Click it and Unblock the Notifications
Notes to Accounts of Sunflag Iron & Steel Company Ltd.
Mar 31, 2025
XII. Provisions, contingent liabilities, contingent assets and commitments
General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable
that the outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation. When the Company expects some or all of provision to be reimbursed, for example, under an insurance
contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense
relating to provision is presented in the statement of profit & loss net of any reimbursement.
If the effect of the time value of money is material, provisions are disclosed using a current pre-tax rate that reflects, when appropriate,
the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as
finance cost.
Mine restoration or assets retirement obligation
Mine restoration expenditure is provided for in the statement of profit and loss based on present value of estimated expenditure
required to be made towards restoration and rehabilitation at the time of vacation of mine. The cost estimates are reviewed periodically
and are adjusted to reflect known developments which may have an impact on the cost estimates or life of operations. The unwinding of
the discount on provision is shown as a finance cost in the statement of profit and loss.
Contingent liability is disclosed in the case of :
⢠There is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of the Company.
⢠A present obligation arising from past event, when it is not probable that as outflow of resources will be required to settle the
obligation.
⢠¦ A present obligation arises from the past event, when no reliable estimate is possible.
⢠A present obligation arises from the past event, unless the probability of outflow is remote.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
Onerous contract
A provision for onerous contracts is measured at the present value of the lower expected costs of terminating the contract and the
expected cost of continuing with the contract. Before a provision is established, the Company recognizes impairment on the assets
with the contract.
Contingent assets
Contingent assets are not recognized. However, when the realization of income is virtually certain, then the related asset is no longer a
contingent asset, but it is recognized as an asset.
XIII. Segment accounting and reporting
The company''s business falls within a primary business segment viz. '''' Iron and Steel Businessâ.
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur
expenses, whose operating results are regularly reviewed by the company''s Chief Operating Decision Maker (âCODMâ) to make
decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the
CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by
business segments and geographic segments.
The operating segments have been identified on the basis of the nature of products/services.
i. Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter-segment
revenue.
ii. Expenses that are directly identifiable with/allocable to the segments are considered for determining the segment result. Expenses
not allocable to segments are included under unallocable expenditure.
iii. Income not allocable to the segments is included in unallocable income.
iv. Segment results includes margin or inter segment and sales which are reduced in arriving at the profit before tax of the Company.
v. Segment assets and Liabilities include those directly identifiable with the respective segments. Assets and liabilities not allocable to
any segment are classified under unallocable category.
XIV. Investment in Subsidiaries, Joint Ventures & Associates
Investment in subsidiaries, joint ventures & associates are carried at cost in accordance with the option given in Ind AS 27, âSeparate
Financial Statementsâ. The cost comprises price paid to acquire investment and directly attributable cost.
On transition to IND AS, the Company has adopted optional exemption under IND AS 101 to consider carrying value as deemed cost.
Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its
recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference
between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
XV. Government grant / assistance
Government grant with a condition to purchase, construct to otherwise acquire long term assets are initially measured based on grant
receivable under the scheme. Such grant are recognized in the statement of profit & loss on a systematic basis over the useful life of the
asset. Amount of benefits receivable in excess of grant income accrued based on usage of the assets is accounted as Government
grant received in advance. Changes in estimate are recognized prospectively over the remaining useful life of assets. Government
revenue grants relating to costs are deferred and recognized in the statement of profit and loss over the period necessary to match
them with the costs that they intended to compensate.
Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached
to them and that the grants will be received.
XVI. Taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income-Tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
Current income tax relating to items recognized directly in equity is recognised in equity and not in the statement of profit and loss.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purpose at reporting date.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted
by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled.
The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that
includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable
that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized
amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
XVII. Revenue recognition
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, regardless of when the payment is being made. Revenue from sale of manufactured goods i.e. steel rolled
products is recognised in accordance with Ind As 115 issued by Ministry of Corporate Affairs and 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.
The specific recognition criteria described below must be met before revenue is recognized:
a) Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed
to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration
received or receivable, net of returns and allowances, trade discounts and volume rebates.
Ind AS 115 provides for a five step model for the analysis of Revenue transactions. The model specifies that revenue should be
recognised when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be
entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenue
and cash flows arising from the entity''s contracts with customers.
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the
consideration we expect to receive in exchange for those products or services.
The Company provides cash and in kind discounts at fair value to customers. These benefits are passed to customers on
achievement of certain target of sales by respective customers.
Consideration received is allocated between the products sold and discount to be allowed to customers. Fair value of the in kind
discount is determined by applying principle of Ind AS 113, i.e. at market rate. The fair value of the in kind discount is deferred and
recognised as revenue when the in kind discount is issued.
Trade receivables - A receivable is recognised when the goods are delivered and to the extent that it has an unconditional
contractual right to receive cash or other financial assets (i.e., only the passage of time is required before payment of the
consideration is due). Trade receivables is derecognised when the Company transfers substantially all the risks and rewards of
ownership of the asset to another party including discounting of bills on a nonrecourse basis.
Refund liabilities - A refund liability is the obligation to refund some or all of the consideration received (or receivable) from the
customer and is measured at the amount the Company ultimately expects it will have to return to the customer including volume
rebates and discounts. The Company updates its estimates of refund liabilities at the end of each reporting period.
b) Other operating income
Revenue from job work charges, incentives on exports and other government incentives related to operations are recognized in
books after due consideration of certainty of utilization / receipt of such incentives.
c) Other income
Interest income on fixed deposit with banks and security deposit MSEB is recognized on time proportion basis taking into account
the amount outstanding and the rates applicable.
Dividend income from investments is recognized when the Company''s right to receive payment is established.
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no
uncertainty in receiving the claims.
XVIII. Foreign currency translation / conversion
Standalone financial statements have been presented in Indian Rupees (''), which is the Company''s functional and presentation
currency.
a) Initial recognition
Foreign currency transactions are initially recorded in the functional currency, using the exchange rate prevailing at the date of the
transaction.
b) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items,
which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date
of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign
currency, are translated using the exchange rate at the date when such value was determined.
c) Exchange differences
Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are
recognized as income or expense in the statement of profit and loss.
d) Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or
loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are
recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down, the fee is
capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
e) Borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred and exchange difference arising from foreign currency
borrowings to the extent regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent
not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan.
Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from the commencement of activities relating
to construction / development of the qualifying assets up to the date of capitalization of such assets is added to the cost of the
assets.Other borrowing cost are expensed in the period in which they are incurred.
XIX. Equity shares
Ordinary shares are classified as equity. Incremental cost net of taxes directly attributable to the issue of new equity shares are reduced
from retained earnings, net of taxes.
XX. Financial Instruments
1. Initial recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the
instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivable which are
initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets
and financial liabilities that are not at fair value through profit or loss are added to or deducted from the fair value on initial
recognition.
2. Subsequent measurement
Non-derivative financial instruments
a) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the
asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss. A
financial asset i.e. equity which is not classified as FVOCI, are subsequently fair valued through profit or loss.
d) Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the
holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of debt
instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of
loss allowance determined as per impairment requirement of Ind AS 109 and the amount recognised less cumulative
amortisation.
e) Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair
valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an
amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-
month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at
lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to
the amount that is required to be recognised is recognised as an impairment gain or loss in the statement of profit and loss.
f) Cash and cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, which are subject to an insignificant risk of changes in value.
g) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, for trade and other payables
maturing with one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of
these instruments.
h) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
3. De- recognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it
transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of financial
liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled
or expires.
4. Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no
reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the
business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are
evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an
activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively
from the reclassification date which is the first day of the immediately next reporting period following the change in business model.
The Company does not restate any previously recognised gains, losses (including, impairment gains or losses) or interest.
5. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and
settle the liabilities simultaneously.
(XI. Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either :
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by
using the asset in its highest and the best use or by selling it to another market participant that would use the asset in its highest and
best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole :
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the standalone financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature,
characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.
CXII. Critical accounting estimates, assumptions and judgements
In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and
judgments, which have significant effect on the amounts recognised in the financial statement:
a) Property, Plant and Equipment
External adviser or internal technical team assess the remaining useful lives and residual value of property, plant and equipment.
Management believes that the assigned useful lives and residual value are reasonable.
b) Income taxes
Management judgement is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The
Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ
from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
c) Contingencies
Management judgment is required for estimating the possible outflow of resources, if any, in respect of Contingencies / claim /
litigations against the Company as it is possible to predict the outcome of pending matters with accuracy.
d) Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated
irrecoverable amounts. Individual trade receivables are written off when management deems them not to be collectible.
Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the
financial assets.
e) Mine restoration obligation
In determining the fair value of the mine restoration obligation, the Company uses technical estimates to determine the expected
cost to restore the mines and the expected timing of these costs. Discount rates are determined based on the government bond of
similar tenure.
f) Defined benefit obligations
The cost of defined benefit gratuity plans, and post-retirement medical benefit is determined using actuarial valuations. The
actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension
increases. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.
