We have audited the attached Balance Sheet of STEEL AUTHORITY OF INDIA
LIMITED, as on 31st March 2012, the Statement of Profit & Loss Account
and the Cash Flow Statement of the company for the year ended on that
date annexed thereto, in which are incorporated the accounts of Plants,
Units, Branches and other Offices audited by the Branch Auditors in
accordance with the letter of appointment of Comptroller & Auditor
General of India. These financial statements are the responsibility of
the company''s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors'' Report) Order, 2003 as
amended by the Companies (Auditors'' Report) (Amendment) Order, 2004
(hereinafter referred to as the Order) issued by the Government of
India in terms of Section 227(4A) of the Companies Act, 1956, we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 & 5 of the said Order.
4. Since the matter regarding provision of pension under
superannuation benefits for non executives remains undecided and the
amount also not ascertained, we are therefore unable to express our
opinion on the same and the effect on the accounts, if any (Refer Note
5. Without qualifying our opinion, we draw attention to Note Numbers
32.1 & 32.11 of notes to financial statements.
6. Further to our comments in the Annexure referred to above, we
i). We have obtained all the information and explanations, which to
the best of our knowledge and belief, were necessary for the purpose of
ii). In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of the
books, and proper returns adequate for the purpose of our audit have
been received from the plants/ units/ branches/other units not visited
by us. The branch auditors'' reports have been forwarded to us and have
been appropriately dealt with.
iii). The Balance Sheet, the Statement of Profit & Loss Account and
the Cash Flow Statement dealt with by this report are in agreement with
the books of account and with the audited returns from the branches.
iv). In our opinion, the Balance Sheet, the Statement of Profit & Loss
Account and the Cash Flow Statement dealt with by this report comply
with the accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956.
v). In terms of Government of India, Department of Company Affairs
Notification No. GSR 829(E) dated 21st October, 2003, Government
companies are exempt from the applicability of provisions of Section
274(1)(g) of the Companies Act, 1956.
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts subject to our observation
given in point no.4 above and read with significant accounting policies
and notes on accounts appearing in Note 28-41, give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) in case of Balance Sheet, of the state of affairs of the Company as
on 31st March 2012;
ii) in case of Statement of Profit & Loss Account, of the Profit of the
Company for the year ended on that date; and
iii) in case of the Cash Flow Statement, of the cash flows for the year
ended on that date.
1. a) The Company has maintained proper records showing in most cases,
full particulars including quantitative details and situation of its
b) The fixed assets of the Company have been physically verified by the
management at reasonable intervals in a phased manner so as to
generally cover all the assets once in three years. As informed to us,
no material discrepancies have been noticed on such verification
wherever reconciliation has been carried out.
c) In our opinion and according to the information and explanations
given to us, there is no substantial disposal of fixed assets during
2. a) The inventories have been physically verified by the management
with reasonable frequency during the year. In certain cases, the stocks
have been verified on the basis of visual survey/estimates.
b) In our opinion and according to the information and explanations
given to us, the procedures for physical verification of inventories
followed by the management are generally reasonable and adequate in
relation to the size of the company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventory. The discrepancies between physical stocks and book records
arising out of physical verification, which were not material, have
been dealt with in the books of account.
3. According to information and explanations given to us, the Company
has not granted or taken any secured or unsecured loans, to or from
companies, firms, or other parties covered in the register maintained
under Section 301 of the Companies Act, 1956. Consequently, clauses
(iii) (a) to (iii)(g) of paragraph 4 are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major failures in the internal control system.
5. a) According to the information and explanations given to us, we
are of the opinion that there are no contract or arrangement of the
Company, referred to in section 301 of the Companies Act, 1956, which
requires to be entered in the register required to be maintained under
that section. b) According to the information and explanations given
to us, there are no transactions of purchase of goods and materials and
sale of goods, materials and services made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act 1956, exceeding the value of Rs.5,00,000 in respect
of any party.
6. The Company has not accepted any public deposits during the year.
In respect of public deposits accepted in earlier years, there are no
unmatured outstanding deposits.
7. In our opinion, the Company''s internal audit system is generally
commensurate with the size and nature of its business.
8. We have broadly reviewed the records maintained by the Company
pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained in respect of the
applicable products. We have not, however, made a detailed examination
of the records with a view to determine whether these are accurate and
9. According to the information and explanations given to us in
respect of statutory and other dues:
a) The Company has been generally regular in depositing undisputed
statutory dues including Provident Fund, Investors Education and
Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom duty, Excise duty, Cess and other
statutory dues, with appropriate authorities.
b) According to the information and explanations given to us, there are
no undisputed statutory dues outstanding for a period of more than six
months from the date they became payable, as per books of accounts as
at 31st March, 2012.
c) According to the information and explanations given to us, there are
disputed statutory dues, which have not been deposited as on 31st
March, 2012, as given herein below:
Statutes Nature of Dues Amount Forum where disputes
Sales Tax Demand by Appellate 149.00 High Courts
Authorities 509.40 Sales tax tribunals
138.64 Sales tax departments
Central Excise Excise duty 1055.09 Supreme Court
Act, 1944 69.44 High Courts
224.00 Department of Excise
0.32 Settlement Commission
Income Tax Act, TDS on perks Income 175.37 High Courts
1961 Tax 200.13 Department of Income
Other Statutes Other statutory dues 646.63 Supreme Court
464.24 High Courts
48.98 Lower Courts
177.59 Concerned Department
10. There are no accumulated losses of the company as at the end of
the year. The Company has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or bank or bond holder.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a Nidhi / mutual benefit fund /
society. Therefore, the provisions of clause 4 (xiii) of the Order, are
not applicable to the Company.
14. The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of
clause 4(xiv) of the Order, are not applicable to the Company.
15. According to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans
taken by others from banks or financial institutions are not
prima-facie prejudicial to the interest of the Company.
16. To the best of our knowledge and belief, and according to the
information and explanations given to us, in our opinion, the term
loans availed by the Company were, prima facie, applied by the Company
during the year for the purpose for which the loans were obtained other
than temporary deployment pending application.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment of the company.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
19. According to the information and explanations given to us and
records examined by us, charges have been created in respect of secured
20. The Company has not raised any money by public issue during the
21. To the best of our knowledge and belief and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year except for
frauds on the Company for an amount of Rs.0.77 crore by employees of the
Company, out of which Rs.0.52 crore have been recovered and for the
balance amount of Rs.0.25 crore, as informed, necessary action has been
taken for recovery.
For Tej Raj & Pal For S.K. Mittal & Co. For O.P. Totla & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Firm Registration Firm Registration Firm Registration
No.304124E No.001 135N No.000734C
Sd/- Sd/- Sd/-
[Dinakar Mohanty] [S. K. Mittal] [S.R. Totla]
Partner Partner Partner
(M. No. 059390) (M. No. 8506) (M. No. 071774)
Place : New Delhi
Dated : 29th May, 2012