which is based on their contractual
terms.
b) Liability for Managing Director and Joint Managing Director leave
encashment benefits is accounted on cash basis.
1.7 FOREIGN CURRENCYTRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. In case of liabilities
incurred for the acquisition of fixed assets, the loss or gain on
conversion (at the rate prevailing at the year end) is recognized as
income or expenses in the profit & loss account. Current Assets and
Liabilities (Other than those relating to fixed assets) are restated at
the rate prevailing at the year end. The difference between the year
end rate and the exchange rate at the date of the transaction is
recognized as income or expense in the profit and loss account.
1.8 REVENUE RECOGNITION
Sale of goods is recognized at the point of despatch to the customer.
Income from Wind Power is recognized at the point of generation. Sales
includes excise duty but excludes Sales Tax and discounts. Other
Income are accounted on accrual basis.
1.9 TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised, subject to
the consideration of prudence in respect of deferred tax assets, on
timing difference, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods except for carried forward
losses, which are recognized only if there is virtual certainty of
their realization.
1.10 IMPAIRMENT
An asset is treated as Impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit & Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods
is reversed if there has been a change in the estimate of recoverable
amount.
1.11 PROVISIONS AND CONTINGENT LIABILITIES
A provision is recognized when there is a present obligation as a
result of past events for which it is probable that an outflow of
resources will be required to settle the obligation and in respect of
which a reliable estimate can be made. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are disclosed after an evaluation of the facts and
legal aspects of the matters involved.
Mar 31, 2011
A) ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost
convention, in accordance with applicable accounting standards notified
by the companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956.
B) FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost is
inclusive of freight, duties, levies and any directly attributable cost
of bringing the assets to their working condition for intended use.
C) DEPRECIATION/AMORTISATION
Depreciation is provided on Straight Line Method at the rates and in
the manner specified in Schedule XIV of the Companies Act, 1956, except
for Wind Mills, which is provided on Written Down Value Method.
Leasehold land is amortized over the period of lease.
D) INVESTMENTS
Long-term Investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management. Current
investments are valued at lower of cost and fair value.
E) INVENTORIES
Inventories are valued at lower of cost and net realisable value. The
cost is determined on the basis of FIFO Method. For the purpose of
finished goods and work-in-process, cost comprises of material cost
plus appropriate share of production overheads and excise duty,
wherever applicable
F) EMPLOYEE BENEFITS
i) Defined Contribution Plan:
a) In accordance with the provisions of Employees Provident Funds and
Miscellaneous Provisions Act, 1952, eligible employees of the Company
are entitled to receive benefits with respect to provident fund, a
defined contribution plan in which both the Company & the employee
contribute monthly at a determined rate (currently 12% of employees
basic salary). Companys contribution to Provident Fund is charged to
Profit & Loss Account.
b) The Company has taken a Policy with Life Insurance Corporation of
India for the payment of gratuity, a defined contribution plan and
premium paid on the policy has been charged to Profits Loss Account in
the year of payment.
ii) Defined Benefit Plan:
a) Gratuity to the Managing Director and Joint Managing Director, who
are not covered under the policy with LIC has been provided for on the
basis of Actuarial valuation, which is based on their contractual
terms.
b) Liability for employees leave encashment benefits is provided for
on the basis of Actuarial valuation, except in the case of Managing
Director and Joint Managing Director, the same is accounted on cash
basis.
G) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. In case of liabilities
incurred for the acquisition of fixed assets, the loss or gain on
conversion (at the rate prevailing at the year end) is recognized as
income or expenses in the profits loss account. Current Assets and
Liabilities (Other than those relating to fixed assets) are restated at
the rate prevailing at the year end. The difference between the year
end rate and the exchange rate at the date of the transaction is
recognized as income or expense in the profit and loss account.
H) REVENUE RECOGNITION
Sale of goods is recognized at the point of despatch to the customer.