XXIII. Recent Accounting pronouncement :
On March 24, 2021, the Ministry of Corporate Affairs (âMCAâ) through a notification, amended Schedule III of the Companies Act,
2013. The amendments revise Division I, II and III of Schedule III and are applicable from April 1,2021. Key amendments relating to
Division II which relate to companies whose financial statements are required to comply with Companies (Indian Accounting
Standards) Rules 2015 are:
Balance Sheet :
a. Lease liabilities should be separately disclosed under the head ''financial liabilities'', duly distinguished as current or non¬
current.
b. Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to prior period
errors and restated balances at the beginning of the current reporting period.
c. Specified format for disclosure of shareholding of promoters.
d. Specified format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible asset under
development.
e. If a Company has not used funds for the specific purpose for which it was borrowed from banks and financial institutions, then
disclosure of details of where it has been used.
f. Specific disclosure under ''additional regulatory requirement'' such as compliance with approved schemes of arrangements,
compliance with number of layers of companies, title deeds of immovable property not held in name of Company, loans and
advances to promoters, directors, key managerial personnel (KMP) and related parties, details of benami property held etc.
g. Material accounting policies rather than their significant accounting policies. Accounting policy information, together with other
information, is material when it can reasonably be expected to influence decisions of primary users of general purpose
financial statements. The Company does not expect this amendment to have any significant impact on its financial
statements.
Recent Pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standard 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) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023,
applicable from April 1, 2023, as below:
h. Ind AS 1 - Presentation of Financial Statements The amendments require companies to disclose their material accounting
policies rather than their significant accounting policies. Accounting policy information, together with other information, is
material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements.
The Company does not expect this amendment to have any significant impact on its financial statements.
i. Ind AS 12 - Income Taxes The amendments clarify how companies account for deferred tax on transactions such as leases
and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and
24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal
taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its financial statements.
j. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors The amendments will help entities to distinguish
between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced
with a definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial
statements that are subject to measurement uncertaintyâ. Entities develop accounting estimates if accounting policies require
items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect
this amendment to have any significant impact on its financial statements.
Statement of profit and loss :
k. Additional disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency
specified under the head ''additional information'' in the notes forming part of the standalone financial statements.
The amendments are extensive and the Company will evaluate the same to give effect to them as required by law.
35. Capital management
For the purpose of the Company''s capital management, equity includes issued equity capital, securities premium and all other equity
reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less current investments
and cash and cash equivalents. The Companyâs capital management is intended to create value for shareholders by facilitating the
achievement of long-term and short-term goals of the Company.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of
the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short
term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Company''s capital management amongst other things, aims to ensure that it meets financial
covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
Note :
i) To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and takes necessary
actions to maintain the requisite capital structure.
ii) No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2025 and
31st March, 2024.
36. Employees benefit
a) Defined contribution plans
The Company operates defined contribution retirement benefit plans for all qualifying employees. Under these plans, the Company is
required to contribute a specified percentage of payroll costs. Company''s contribution to provident and other funds recognised in
statement of profit and loss of ''922 lakhs (Previous Year ''851 lakhs)
b) Defined benefit plans
The Company sponsors funded defined benefit plans for all qualifying employees. The level of benefits provided depends on the
memberâs length of service and salary at retirement age.
The gratuity plan is covered by The Payment of Gratuity Act, 1972. Under the gratuity plan, the eligible employees are entitled to get
the benefit at the time of retirement / separation at the rate of 15 daysâ salary for each year of service until the retirement age of 60. The
vesting period for gratuity as payable under The Payment of Gratuity Act, 1972 is 5 years.
The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, salary escalation risk and
liquidity risk.
Investment Risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Interest Rate risk : The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in
the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as
shown in financial statements).
The following methods and assumptions were used to estimate the fair values:
i) The fair values of derivatives are on MTM as per Bank.
ii) Company has opted to fair value its Long term and Current investments through other Comprehensive income.
iii) Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective
interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered
for calculating effective interest rate.
Fair value hierarchy: The Company uses following hierarchy for determining and / or disclosing the fair value of financial instruments by
valuation techniques:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level-1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
39. Financial Risk Management
Financial risk factors
The Companyâs principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, and financial
guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Company
has loan, Investment, trade receivables, other receivables, cash and short-term deposits that arise directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of
these risks and also ensure that the Companyâs financial risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs
policy that no trading in derivatives for speculative purposes will be undertaken.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below :
i) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and
commodity risk. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.This is based on the financial assets and financial liabilities held as at 31st March,
2025 and 31st March, 2024.
a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. In order to optimize the Company''s position with regards to interest expenses to manage the interest rate risk, treasury
performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial
instruments in its total loan portfolio. The Company''s borrowings have been contracted at floating rates of interest. Accordingly,
carrying value of such borrowings which approximates fair value.
c) Equity price risk
Equity price risk is related to change in market reference price of investments in equity securities held by the Company.
The fair value of quoted investments held by the Company exposes the Company to equity price risks. In general, these investments
are not held for trading purposes.
Equity price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to equity price at the end of the reporting period.
A 5% change in equity prices of such securities held as at 31 March 2025 and 31 March 2024, would result in an impact of ''38,618
lakhs and ''18,060 Lakhs respectively on equity before considering tax impact.
ii) Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to
suppliers) and from its financing activities, including deposits and other financial instruments.
Trade receivables for which loss allowance is measure using life time expected credit losses (ECL)
Customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk
management. The Company continuously monitors the economic environment in which it operates. The Company manages its Credit
risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the
Company grants credit terms in the normal course of business. An impairment analysis is performed at each quarter end on an
individual basis for major customers.
42. Subsequent events
No adjusting or significant non- adjusting events have occurred between the reporting date and date of authorization of these financial
statements.
43. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards
Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on
13th November, 2020, and has invited suggestions from stakeholders, which are under active consideration by the Ministry. The
Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial
statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
44. Vendor''s / Customer''s reconciliations
The Company is obtaining confirmations and reconciliation with its trade receivables, trade payables and other dues receivables
regularly. The confirmations to the extent received have been reconciled and adjustments, if any, have been made. The others are
pending for confirmations, reconciliations and adjustments, if any. However, the management does not expect any significant variations
in the existing status and material financial impact.
45. GST reconciliations
The Company is in the process of reconciliation of Input Tax Credit as per Books and GST Portal. The reconciliation to the extent done
have been accounted for in the books of accounts. The management does not expect any material financial impact.
47. Other Statutory information
i) The Company does not have any benami property, and no proceeding has been initiated against the Company for holding any
benami property.
ii) The Company does not have any transactions with companies struck off.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act,1961(such as, search or survey or any other
relevant provision of the Income Tax Act, 1961)
vi) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read
with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).
vii) The Company has not been declared willful defaulter by any bank or any other financial institution at any time during the financial
year.
viii) All immovable properties are held in the name of the Company.
48. On 27th May, 2025 the Board of Directors of the Company had proposed a dividend of '' 0.75 per fully paid up equity share of '' 10 each for
the year ended 31st March, 2025 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would
result in a cash outflow of approximately '' 1352 lakhs.
49. Previous year''s figures have been regrouped / re-classified wherever necessary to make them more comparable.
As per our report of even date as attached For and on behalf of Board of Directors of Sunflag Iron and Steel Company Limited
For NSBP & CO. PRANAV BHARDWAJ S. MAHADEVAN CA VINITA BAHRI
Chartered Accountants MANAGING DIRECTOR CHIEF FINANCIAL OFFICER DIRECTOR
FRN: 001075N DIN 00054805 DIN 03109454
RAM NIWAS JALAN RAMCHANDRA DALVI CA NEELAM KOTHARI CA M. A. V. GOUTHAM
Partner DIRECTOR (TECHNICAL) DIRECTOR DIRECTOR
M. No. 82389 DIN 00012065 DIN 06709241 DIN 00101447
ASHUTOSH MISHRA ANAND S. KAPRE TIRTHNATH JHA
New Delni Nagpur HEAD COMPANY SECRETARY DIRECTOR DIRECTOR
27â May, 2025 27l May, 2025 M. No. ACS 23011 DIN 00019530 DIN 07593002
Mar 31, 2024
XII. Provisions, contingent liabilities, contingent assets and commitments General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to provision is presented in the statement of profit & loss net of any reimbursement.
If the effect of the time value of money is material, provisions are disclosed using a current pre-tax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.
Mine restoration or assets retirement obligation
Mine restoration expenditure is provided for in the statement of profit and loss based on present value of estimated expenditure required to be made towards restoration and rehabilitation at the time of vacation of mine. The cost estimates are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost estimates or life of operations. The unwinding of the discount on provision is shown as a finance cost in the statement of profit and loss.
Contingent liability is disclosed in the case of
⢠There is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company.
⢠A present obligation arising from past event, when it is not probable that as outflow of resources will be required to settle the obligation.
⢠¦ A present obligation arises from the past event, when no reliable estimate is possible.
⢠A present obligation arises from the past event, unless the probability of outflow is remote.
Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
Onerous contract
A provision for onerous contracts is measured at the present value of the lower expected costs of terminating the contract and the expected cost of continuing with the contract. Before a provision is established, the Company recognizes impairment on the assets with the contract.
Contingent assets
Contingent assets are not recognized. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.
XIII. Segment accounting and reporting
The company''s business falls within a primary business segment viz. '''' Iron and Steel Businessâ.
