1 The Cash Flow Statement has been prepared under ''Indirect Method'' in
accordance with the requirement of Accounting Standard-3 Cash Flow
Statement issued under Companies (Accounting Standards) Rules, 2006
2 Significant Accounting Policies and Notes to accounts (Note 31) forms
an integral part of Cash Flow Statement.
3 Previous year''s figures have been regrouped wherever necessary to
conform to this year''s classification
(a) Terms of Securities convertible into Equity Shares:
38,00,000 Share Warrants allotted on 15th March 2011 at an issue price
of A60/- each, comprising of A10/- each towards face value and A50/-
each towards premium are convertible at the option of the holder
thereof in one or more tranches to 38,00,000 Equity Shares on or before
expiry of 18 months from the date of allotment. The last date for
exercise of option by the holder is 15th September 2012.
(b) Terms / rights attached to Equity Shares
The Company has only one class of Equity Shares having par value of
A10/- per Share. Each holder of Equity Shares is entitled to one vote
per Share. The Company declares and pays dividend in Indian Rupees.
(c) During the year ended 31st March 2012, the amount of per Share
dividend recognised as distribution to Equity Shareholders was Nil.
(Previous year A1.80)
(d) In the event of liquidation of the Company, the holders of the
Equity Shares will be entitled to receive remaining assets of the
Company after distribution of all preferential amounts. The
distribution will be in proportion to the number of Equity Shares held
by the shareholders.
During the year on exercise of option of conversion by the allottee,
18,30,000 (previous year 4,00,000) Share Warrants to 18,30,000
(previous year 4,00,000) Equity Shares were allotted and accordingly a
sum of Rs 1,83,00,000/- (previous year Rs 40,00,000/-) and Rs
9,15,00,000/- (previous year Rs 2,00,00,000/-) was adjusted to Paid-up
Capital (at Rs 10/- per share) and Share Premium account (at Rs 50/-
per share) respectively.
i. Term Loan borrowings from banks are secured by first mortgage and
charge on all the immovable and movable assets, present and future,
subject to the charges created in favour of the Company''s Bankers on
current assets for securing borrowings for working capital and
guaranteed by two Directors of the Company. The Principal amount on
these term loans are generally repayable in 32 equated quarterly
installments after moratorium period of one year with interest payable
on monthly rests. The interest rates vary from 13.5% to 15.5% p.a. and
interest amount payable at monthly rests.
The period of maturity with reference to four term Loan Borrowings from
Balance Sheet date are: (a) Loan 1 comprises nine quarterly
installments comprising eight quarterly installments of Rs 37188000/-
each and one installment of Rs 37172000/- (Rs ) Loan 2 comprises twelve
quarterly installments of Rs 27375000/- each; eight quarterly
installments of Rs 32625000/- each and six quarterly installments of Rs
7875000/- each and (c) Loan 3 comprises twenty four quarterly
installments of Rs 12550000/- each and one installment of Rs
10950000/-. Loan 4 is yet to be drawn fully and hence period of
maturities is not determined.
ii. Borrowings from other parties are on hypothecation of assets and
guaranteed by the Managing Director of the Company. These loans are
mostly repayable in 36 equated monthly installments including interest.
The interest rates vary from 10.5% to 12.5% p.a. The future maturities
from the Balance Sheet date comprises (a) loan 1 comprises ten
installments of A361111/- each and Loan two comprises fourteen
installments of Rs 132004/- each.
iii. The Sales Tax Deferment is an interest free loan granted by the
Government of Andhra Pradesh on sales tax collections and repayable in
ten installments, each installment comprising one year collections. The
period of maturies from the Balance Sheet date of this borrowal
comprises two installments of Rs 32650739/- and Rs 38487138/-.
iv. The above borrowings and interest due thereon have been paid upto
date and there are no continuing defaults.
i. Working capital loans from banks and Buyer''s credit are secured by
hypothecation of stocks and book debts and further secured by second
charge on fixed assets of the Company and guaranteed by two Directors
of the Company. The rate of interest on working capital loans varies
from 14.50% to 15.25% p.a. The rate of interest in respect of Buyer''s
credit varies from LIBOR 110 bps to LIBOR 250 bps p.a.
ii. The rate of interest in respect of loans from related parties is
iii. The above borrowings and interest due there on have been paid upto
date and there are no defaults.
1 CORPORATE INFORMATION:
Sathavahana Ispat Limited (the Company) is a listed company in India
and is engaged in the manufacture of Pig iron, Metallurgical Coke with
Co-generation of Power. The Pig Iron plant is in Anantapur District of
Andhra Pradesh and the Metallurgical Coke with Co-generation Power
facility is in Bellary District, Karnataka. The Company''s head office
is at Hyderabad, India. A major portion of Metallurgical Coke is
captively used for manufacture of Pig Iron. The Company''s turnover is
mainly from domestic markets. The Equity Shares of the Company are
listed on The Bombay Stock Exchange Limited and The National Stock
Exchange of India Limited.
2 PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS:
During the year ended 31st March 2012, the Revised Schedule VI notified
under the Companies Act, 1956 has become applicable to the Company for
preparation and presentation of its financial statements. The adoption
of Revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirements applicable in the
3 In the opinion of the Board, assets other than Fixed Assets and
non-current investments have a value on realisation in the ordinary
course of business atleast equal to the amount at which they are stated
and provision for all known liabilities have been made.
4 EXCISE DUTY ON OPENING AND CLOSING STOCKS:
Excise Duty on sales for the year has been disclosed as reduction from
turnover. Excise Duty relating to the difference between closing stock
and opening stock has been included in Note 27 Changes in inventories
of finished goods, work-in-progress and scrap.
(a) The present value of obligation in respect of provision for payment
leave encashment is determined based on actuarial valuation using the
projected unit credit method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation
recognised and charged off to Statement of Profit and Loss.
(b) The estimates of rate of escalation in salary considered in
actuarial valuation is determined after taking into account inflation,
seniority, promotion and other relevant factors including supply and
demand in the employment market. The above information is certified by
5 DISCLOSURES UNDER ACCOUNTING STANDARD 17 ON SEGMENT REPORTING:
The Company''s business consists of two reportable segments viz., Pig
Iron and Metallurgical Coke with Co-generation Power as per Accounting
Standard 17 Segment Reporting issued under the Companies (Accounting
Standard) Rules 2006. Segment information has been prepared in
conformity with the accounting policies adopted for preparing and
presenting the financial statements of the Company. Inter/Intra segment
transfers are accounted at selling price to the transfering segment.
Inter segment transfers are eliminated on consolidation. The following
tables present the revenue, profit or loss, assets and liabilities
information relating to the business/geographical segment for the year
ended 31st March 2012.
6 DISCLOSURES UNDER ACCOUNTING STANDARD 19 ON LEASES:
Information on leases as per Accounting Standard 19 Leases issued
under the Companies (Accounting Standard) Rules 2006: Operating lease
The Company has various operating leases for various premises that are
renewable on a periodic basis and cancellable at its option. Rental
expenses for operating leases recognised in the Statement of Profit and
Loss for the year is Rs 4503210/- (previous year Rs 3970822/-)