Income from Wind Power is recognized at the point of generation. Sales
includes excise duty but excludes Sales Tax and discounts. Other
Income are accounted on accrual basis.
I) TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised, subject to the
consideration of prudence in respect of deferred tax assets, on timing
difference, being the differences between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods except for carried forward losses, which are
recognized only if there is virtual certainty of their realization.
J) IMPAIRMENT
An asset is treated as Impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
K) PROVISIONS AND CONTINGENT LIABILITIES
A Provision is recognized when there is a present obligation as a
result of past events for which it is probable that an outflow of
resources will be required to settle the obligation and in respect of
which a reliable estimate can be made These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liablities are disclosed after an evaluation of the facts
and legal aspects of the matters involved.
Mar 31, 2010
A) ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost
convention, in accordance with applicable accounting standards notified
by the companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956.
B) FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost is
inclusive of freight, duties, levies and any directly attributable cost
of bringing the assets to their working condition for intended use.
C) DEPRECIATION/AMORTISATION
Depreciation is provided on Straight Line Method at the rates and in
the manner specified in Schedule XIV of the Companies Act, 1956, except
for Wind Mills, which is provided on Written Down Value Method.
Leasehold land is amortized over the period of lease.
D) INVESTMENTS
Long-term Investments are stated at cost. Provision for diminution in
the value of long-term investments is made only if such a decline is
other than temporary in the opinion of the management. Current
investments are valued at lower of cost and fair value.
E) INVENTORIES
Inventories are valued at lower of cost and net realisable value. The
cost is determined on the basis of FIFO Method. For the purpose of
finished goods and work-in-process, cost comprises of material cost
plus appropriate share of production overheads and excise duty,
wherever applicable.
F) EMPLOYEE BENEFITS
i) Defined Contribution Plan :
a) In accordance with the provisions of Employees Provident Funds and
Miscellaneous Provisions Act, 1952, eligible employees of .the Company
are entitled to receive benefits with respect to provident fund, a
defined contribution plan in which both the Company & the employee
contribute monthly at a determined rate (currently 12% of employees
basic salary). Companys contribution to Provident Fund is charged to
Profit & Loss Account.
b) The Company has taken a Policy with Life Insurance Corporation of
India for the payment of gratuity, a defined contribution plan and
premium paid on the policy has been charged to Profit & Loss Account in
the year of payment.
ii) Defined Benefit Plan :
a) Gratuity to the Managing Director and Joint Managing Director, who
are not covered under the policy with LIC has been provided for on the
basis of Actuarial valuation, which is based on their contractual
terms.
b) Liability for employees leave encashment benefits has been provided
for on the basis of Actuarial valuation, except in the case of Managing
Director and Joint Managing Director, the same is accounted on cash
basis.
G) FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of the transaction. In case of liabilities
incurred for the acquisition of fixed assets, the loss or gain on
conversion (at the rate prevailing at the year end) is recognized as
income or expenses in the profit & loss account. Current Assets and
Liabilities (Other than those relating to fixed assets) are restated at
the rate prevailing at the year end. The difference between the year
end rate and the exchange rate at the date of the transaction is
recognized as income or expense in the profit and loss account.
H) REVENUE RECOGNITION
Sale of goods is recognized at the point of despatch to the customer.
Income from Wind Power is recognized at the point of generation except
power generation guarantee claim which is accounted on cash basis.
Sales includes excise duty but excludes Sales Tax. Income from wind
power includes power generation guarantee claim. Other Income are
accounted on accrual basis.
I) TAXATION
Current tax is determined as the amount of tax payable in respect of
taxable income for the year . Deferred tax is recognised, subject to
the consideration of prudence in respect of deferred tax assets, on
timing difference, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
J) IMPAIRMENT
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
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Gandhi Special Tubes Ltd. Company Details
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Gandhi Special Tubes Ltd. Reports
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Gandhi Special Tubes Ltd. Corporate Announcements
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