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company''s Chief Operating Decision Maker (âCODMâ) to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.
The operating segments have been identified on the basis of the nature of products/services.
i. Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter-segment revenue.
ii. Expenses that are directly identifiable with/allocable to the segments are considered for determining the segment result. Expenses not allocable to segments are included under unallocable expenditure.
iii. Income not allocable to the segments is included in unallocable income.
iv. Segment results includes margin or inter segment and sales which are reduced in arriving at the profit before tax of the Company.
v. Segment assets and Liabilities include those directly identifiable with the respective segments. Assets and liabilities not allocable to any segment are classified under unallocable category.
XIV. Investment in Subsidiaries, Joint Ventures & Associates
Investment in subsidiaries, joint ventures & associates are carried at cost in accordance with the option given in Ind AS 27, âSeparate Financial Statementsâ. The cost comprises price paid to acquire investment and directly attributable cost.
On transition to INDAS, the Company has adopted optional exemption under IND AS 101 to consider carrying value as deemed cost. Where the carrying amount of an investment in greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
XV. Government grant / assistance
Government grant with a condition to purchase, construct to otherwise acquire long term assets are initially measured based on grant receivable under the scheme. Such grant are recognized in the statement of profit & loss on a systematic basis over the useful life of the asset. Amount of benefits receivable in excess of grant income accrued based on usage of the assets is accounted as Government grant received in advance. Changes in estimate are recognized prospectively over the remaining useful life of assets. Government revenue grants relating to costs are deferred and recognized in the statement of profit and loss over the period necessary to match them with the costs that they intended to compensate.
XVI. Taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current income tax relating to items recognized directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
XVII. Revenue recognition
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, regardless of when the payment is being made. Revenue from sale of manufactured goods i.e. steel rolled products is recognised in accordance with Ind AS 115 issued by Ministry of Corporate Affairs and 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.
The specific recognition criteria described below must be met before revenue is recognized:
a) Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
Ind AS 115 provides for a five step model for the analysis of Revenue transactions. The model specifies that revenue should be recognised when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services.
The Company provides cash and in kind discounts at fair value to customers. These benefits are passed to customers on achievement of certain target of sales by respective customers.
Consideration received is allocated between the products sold and discount to be allowed to customers. Fair value of the in kind discount is determined by applying principle of Ind AS 113, i.e. at market rate. The fair value of the in kind discount is deferred and recognised as revenue when the in kind discount is issued.
b) Other operating income
Revenue from job work charges, incentives on exports and other government incentives related to operations are recognized in books after due consideration of certainty of utilization / receipt of such incentives.
c) Other income
Interest income on fixed deposit with banks and security deposit MSEB is recognized on time proportion basis taking into account the amount outstanding and the rates applicable.
Dividend income from investments is recognized when the Company''s right to receive payment is established.
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.
XVIII. Foreign currency translation / conversion
Standalone financial statements have been presented in Indian Rupees (''), which is the Company''s functional and presentation currency.
a) Initial recognition
Foreign currency transactions are initially recorded in the functional currency, using the exchange rate prevailing at the date of the transaction.
b) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
c) Exchange differences
Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the statement of profit and loss.
d) Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
e) Borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred and exchange difference arising from foreign currency borrowings to the extent regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from the commencement of activities relating to construction / development of the qualifying assets up to the date of capitalization of such assets is added to the cost of the assets. Other borrowing cost are expensed in the period in which they are incurred.
KIX. Equity shares
Ordinary shares are classified as equity. Incremental cost net of taxes directly attributable to the issue of new equity shares are reduced from retained earnings, net of taxes.
KX. Financial Instruments
1. Initial recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivable which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to or deducted from the fair value on initial recognition.
2. Subsequent measurement Non-derivative financial instruments
a) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss. A financial asset i.e. equity which is not classified as FVOCL, are subsequently fair valued through profit or loss.
d) Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirement of Ind AS 109 and the amount recognised less cumulative amortisation.
e) Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in the statement of profit and loss.
f) Cash and cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
g) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, for trade and other payables maturing with one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
h) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
3. De- recognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of financial liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
4. Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including, impairment gains or losses) or interest.
5. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
XXI. Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either :
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and the best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole : Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable For assets and liabilities that are recognised in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as explained above.
XXII. Critical accounting estimates, assumptions and judgements
In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgments, which have significant effect on the amounts recognised in the financial statement:
a) Property, Plant and Equipment
External adviser or internal technical team assess the remaining useful lives and residual value of property, plant and equipment. Management believes that the assigned useful lives and residual value are reasonable.
b) Income taxes
Management judgement is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
c) Contingencies
Management judgment is required for estimating the possible outflow of resources, if any, in respect of Contingencies / claim / litigations against the Company as it is possible to predict the outcome of pending matters with accuracy.
d) Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not to be collectible.
Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.
e) Mine restoration obligation
In determining the fair value of the mine restoration obligation, the Company uses technical estimates to determine the expected cost to restore the mines and the expected timing of these costs. Discount rates are determined based on the government bond of similar tenure.
XXIII. Recent Accounting pronouncement :
On March 24, 2021, the Ministry of Corporate Affairs (âMCAâ) through a notification, amended Schedule III of the Companies Act, 2013. The amendments revise Division I, II and III of Schedule III and are applicable from April 1,2021. Key amendments relating to Division II which relate to companies whose financial statements are required to comply with Companies (Indian Accounting Standards) Rules 2015 are:
Balance Sheet :
a. Lease liabilities should be separately disclosed under the head ''financial liabilities'', duly distinguished as current or noncurrent.
b. Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to prior period errors and restated balances at the beginning of the current reporting period.
c. Specified format for disclosure of shareholding of promoters.
d. Specified format for ageing schedule of trade receivables, trade payables, capital work-in-progress and intangible asset under development.
e. If a Company has not used funds for the specific purpose for which it was borrowed from banks and financial institutions, then disclosure of details of where it has been used.
f. Specific disclosure under ''additional regulatory requirement'' such as compliance with approved schemes of arrangements, compliance with number of layers of companies, title deeds of immovable property not held in name of Company, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties, details of benami property held etc.
g. Material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact on its financial statements.
Recent Pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standard 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) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:
h. Ind AS 1 - Presentation of Financial Statements The amendments require Companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact on its financial statements.
i. Ind AS 12 - Income Taxes The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its financial statements.
j. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact on its financial statements.
Statement of profit and loss :
i) Additional disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency specified under the head ''additional information'' in the notes forming part of the standalone financial statements.
The amendments are extensive and the Company will evaluate the same to give effect to them as required by law.
40. Financial Risk Management Financial risk factors
The Companyâs principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Company has loan, Investment, trade receivables, other receivables, cash and short-term deposits that arise directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks and also ensure that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes will be undertaken.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below :
i) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.This is based on the financial assets and financial liabilities held as at 31st March, 2024 and 31st March, 2023. a) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest expenses to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total loan portfolio. The Company''s borrowings have been contracted at floating rates of interest. Accordingly,
ncirn/inn \/oli ia of ci mh hormu/innc \A/hirh cinnmYimcitoc foir \/oli ia ⢠¦ ¦ ¦
c) Equity price risk
Equity price risk is related to change in market reference price of investments in equity securities held by the Company.
The fair value of quoted investments held by the Company exposes the Company to equity price risks. In general, these investments are not held for trading purposes.
Equity price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to equity price at the end of the reporting period.
A 5% change in equity prices of such securities held as at 31 March 2024 and 31 March 2023, would result in an impact of '' 18,060 lakhs and '' 8,541 Lakhs respectively on equity before considering tax impact.
ii) Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits and other financial instruments.
Trade receivables for which loss allowance is measure using life time expected credit losses (ECL)
Customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. The Company continuously monitors the economic environment in which it operates. The Company manages its Credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each quarter end on an individual basis for major customers.
43. Subsequent events
No adjusting or significant non- adjusting events have occurred between the reporting date and date of authorization of these financial statements.
44. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13th November, 2020, and has invited suggestions from stakeholders, which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
45. Vendor''s / Customer''s reconciliations
The Company is obtaining confirmations and reconciliation with its trade receivables, trade payables and other dues receivables regularly. The confirmations to the extent received have been reconciled and adjustments, if any, have been made. The others are pending for confirmations, reconciliations and adjustments, if any. However, the management does not expect any significant variations in the existing status and material financial impact.
46. GST reconciliations
The Company is in the process of reconciliation of Input Tax Credit as per Books and GST Portal. The reconciliation to the extent done have been accounted for in the books of accounts. The management does not expect any material financial impact.
48. Other Statutory information
i) The Company does not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.
ii) The Company does not have any transactions with companies struck off.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961(such as, search or survey or any other relevant provision of the Income Tax Act, 1961)
vi) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).
vii) The Company has not been declared willful defaulter by any bank or any other financial institution at any time during the financial year.
viii) All immovable properties are held in the name of the Company.
49. Previous year''s figures have been regrouped / re-classified wherever necessary to make them more comparable.
As per our report of even date as attached For and on behalf of Board of Directors of Sunflag Iron and Steel Company Limited
For NSBP & CO. PRANAV BHARDWAJ S. MAHADEVAN CA VINITA BAHRI
Chartered Accountants MANAGING DIRECTOR CHIEF FINANCIAL OFFICER DIRECTOR
FRN: 001075N DIN 00054805 DIN 03109454
SUBODH KUMAR MODI RAMCHANDRA DALVI ASHUTOSH MISHRA CA M. A. V. GOUTHAM
Partner DIRECTOR (TECHNICAL) HEAD COMPANY SECRETARY DIRECTOR
M No 093684 DIN 00012065 M. No. ACS 23011 DIN 00101447
New Delhi Nagpur D/REcNoRH JHA
24th May, 2024 24th May, 2024 DIN 07593002
Mar 31, 2023
i) Addition to capital work in progress include ? 689 Lakhs finance cost capitalised during the year. (Previous Year ^ 1075 Lakhs).
ii) Cost of Leasehold land is amortised over the period i.e. 95 years.
iii) a) The Company had adopted the revaluation model as per IND AS-16 for plant & machinery and building, as at 31st March, 2020, and accordingly the carrying cost and useful
life of these assets have been revalued through an independent valuer. Due to revaluation, the Company has charged incremental depreciaton for the year ended 31st March, 2023 amounting to^ 1,818 Lakhs (Previous Year ? 1,770 Lakhs).
b) The Company has revalued its plant and machinery and building at the end of the year 31st March, 2023. As a result, the revaluation gain of ^6681 Lakhs (Plant & Machinery ^2,947 Lakhs and Buildings^ 3,734 Lakhs) has been accounted for in the current financial year ended 31st March, 2023 through other comprehensive income. (Previous revaluation was carried out as on 31st March, 2020).
Additional information Assets under construction
Capital work in progress incurred as at 31st March, 2023 amounted ''17004 Lakhs (Previous Year ''35027 lakhs) in view of implementation of new projects.
Impairment review
Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit (âCGUâ) or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating unitsâ value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid-term market conditions.
Note 1) Delay in execution of projects are mainly due to suspension of activities during COVID-19 period. However, there are no cost over run.
2) The projects temporarily suspended are related to Bande Iron Ore, Kodolibad Iron Ore, Warpani Manganese and Navegoan mines developments. Bande Iron Ore, Warpani Manganese and Navegoan mines development is subjudice, due to change in central government ruling Bande iron ore mines, Warpani Mine and Navegoan Mines got cancelled for which the company has filed legal case in Nagpur Bench of Bombay High Court.
Note 1) Delay in execution of projects are mainly due to suspension of activities during COVID-19 period. However, there are no cost over run.
2) The projects temporarily suspended are related to Bande Iron Ore, Kodolibad Iron Ore, Warpani Manganese and Navegoan mines developments. Bande Iron Ore, Warpani Manganese and Navegoan mines development is subjudice, due to change in central government ruling Bande iron ore mines, Warpani Mine and Navegoan Mines got cancelled for which the company has filed legal case in Nagpur Bench of Bombay High Court.
a) Terms/ Voting Rights attached to the Equity Shares (''in Lakh)
(i) The Company has one class of equity shares having a face value of ''10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, if any is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.
(ii) 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 of the number of the Equity shares held by the Shareholders.
i. a) Term Loans from Banks/NBFCs are Secured by a first mortgage of the Company''s Immovable properties situated at Village Warthi, District Bhandara, both present and future ranking pari passu interse and a first charge by way of hypothecation of all the company''s movables subject to prior charges created in favour of Company''s bankers on Inventories, book debts and other movables for securing the borrowings for working capital requirement.
b) Term Loans Rs.5500 Lakhs sanctioned by Bajaj Finance Ltd. is secured by a first mortgage of the Company''s Immovable properties situated at KG Marg, New Delhi.
c) The funds availed from the Bank have been utilized only for the purpose(s) as stated in the Sanction Letter and are not used for any investments and other purposes.
i. Working capital borrowings are secured by way of hypothecation of Inventories and book debts and further secured by way of second charge ranking pari passu over the fixed assets situated at Village Warthi, District Bhandara both present and future, subject to prior charges created by the Company in favour of banks for securing term loan.
ii. Interest on working capital loan from Banks are charged between 7.35% to 9.60% by respective bank.
iii. Outstanding under Customer bills discounted are supported by Letter of credit issued by the respective customers. Further the bills are discounted after receipt of acceptance from applicant''s Bank.
iv. The quarterly returns or statements filed by the Company for working capital limits with such banks and financial institutions are generally in agreement with the books of account of the Company, however whenever the differences were noted between the amount as per books of accounts for respective quarters and amount as reported in the quarterly statements are given below. Reasons for the deviations are on account of INDAS adjustements, non-tradecreditors, goods intransit, methodology used by banks for consideration of drawing power or stock statements submitted with the banks on provisional basis etc. However, limit utilized was much lower than the limit sanctioned, hence the differences are not material.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. Moreover the Company is in the process of updating its suppliers data, as to the status as a Micro, Small & Medium Enterprise with a copy of the Memorandum filed as per the provisions of Section 8 of the Micro, Small & Medium Enterprises Development Act, 2006.
For the purpose of the Company''s capital management, equity includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less current investments and cash and cash equivalents. The primary objective of the Company''s capital management is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Company''s capital management amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
To maintain or adjust the capital structure, the Company review the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.
No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2023 and 31st March, 2022.
38. The Company has received an Arbitration award vide order dated 22nd April, 2022 read with additional / supplementary award dated 28th April, 2022 pertaining to Company''s past period claims on Lloyds Metal & Energy Ltd (LMEL), which has been settled through Arbitral tribunal vide award dated 22nd April, 2022 read with additional / supplementary award dated 28nd April, 2022. Consequently, LMEL issued Optionally Fully Convertible Debentures (OFCD) with an option to convert into equity shares. The company exercised its option and converted the OFCD into 600 Lakhs equity shares.(refer note No.4).
a) The investment details of Gratuity funds are as per the Scheme of Life Insurance Corporation of India (LIC).
b) The investment details of Superannuation funds are as per the Scheme of Life Insurance Corporation of India (LIC) under two plans. Even though these plans are still continuing, Company has stopped making contribution towards One plan i.e. Superannuation Scheme of Workers w.e.f 01.04.1995 on payment of bonus in the year 1995 as per the terms and conditions of Rules framed at the time of subscribing to the designated policy of LIC. Company was liable as per terms and conditions of the Trust deed to pay contributions only till applicability of provisions of Payment of Bonus Act.
The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties in an orderly market transaction, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values.
The fair values of derivatives are on MTM as per Bank
Company has opted to fair value its Long term and Current investments through profit & loss
Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level-1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
43. Financial Risk Management Financial risk factors
The Companyâs principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, and financial guarantee contracts.The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Company has loan, Investment, trade receivables, other receivables, cash and short-term deposits that arise directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks and also ensure that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes will be undertaken.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below :
i) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.This is based on the financial assets and financial liabilities held as at 31st March, 2023 and 31st March, 2022.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest expenses to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total loan portfolio. The company''s borrowings have been contracted at floating rates of interest. Accordingly, carrying value of such borrowings (including interest accrued but not due) which approximates fair value.
Interest rate sensitivity
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits and other financial instruments.
Customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. The Company continuously monitors the economic environment in which it operates. The Company manages its Credit risk through credit approvals, establishing credit limits and continuously monitoring credit worthiness of customers to which the Company grants credit terms in the normal course of business. An impairment analysis is performed at each reporting date on an individual basis for major clients.An impairment analysis is performed at each quarter end on an individual basis for major customers.
The Company monitors its risk of a shortage of funds using a liquidity planning tool. The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and cash credit facilities.
No adjusting or significant non- adjusting events have occurred between the reporting date and date of authorization of these financial statements, except the event referred to in note No.38
47. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13th November, 2020, and has invited suggestions from stakeholders, which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
49. Other Statutory information
i) The Company does not have any benami property, and no proceeding has been initiated against the Company for holding any benami property.
ii) The Company does not have any transactions with companies struck off.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961(such as, search or survey or any other relevant provision of the Income Tax Act, 1961)
vi) The Company has not been declared willful defaulter by any banks or any other financial institution at any time during the financial year.
vii) All immovable properties are held in the name of the Company.
50. Previous year''s figures have been regrouped / re-classified wherever necessary to make them more comparable.
Mar 31, 2018
Notes forming part of the Financial Statements for the yearended 31st March, 2018
1. Corporate information
Sunflag Iron and Steel Company Limited (the âCompanyâ) was incorporated in 1984 and is engaged in the business of manufacturing and sale of Special Steel Rolled products. The Company is listed on BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE).
The registered office of the Company is situated at 33, Mount Road, Sadar, Nagpur-440001, Maharashtra, India.
These financial statements are presented in Indian Rupees (Rs.)
Notes:
I) Addition to capital work in progress include Rs. Nil of the finance cost capitalised during the year (Previous year Rs. Nil),
ii) Cost of Leasehold land is amortised over the period of lease i.e. 95 years.
in) The Company has elected to measure the items of Property, plant and equipment at their cost on the date of transition.
Additional information Asset under construction
Capital work in progress incurred as at 31st March, 2018 amounted Rs. 10,759 lakhs (Previous year, Rs. 4,625 lakhs) in view of implementation of new projects viz.
I) New sinter plant ii) Induction Furnace iii) Continuous Finishing Line
iv) Ingot Caster v) Transit House at Bhandara
All creditors towards CWIP has been classified under other financial liabilities and it also includes project inventory as at the year end. Impairment review
Assets are tested for impairment whenever there are any internal or external indicators of impairment. Impairment test is performed at the level of each Cash Generating Unit (âCGUâ) or groups of CGUs within the Company at which the assets are monitored for internal management purposes, within an operating segment. The impairment assessment is based on higher of value in use and value from sale calculations. During the year, the testing did not result in any impairment in the carrying amount of other assets. The measurement of the cash generating unitsâvalue in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptionsforshort to mid-term market conditions.
Key assumptions used in value-in-use calculations:- Operating margins (Earnings before interest and taxes); Discount rate; Growth rates; Capital expenditures.
Pursuant to the Supreme Court Order dated 24th September, 2014, the Coal Block allocated to the Company with other Shareholders/Joint Venture partners in the names of Khappa Coal Company Private Limited Madanpur (North) Coal Co. Private Limited and CT Mining Private Limited, stands cancelled. Subsequent to the cancellation of previous allocation, the Government of India, Ministry of Law and Justice (Legislative Department) has promulgated. The Coal Mines (Special Provisions) Act, 2015 for implementing the order of Supreme Court and fixation of compensation etc to the prior allottees. But the process of re-allotment and crystallization of compensation amount in respect of the below Companyâs mines, is pending, as the re-auctioning process of these mines are not yet completed. In view of belowsaid, the Company has not recognized any amount towards diminution in the value of the investments made in the Subsidiaries and Joint Venture companies.
a) Terms/Voting Rights attached to the Equity Shares
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 of the number of the Equity shares held by the Shareholders.
As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
d) The company has neither issued any bonus share or share for consideration other than cash neither bought back any shares during the period of five years immediately preceeding the reporting date.
I. Term Loans from Banks are Secured by a first mortgage of the Companyâs Immovable properties situated at Village Warthi, District Bhandara, both present and future ranking pari passu interse and a first charge by way of hypothecation of all the companyâs movables subject to prior charges created in favour of Companyâs bankers on inventories, book debts and other movables for securing the borrowings for working capital requirement.
ii. Term loan of Rs. 7,500 lakhs (outstanding Rs. 6,963 lakhs) borrowed from State Bank of India is further secured by Personal Guarantee of Shri Ravi Bhushan Bhardwaj, Chairman of the Company.
iii. The Company has not defaulted in repayment of principle and interest during the year.
iv. The Unsecured loans comprising term loans given by Promoters are interest free. There is no stipulation as to the repayment hence there is no default has occurred in repayment during the period.
v. The Unsecured loans comprising Interest free Sales Tax Loan valued on NPV basis. Actual liability isRs. 3,254 lakhs. The repayment of the sales tax loan is made as per the schedule and no default has occurred in repayment during the period.
i. Working capital borrowings are secured by way of hypothecation of Inventories and book debts and further secured byway of second charge ranking pari passu over the fixed assets situated at Village Warthi, District Bhandara both present and future, subject to prior charges created by the Company in favour of banks for securing term loan. Working capital borrowings are secured by the personal guarantee of Shri Ravi Bhushan Bhardwaj, Chairman of the Company.
ii. Intreset on working capital loan from Banks are charged at respective bankâs MCLR plus 50 -100 bps
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. Moreover the Company is in the process of updating its suppliers data, as to the status as a Micro Small & Medium Enterprise with a copy of the Memorandum filed as per the provisions of Section 8 of the Micro, Small & Medium Enterprises Development Act, 2006.
2. Disclosure under Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015
Details of loans and advances in nature of loans to subsidiaries, parties in which Directors are interested and investments by the loanee in the shares of the Company as required by clause 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015:
3.Segment information
The Company has only one operating segment i.e. âIron & Steel Businessâ and operations are mainly within India. Hence, it is the only reportable segment under Ind AS-108 âOperating Segmentsâ.
Entity wise disclosure required by Ind AS-108 are made as follows:
4. Operating Lease
Operating lease commitments - Company as lessee
The Company has entered into cancellable lease agreements for godowns and office premises. Some of the lease agreements contain escalation clause ofupto 10% There are no restrictions placed upon the Company by entering into these leases.
5. Capital management
For the purpose of the Companyâs capital management, equity includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders and net debt includes interest bearing loans and borrowings less current investments and cash and cash equivalents. The primary objective of the Companyâs capital management is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial convenants. The funding requirement is met through a mixture of equity, internal accruals, long term borrowings and short term borrowings. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.
In order to achieve this overall objective, the Companyâs capital management amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
To maintain or adjust the capital structure, the Company review the fund management at regular intervals and take necessary actions to maintain the requisite capital structure.
No changes were made in the objectives policies or processes for managing capital during the years ended 31st March 2018, 31stMarch 2017.
6. Subsequent events: There are no reportable events
The Company have received an intimation from the Nominated Authority, Ministry of Coal, Government of India, for appropriation of Performance Bank guarantee to the extent of Rs. 21.38 Crores in view of non-compliance of production schedule in terms Coal Mine Development and Production Agreement in respect of Belgaon Coal Mine. However, the Company filed a writ petition in the Honâble High Court at Delhi and after hearing the matter on 3rd May, 2018, the Honâble High Court directed the Company to file an appeal in the Special Tribunal at Nagpur within two weeks. Accordingly the Company filed an appeal on 8th May, 2018 and the matter is yet to be heard. However, as a matter of prudence, necessary provision has been made as at the Balance sheet date 31 stMarch, 2018.
7. Employee benefit plans
Employee Provident Fund, the Company has made good the shortfall of interest on fund Nil. (Previous Year Nil).
a) The investment details of Gratuity funds are as per the Scheme of Life Insurance Corporation of India (LIC).
b) The investment details of Superannuation funds are as per the Scheme of Life Insurance Corporation of India (LIC) under two plans. Even though these plans are still continuing, Company has stopped making contribution towards One plan i.e. Superannuation Scheme of Workers w.e.f. 01.04.1995 on payment of bonus in the year 1995 as per the terms and conditions of Rules framed at the time of subscribing to the designated policy of LIC. Company was liable as per terms and conditions of the Trust deed to pay contributions only till applicability of provisions of payment of Bonus Act.
8. Related Party Disclosure (as Identified by the Management)
In accordance with the requirements of Ind AS-24, on related party disclosures name of the related party, related party relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during reporting periods.
The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties in an orderly market transaction, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values.
i) The fair values of derivatives are on MTM as per Bank
ii) Company has opted to fairvalue its Long term and Current investments through profit & loss
iii) Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.
Fairvalue hierarchy
Level 1 - Quoted prices (unadjusted) inactive markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level-1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs forthe assets or liabilities that are not based on observable market data (unobservable inputs).
9.Financial Risk Management
Financial riskfactors
The Companyâs principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Company has loan, investment, trade receivables, other receivables, cash and short-term deposits that arise directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks and also ensure that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. It is the Companyâs policy that no trading in derivatives for speculative purposes will be undertaken.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
i) Market Risk
Market risk is the risk that the fairvalue or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk currency rate risk interest rate risk and other price risks, such as equity price risk and commodity risk. Foreign currency risk is the risk that the fairvalue or future cashflows of a financial instrument will fluctuate because of changes in foreign exchange rates Interest. Interest rate risk is the risk that the fairvalue or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at 31st March,2018and31st March,2017.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Companyâs position with regards to interest expenses to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total loan portfolio.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the unhedged portion of loans and borrowings. With all other variables held constant the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates related primarily to the Companyâs operating and financing activities.
ii) Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and advances to suppliers) and from its financing activities, including deposits and otherfinancial instruments.
Trade receivables
Customer credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on an individual basis for major clients. An impairment analysis is performed at each quarter end on an individual basis for major customers.
iii) Liquidity Risk
The Company monitors its risk of a shortage of funds using a liquidity planning tool. The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and cash credit facilities.
The table below summarises the maturity profile of the Companyâs financial liabilities based on contracted undiscounted payments.
10. Information related to Consolidated Financial
The company is listed on stock exchange in India, the Company has prepared consolidated financial as required under IND AS 110, Sections 129 of CompaniesAct, 2013 and listing requirements. The consolidated financial statement is available on companyâs website forpublicuse.
11. The Company has spent amount on corporate social responsibility expenses as below:
12. The Board of Directors have recommended for declaration of dividend at the Rate of 5% on equity shares (face value Rs. 10/- each) amounting to Rs. 1,095 Lakhs inclusive of Dividend Distribution Tax at their meeting held on 28th May, 2018 and to be approved at the Annual General Meeting.
13. Previous yearâs figures have been regrouped / re-classified wherever necessary to make them more comparable.
Mar 31, 2017
1. Segment information
The Company has only one operating segment i.e. âIron & Steel Businessâ and operations are mainly within India. Hence, it is the only reportable segment under IND AS 108 âOperating Segmentsâ.
Since there is no fresh issue or Bonus issue and also the absence of any other type of Share Capital Outstanding at the end of the Year the Diluted EPS and Basic EPS are same.
2. Disclosure of Employee Benefit
In view of the mandatory applicability of the revised Accounting Standard on Employs Benefits (AS 15 Revised) to the Company, effective 1st January, 2007 the additional charges are paid and charged to the statement of Profit and Loss according to the provisions of AS-15 (revised) as under :
i) Employee Provident Fund, the Company has made good the shortfall of interest on fund Rs, NIL (Previous Year Rs, 39 Lakhs)
a) The investment details of Gratuity funds are as per the Scheme of Life Insurance Corporation of India (LIC).
b) The investment details of Superannuation funds are as per the Scheme of Life Insurance Corporation of India (LIC) under two plans. Eventhough these plans are still continuing, Company has stopped making contribution towards One plan i.e. Superannuation Scheme of Workers w.e.f. 01.04.1995 on payment of bonus in the year 1995 as per the terms and conditions of Rules framed at the time of subscribing to the designated policy of LIC. Company was liable as per terms and conditions of the Trust deed to pay contributions only till applicability of provisions of payment of Bonus Act.
The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties in an orderly market transaction, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values.
i) The fair values of derivatives are on MTM as per Bank
ii) Company has opted to fair value its Long term and Current investments through profit & loss
iii) Company has adopted effective rate of interest for calculating Interest. This has been calculated as the weighted average of effective interest rates calculated for each loan. In addition processing fees and transaction cost relating to each loan has also been considered for calculating effective interest rate.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
3.B Information related to Consolidated Financial
The company is listed on stock exchange in India, the Company has prepared consolidated financial as required under IND AS 110, Sections 129 of Companies Act, 2013 and listing requirements. The consolidated financial statement is available on companyâs web site for public use.
4. C Events occurring after the Balance Sheet Date
No adjusting or significant non adjusting events have occurred between the reporting date and date of authorization of financial statements
5. The Company do not have any unheeded foreign currency exposure as at the year end.
6. Subsequent events : There are no reportable events
7. Financial statements for the year ended March 31, 2016 were audited by M/s. Patel, Shah & Joshi, Chartered Accountants, Mumbai.
8. Previous yearâs figures have been regrouped / re-classified wherever necessary to make them more comparable.
*The Companyâs manufacturing activity at Bhandara has been granted the status of âMega Projectâ by the Government of Maharastra and therefore is eligible for Industrial Promotion Subsidy (IPS) under Packaged Scheme of Incentive (PSI) 2007. The purpose of the scheme is for intensifying and accelerating the process of dispersal of industries to the less developed regions and promoting high tech industries in the developed areas of the state occupied with the object of generating mass employment opportunities. Entitlements under the scheme consists of the following :-(a) Electricity duty exemption for a period of 7 years from the date of commencement of commercial production from September 10, 2009 to September 9, 2015 (b) 100% exemption from payment of stamp duty (c) VAT and CST payable to the State Government (on sales made from Bhandara plant within a period of 7 years starting from September 10, 2009) IPS will be payable so as to restrict up to 75% of the eligible fixed capital investments made from September 13, 2007 to September 10, 2009. The eligible certificate issued allows maximum fixed capital investment of Rs, 35000 lakhs and restricts IPS to 75% of Rs, 35000 lakhs i.e. Rs, 26.250 lakhs
Note : All the Joint - Ventures mentioned above, except Daido D.M.S. India Pvt. Ltd., have yet to commence the business / operations
Mar 31, 2016
Note : Figures in brackets relate to the previous year.
1. Previous year figures have been rearranged or regrouped wherever necessary to conform to current year''s classification. The line items which are either not applicable or were NIL for both the years are omitted in presentation.
Membership in other Companies denotes other than Foreign Companies.
None of the Non-executive Directors have any material pecuniary relationship or transactions with the Company other than receiving Sitting Fees for the Board and its Committee Meetings and profit based Commission.
The Company ensures that all statutory, significant material information are placed before the Board or Committees of Directors for their noting, consideration, review and approval, if any, to enable them to discharge their responsibilities as trustees of the large family of stakeholders. During the financial year, all the information on matters mentioned in terms of Clause 49 of the Listing Agreement (till 30th November 2015) and Regulation 17(3), Regulation 27 Schedule - II Part - E of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (effective 1st December 2015) has been placed before the Board for their considerations and approval, if any. The Board periodically reviews compliance of all laws applicable to the Company.
Scheduling and selection of Agenda items for the Board Meetings :
All departments of the Company schedule their work and plans in advance, particularly with regard to matters requiring consideration at the Board or its Committee Meetings.
Post meeting follow-up mechanism
All important decisions taken at the Board or its Committee Meetings are promptly communicated to the concerned departments. Action Taken Report on decisions and minutes of previous meetings are placed at the succeeding meetings of the Board and its Committee for noting, ratification and approval, if any.
Code of Conduct for the Board of Directors and Senior Management :
The Code of Conduct has already been communicated to all the Board members and members of the senior management. The Code is also available on the Companyâs website www.sunflagsteel.com. All the Board members and senior management personnel have confirmed compliance with the Code for the financial year ended 31st March, 2016. The Annual Report contains a declaration to this effect signed by Deputy Managing Director and Chairman, Audit Committee of the Company.
c) Woman Director :
As per the provisions of the Companies Act, 2013 read with the Clause 49 of the Listing Agreement (erstwhile), Mrs. Neelam Kothari (DIN : 06709241), a qualified Chartered Accountant and Cost Accountant from Mumbai, appointed and continued to be on the Board of the Company effective 29th September, 2014.
Mar 31, 2015
1. Corporate information
Sunflag Iron and Steel Company Limited was incorporated in 1984 and
engaged in the business of manufacturing and sale of Special Steel
Rolled products.
a) Terms / Voting Rights attached to the Equity Shares
The paid up capital of the Company consists of only equity shares of Rs.
10/- each. Every equity shareholder is entitled to one vote per share.
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 of the number of the Equity shares held by the
Shareholders.
ii) Pursuant to resolution passed in Extra-ordinary Gerneral Meeting
held on 5th August 2014, 10% Cummulative preference shares, have been
reclassified into equity shares. Accordingly the Equity Share capital
now stands at 2,050 Lacs shares of Rs. 10/- each.
iii) During the year the company issued 18,021,945 equity shares of
Rs.10/- each fully paid at a premium to non-promoter investor by way
preferencial allotment.
i) Term Loans from Banks are secured by a first mortgage of all the
Company's immovable properties, situated at village Warthi, District
Bhandara, both present and future ranking pari passu interse and a
first charge by way of hypothecation of all the Company's movables
subject to prior charges created in favour of Company's bankers on
inventories, book debts and other movables for securing the borrowings
for working capital requirement.
ii) Term loan of Rs. 40 Crores (outstanding Rs. 25 Crores) borrowed from
State Bank of India and State Bank of Bikaner & Jaipur are further
secured by Personal Guarantee of Shri Ravi Bhushan Bhardwaj, Vice
Chairman & Managing Director.
iii) The Company has not defaulted in either repayment of principle or
interest during the year.
@ The Unsecured loans comprising interest free loans given by
Promotors. There is no stipulation as to the repayment hence there is
no default in repayment during the period.
i) Working Capital Borrowings are secured by way of hypothecation of
inventories and book debts and further secured by way of second charge
ranking pari passu over the fixed assets situated at village Warthi,
Dist. Bhadara, both present and future, subject to prior charges
created by the Company in favour of banks for securing term loans.
Working capital borrowings are further secured by the personal
guarantee of Shri Ravi Bhushan Bhardwaj, Vice Chairman & Managing
Director of the Company.
ii) The Company has not defaulted in either repayment of principle or
interest during the year.
Pursuant to the Supreme Court Order dated 24th September, 2014, the
Coal Block allocated to the company with other JV partners in the names
of Khappa Coal Company Private Limited, Madanpur (North) Coal Company
Private Limited, and CT Mining Private Limited, stands cancelled.
Subsequent to the cancellation of previous allocation, the Government
of India, Ministry of Law and Justice (Legislative Department) has
promulgated "The Coal Mines (Special Provisions) Act, 2015" for
implementing the order of Supreme Court and fixation of compensation
etc to the prior allottees. But the process of re-allotment and
crystallization of compensation amount in respect of the Company's
mine, is pending at Nominated Authority, Ministry of Coal, Goverment of
India. In view of aforesaid, the Company has not recognized any amount
towards diminution in the value of the investments made in the JV
companies.
For the year ended
31.03.2015 31.03.2014
(Rs. in Lacs)
2.1 Contingent liabilities and commitments
(to the extent not provided for)
i) Contingent liabilities
a) Unexpired Letter of Credit 4,549 6,102
b) Guarantees issued by Company's Bankers
on behalf of the Company 8,204 3,275
c) Bonds / Undertakings given by the Company
under Duty Exemption 2,598 2,598
Scheme to the Custom Authorities
d) Bills Discounted 6,935 7,170
e) Excise Duty & Custom Duty against which
Company has preferred 65 65
an Appeal
f) Income Tax Liability - Disputed but paid 1,325 1,538
g) Corporate Guarantee issued to Banks on
behalf of Subsidiaries 400 400
ii) Commitments
Estimated amount of contracts remaining to
be executed on capital account and
not provided for :
_ Tangible Assets 497 882
2.2 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
Based on the data available with the Company, there were no dues to
Micro, Small and Medium Enterprises as on 31st March 2015 due for a
period of more than 45 days, accordingly, no interest was paid / is
payable in terms of the said Act during the year under review.
2.3 Segment information
The Company's business activity primarily falls within a single
business segment i.e., Iron & Steel business, however, the Company also
generate power from its Captive Plant, which is entirely consumed in
Iron & Steel Manufacturing Unit and no sale to third party has been
made. The details of such consumed units are shown below. Hence there
are no additional disclosures to be made under Accounting Standard (AS)
17, other than those already provided in the financial statements.
2.4 Employee benefit plans
In view of the mandatory applicability of the revised Accounting
Standard on Employee Benefits (AS 15 Revised) to the Company, effective
1st January 2007, the additional charges are paid and charged to the
statement of Profit & Loss according to the provisions of AS-15
(Revised) as under :
- Employees Provident Fund, the company has made good the shortfall
of interest on fund Rs.Nil' (previous year Rs. 9.00 Lacs)
a) The investment details of Gratuity funds are as per the Scheme of
Life Insurance Corporation of India (LIC).
b) The investment details of Superannuation funds are as per the Scheme
of Life Insurance Corporation of India (LIC) under two plans.
Eventhough these plans are still continuing, Company has stopped making
contribution towards One plan i.e., Superannuation Scheme of Workers
w.e.f. 01.04.1995 on payment of bonus in the year 1995 as per the terms
and conditions of Rules framed at the time of subscribing to the
designated policy of LIC. Company was liable as per terms and
conditions of the Trust deed to pay contributions only till
applicability of provisions of payment of Bonus Act.
3. Previous year figures have been rearranged or regrouped wherever
necessary to conform to current year's classification. The line items
which are either not applicable or were NIL for both the years are
omitted in presentation.
Mar 31, 2014
1. Corporate information
Sunflag Iron and Steel Company Limited was incorporated in 1984 and
engaged in the business of manufacturing and sale of Special Steel
Rolled products.
2. Contingent liabilities and commitments (to the extent not provided
for)
(Rs.in Lacs)
For the year Ended
Particulars 31.03.2014 31.03.2013
i. Contingent liabilities
a) Unexpired Letter of Credit 6,102 10,801
b) Guarantees issued by Company''s
Bankers on behalf of the Company 3,275 2,692
c) Bonds / Undertakings given by
the Company under Duty
Exemption Scheme 2,598 2,598
to the Custom Authorities
d) Bills Discounted 7,170 6,400
e) Excise Duty & Custom Duty against
which Company has preferred
an Appeal 65 100
f) Income Tax Liability -
Disputed but paid 1,538 1,074
g) Income Tax Liability -
Disputed but not paid - 739
h) Corporate Guarantee issued to
Banks on behalf of Subsidiaries 400 400
2.1 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
Based on the data available with the Company, there were no dues to
Micro, Small and Medium Enterprises as on 31st March 2014 due for a
period of more than 45 days, accordingly, no interest was paid /is
payable in terms of the said Act during the year under review.
2.2 Disclosure as per Clause 32 of the Listing Agreements with the
Stock Exchanges
Loans and advances in the nature of loans given to subsidiaries,
associates and others and investment in shares of the Company by such
Companies.
2.3 Segment information
The Company''s business activity primarily falls within a single
business segment i.e., Iron & Steel business, however, the Company also
generate power from its Captive Plant, which is entirely consumed in
Iron & Steel Manufacturing Unit and no sale to third party has been
made. The details of such consumed units are shown below. Hence there
are no additional disclosures to be made under Accounting Standard (AS)
17, other than those already provided in the financial statements.
2.4 Employee benefit plans
In view of the mandatory applicability of the revised Accounting
Standard on Employee Benefits (AS 15 Revised) to the Company, effective
1st January 2007, the additional charges are paid and charged to the
statement of Profit & Loss according to the provisions of AS-15
(Revised) as under :
- Employees Provident Fund, the company has made good the shortfall of
interest on fund Rs. 9.00 lacs (previous yearRs. Nil)
3. During the year, the Company has received letters from Ministry of
Coal, Government of India for de-allocation of coal blocks allotted to
the Company along with other Joint Venture partners as below :
i) Khappa & Khappa Extension coal block in the state of Maharashtra.
The Company has filed a writ petition with Nagpur Bench of Bombay
High Court, praying for setting aside the said de-allocation. On
such petition the Bombay High Court has passed interim orders
restraining the Central Government from taking coercive steps till
further orders.
ii) Choritand Taliya coking coal block in the state of Jharkhand. The
Company appealed to High Court of Jharkhand at Ranchi, and received an
interim order, directing the Minstry of Coal, Government of India,
not to take any coercive steps against the Company till further order.
iii) Madanpur (North) Coal Block in the State of Chhattisgarh,
allocated to the Company with seven other allocatees. The allocatees
have incorporated a JVC viz. Madanpur (North) Coal Company Private
Limited. The JVC has filed a petition in the Delhi High Court against
the de-allocation of the Coal Block. The Honorable Delhi High Court
issued an interim order directing the Ministry of Coal, Government of
India to maintain status-quo till further order by the court.
Since the matter is now sub-judice before the respective Hon''ble High
Courts, the Company has neither provided for any contingencies nor
recognised any amount towards diminution in the value of the
investments made in the Subsidiary / JVCs and accordingly, the
financial statements have been prepared on going concern basis.
5. Previous years figures have been rearranged or regrouped wherever
necessary to conform to current year''s classification. The line items
which are either not applicable or were NIL for both the years are
omitted in presentation.
Mar 31, 2013
1. Corporate information
Sunflag Iron and Steel Company Limited was incorporated in 1984 and
engaged in the business of manufacturing and sale of Special Steel
Rolled products.
2.1 Contingent liabilities and commitments (to the extent not provided
for)
(Rs.in Lacs)
For the year Ended
Particulars 31.03.2013 31.03.2012
i. Contingent liabilities
a) Unexpired Letter of Credit 10,801 6,740
b) Guarantees issued by Company''s
Bankers on behalf of the Company 2,692 2,666
c) Bonds / Undertakings given by
the Company under Duty Exemption
Scheme 2,598 2,782
to the Custom Authorities
d) Bills Discounted 6,400 3,367
e) Excise Duty & Custom Duty
against which Company has
preferred an Appeal 100 100
f) Income Tax Liability -
Disputed but paid 1,074 1,324
g) Income Tax Liability -
Disputed but not paid 739 -
h) Corporate Guarantee issued
to Banks on behalf of Subsidiaries 400 400
ii. Commitments
Estimated amount of contracts
remaining to be executed on capital
account 507 3,765
and not provided for :-
Tangible Assets
2.2 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
Based on the data available with the Company, there were no dues to
Micro, Small and Medium Enterprises as on 31st March 2013 due for a
period of more than 45 days, accordingly, no interest was paid /is
payable in terms of the said Act during the year under review.
2.3 Segment information
The Company''s business activity primarily falls within a single
business segment i.e., Iron & Steel business, however, the Company also
generate power from its Captive Plant, which is entirely consumed in
Iron & Steel Manufacturing Unit and no sale to third party has been
made. The details of such consumed units are shown below. Hence there
are no additional disclosures to be made under Accounting Standard (AS)
17, other than those already provided in the financial statements.
3. Previous years figures have been rearranged or regrouped wherever
necessary to conform to current year''s classification. The amounts have
been reclassified as per Revised Schedule VI and line items which are
either not applicable or were NIL for both the years are omitted in
presentation.
Mar 31, 2012
1. Corporate information
Sunflag Iron and Steel Company Limited was incorporated in 1984 and
engaged in the business of manufacturing and sale of Special Steel
Rolled products.
2.1 Contingent liabilities and commitments (to the extent not provided
for)
(Rs. in Lacs)
For the year Ended
Particulars 31.03.2012 31.03.2011
i. Contingent liabilities
a) Unexpired Letter of Credit 6,740 5,034
b) Guarantees issued by Company's
Bankers on behalf of
the Company 2,666 1,800
c) Bonds / Under Takings given
by the Company under Duty
Exemption Scheme 2,782 3,408
to the Custom Authorities
d) Bills Discounted 3,367 2,935
e) Excise Duty & Custom Duty against
which Company has preferred
an Appeal 100 103
f) Sales Tax Liability against which
Company has preferred an Appeal - -
g) Income Tax Liability even though
paid against which Company has
preferred 1,324 364
an Appeal
h) Corporate Guarantee issued to
Banks on behalf of Subsidiaries 400 400
ii. Commitments
Estimated amount of contracts
remaining to be executed on
capital account 3,765 11,913
and not provided for :-
Tangible Assets
2.2 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
Based on the data available with the Company, there were no dues to
Micro, Small and Medium Enterprises as on 31st March 2012 due for a
period of more than 45 days, accordingly, no interest was paid / is
payable in terms of the said Act during the year under review.
2.3 Segment information
The Company's business activity primarily falls within a single
business segment i.e., Iron & Steel business, however, the Company also
generate power from its Captive Plant, which is entirely consumed in
Iron & Steel Manufacturing Unit and no sale to third party has been
made. The details of such consumed units are shown below. Hence there
are no additional disclosures to be made under Accounting Standard (AS)
17, other than those already provided in the financial statements.
2.4 Employee benefit plans
In view of the mandatory applicability of the revised Accounting
Standard on Employee Benefits (AS 15 Revised) to the Company, effective
1st January 2007 the additional charges are paid and charged to
statement of Profit and Loss according to the provisions of AS 15
(Revised) as under :
- Employee Provident Fund, the Company has made good the shortfall of
interest on fund Rs. Nil (Previous Year Rs. 0.51 lacs)
3. Previous years figures have been rearranged or regrouped wherever
necessary to conform to current year's classification. The amounts have
been reclassified as per Revised Schedule VI and line items which are
either not applicable or are NIL for both the years are omitted in
presentation.
Mar 31, 2011
1. Estimated amount of contracts remaining to be executed on Capital
Account and not provided for are Rs. 11,913 Lacs (Previous year Rs.
9,756 Lacs).
2. Contingent Liabilities not provided for:
Rs. in Lacs
Sr. Particulars As at As at
No. 31.03.2011 31.03.2010
i. Unexpired Letters of Credit 5,034 10,850
ii. Guarantees issued by Company's Bankers
on behalf of the Company 1,800 1,161
iii. Bonds / Undertakings given by the
Company under Duty Exemption 3,408 36
Scheme to Customs Authorities
iv. Bills Discounted 2,935 3,994
v. Excise Duty & Customs Duty against
which Company has preferred 103 400
an appeal
vi. Sales Tax liability against which
Company has preferred an appeal Nil 2,803
vii. Corporate Guarantee issued to Banks
on behalf of Subsidiaries 400 400
viii.Income Tax Liability even though
paid against which Company has 364 Nil
preferred an appeal
3. PAYMENTS DUE TO SMALL AND MEDIUM ENTERPRISES (SME)
The Company is in the process of compiling information from its
suppliers in respect of their registration under the Micro, Small and
Medium Enterprises Development Act, 2006. However, based on the
information available with the company, there were no dues to Micro,
Small and Medium Enterprises as on 31st March 2011 due for a period of
more than 45 days. Further, no interest during the year under review
was paid / is payable in terms of the said Act.
4. The Company has Rs. 71 Lacs (Previous year Rs. 75 Lacs) of Export
benefits under Scheme of DEPB in hand pending utilisation or sale.
5. RELATED PARTY DISCLOSURE : (as identified by the Management)
Related Party Relationship
Sunflag Power Limited
Sunflag Special Steels Limited Subsidiary Companies
Khappa Coal Company Private
Limited
Haryana Television Limited Associate Enterprise
Sunflag Limited, Channel Islands, Enterprise which have
UK significant influence
Mr. P. B. Bhardwaj
Mr. Ravi Bhardwaj
Mr. Pranav Bhardwaj Key Managerial Personnel (KMP)
Mr. Surendra Kumar Gupta
Ridge Farm Developers Private Relative to Key Managerial
Limited Personnel
Madanpur (North) Coal Company
Private Limited
C T Mining Private Limited Joint Venture Companies
Gujarat State Mining & Resources
Corporation Limited
6. SEGMENT INFORMATION
The Company's business activity primarily falls within a single
business segment i.e., Iron & Steel business, however, the Company also
generate power from its Captive Plant, which is entirely consumed in
Iron & Steel Manufacturing Unit and no sale to third party has been
made. The details of such consumed units are shown below. Hence there
are no additional disclosures to be made under Accounting Standard (AS)
17, other than those already provided in the financial statements.
7. DISCLOSURE OF EMPLOYEE BENEFIT AS PER ACCOUNTING STANDARD 15
(REVISED)
In view of the mandatory applicability of the revised Accounting
Standard on Employee Benefits (AS 15 Revised) to the Company effective
1st January 2007, the additional charges are paid and charged to Profit
and Loss Account according to the provisions of AS 15 (Revised) as
under :
- Employee Provident Fund, the Company has made good the shortfall of
interest on fund Rs. 51 Lacs (Previous year Rs. 6 Lacs)
a. The investment details of Gratuity funds are as per the Scheme of
Life Insurance Corporation of India (LIC).
b. The investment details of Superannuation funds are as per the
Scheme of Life Insurance Corporation of India (LIC) under two plans.
Even though these plans are still continuing, Company has stopped
making contribution towards One plan i.e., Superannuation Scheme of
Workers w.e.f. 01.04.1995 on payment of bonus in the year 1995 as per
the terms and conditions of Rules framed at the time of subscribing to
the designated policy of LIC. Company was liable as per terms and
conditions of the Trust deed to pay contributions only till
applicability of provisions of payment of Bonus Act.
8. Previous year's figures have been regrouped / re-classified
wherever necessary to make them more comparable.
Mar 31, 2010
1. Estimated amount of contracts remaining to be executed on Capital
Account and not provided for are Rs. 975,601,430 (Previous year Rs.
441,270,445).
2. Interest free deferred Sales Tax liability has been accounted for
at its actual value i.e. Rs. 1,307,478,592 (Previous year Rs.
1,201,211,258) (Refer point no. 12-Part A). Accordingly an additional
amount of Rs. 95,032,499 is charged to Profit and Loss Account.
3. The Company has revised the estimated useful life of Plant &
Machinery and related building (as stated in Point no. 2 - Part A of
Accounting Policy). The depreciation charged to the Profit and Loss
account based on the revised estimated useful life of these assets is
Rs. 3,788.35 Lacs. In view of this change an additional amount of Rs.
61,528,729 is charged to Profit and Loss Account.
4. Contingent Liabilities not provided for:
(Rs. In 000)
Sr. As at As at
Particulars
No. 31.03.2010 31.03.2009
i. Unexpired Letters of Credit 1,084,962 263,013
ii. Guarantees issued by Companys
Bankers on behalf of the Company 116,126 151,505
iii. Bonds/Undertakings given by the
Company under Duty Exemption 3,622 3,622
Scheme to Customs Authorities
iv. Bills Discounted 399,355 203,950
v. Excise Duty & Customs Duty
against which Company has preferred 39,963 38,134
perferred an appeal
vi. Sales Tax liability against which
Company has preferred an appeal 280,336 1,959
vii. Corporate Guarantee issued to
Banks on behalf of Subsidiaries 40,000 -
5. PAYMENTS DUE TO SMALL AND MEDIUM ENTERPRISES (SME)
The Company is in the process of compiling information from its
suppliers in respect of their registration under the Micro, Small and
Medium Enterprises Development Act, 2006. However, based on the
information available with the company, there were no dues to Micro,
Small and Medium Enterprises as on 31st March 2010 due for a period of
more than 45 days. Further, no interest during the year under review
was paid / is payable in terms of the said Act.
6. The Company has Rs. 7,548,103 (Previous year Rs. Nil) of Export
benefits under Scheme of DEPB in hand pending utilisation or sale.
7. DISCLOSURE OF EMPLOYEE BENEFIT AS PER ACCOUNTING STANDARD 15
(REVISED)
In view of the mandatory applicability of the revised Accounting
Standard on Employee Benefits (AS 15 Revised) to the Company effective
1st January 2007, the additional charges are paid and charged to Profit
and Loss Account according to the provisions of AS 15 (Revised) as
under :
- Employee Provident Fund, the Company has made good the shortfall of
interest on fund Rs. 644,034. (Previous year Rs. 791,574)
Significant Accounting Policies and Notes forming part of the Accounts
for the year ended 31st March 2010
a. The investment details of Gratuity funds are as per the Scheme of
Life Insurance Corporation of India (LIC).
b. The investment details of Superannuation funds are as per the
Scheme of Life Insurance Corporation of India (LIC) under two plans.
Even though these plans are still continuing, Company has stopped
making contribution towards One plan i.e., Superannuation Scheme of
Workers w.e.f. 01.04.1995 on payment of bonus in the year 1995 as per
the terms and conditions of Rules framed at the time of subscribing to
the designated policy of LIC. Company was liable as per terms and
conditions of the Trust deed to pay contributions only till
applicability of provisions of payment of Bonus Act.
8. SUBSIDIARY
Coal Block at Khappa in the State of Maharashtra has been allotted to
Joint Venture Company, viz. M/s. Khappa Coal Company Private Limited.
The Joint Venture partners are Sunflag Iron and Steel Company Limited
and Dalmia Cement (Bharat) Limited where Sunflag Iron and Steel Company
Limited is holding a share of 63.27%.
9. Pervious years figures have been regrouped / re-classified
wherever necessary to make them more comparable.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Sunflag Iron & Steel Company Ltd.
-
Sunflag Iron & Steel Company Ltd. Tools
- Bulk Deals
- Block Deals
-
Sunflag Iron & Steel Company Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Rights
- BSE Price History
- NSE Price History
-
Sunflag Iron & Steel Company Ltd. Key Financial Ratios
- Ratios
-
Sunflag Iron & Steel Company Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Sunflag Iron & Steel Company Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Sunflag Iron & Steel Company Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Sunflag Iron & Steel Company Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+