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Steel Authority of India Ltd.

BSE: 500113 | NSE: SAIL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE114A01011 | SECTOR: Steel - Large

BSE Live

Jan 20, 11:20
104.55 -0.10 (-0.10%)
Volume
AVERAGE VOLUME
5-Day
3,212,197
10-Day
3,236,996
30-Day
2,394,990
965,387
  • Prev. Close

    104.65

  • Open Price

    104.75

  • Bid Price (Qty.)

    104.50 (442)

  • Offer Price (Qty.)

    104.55 (115)

NSE Live

Jan 20, 11:20
104.55 -0.10 (-0.10%)
Volume
AVERAGE VOLUME
5-Day
34,736,824
10-Day
38,632,400
30-Day
34,045,879
11,147,453
  • Prev. Close

    104.65

  • Open Price

    105.00

  • Bid Price (Qty.)

    104.50 (62623)

  • Offer Price (Qty.)

    104.55 (6648)

Annual Report

For Year :
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Auditor's Report

We have audited the attached Balance Sheet of STEEL AUTHORITY OF INDIA LIMITED, as on 31st March 2006 and the Profit & Loss Account of the company for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date, 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. 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. As required by the Companies (Auditors' Report) Order, 2003 as amended by Companies (Auditors' Report) (Amendment) Order, 2004 (together the Order) issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956 (the Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: 1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; 2. 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 branches not visited by us. The branch auditors' reports have been forwarded to us and have been appropriately dealt with. 3. The Balance Sheet and the Profit & Loss Account dealt with by this report, are in agreement with the books of account and with the audited returns from the branches. 4. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act. 5. In terms of Government of India, Ministry of Finance, 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 read with significant accounting policies and notes appearing in Schedule 3, 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 2006; ii) in case 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. For S.K. Mittal & Co. For Ray & Ray For and on behalf of Chartered Accountants Chartered Accountants the Board of Directors Sd/- Sd/- Sd/- (Bhuvnesh Maheshwari) (B.K. Ghosh) (V.S.Jain) Partner Partner Chairman (M. No. 88155) (M. No. 51028) For Dass Maulik Mahendra K Agarwala & Co. Place : New Delhi Chartered Accountants Dated : 28th July 2006 Sd/- (Mahendra K Agrawala) Partner (M. No. 51764) Place : New Delhi Dated : 25th May, 2006 ANNEXURE TO THE AUDITORS' REPORT (Referred to in our Report of even date) 1. a) The company has maintained proper records showing in most cases, full particulars including quantitative details and situation of its fixed assets. b) The fixed assets of the company have been physically verified by the management at reasonable intervals in a phased manner so as to cover each asset atleast once in three years. As informed to us, no material discrepancies have been noticed on such verification wherever reconciliation has been carried out and the same have been adjusted in the books. In few cases of fixed assets, verified but not reconciled, the discrepancies are yet to be ascertained. c) In our opinion and according to the information and explanations given to us, there is no substantial disposal of fixed assets during the year. The reconciliation of such fixed assets is in progress and discrepancies, if any, will be adjusted accordingly. This is a continuous process. 2. a) The inventories have been physically verified by the management with reasonable frequency during the year. In certain cases, the stocks of scraps, middlings and rejects 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: a) The company has granted loans to the following company covered in the register maintained under section 301 of the Companies Act, 1956. (Rs. in Crore) Particulars Loans granted Closing Balance Maximum during the year as on 31.03.2006 Balance during the year Bhilai Electic Nil Nil 9.64 Supply Co. Pvt. Ltd. b) The rate of interest and other terms & conditions of such loans are, in our opinion, prima-facie, not prejudicial to the interest of the company. c) The company to whom loans have been given, is regular in repayment of principal amount and interest. d) The company has not taken any loans, secured or unsecured, from companies, firms, or other parties covered in the register maintained under section 301 of the Act. e) In view of our comments in paragraph 3(d) above, clauses iii(e), iii(f) and iii(g)\of paragraph 4 of the Order are not applicable to the Company. 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 the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. b) According to the information and explanations given to us, the 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 Act, and aggregating during the year to Rs. 5,00,000 or more in respect of each party, have been made at prices which are reasonable having regard to the prevailing market prices for such goods, materials or services or the prices at which such transactions for similar goods or services have been made with other parties. 6. In our opinion and according to the information and explanations given to us, the company has complied with the directives of Reserve Bank of India and provisions of Section 58A and 58AA or any other relevant provisions of the Act and the rules framed thereunder, wherever applicable, with regard to the deposits accepted from the public. 7. In our opinion, the company's internal audit system, generally commensurate with the size and nature of its business, is required to be strengthened with regard to implementation by enlarging the scope and frequency of coverage in the audit plan. Internal audit plan with regard to scope and frequency of coverage would be given greater emphasis. 8. We have broadly reviewed the records maintained by the Plants for production of Fertilisers (Ammonium Sulphate), Chemicals (Benzene & Toluene), Industrial gases and Steel products pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not however, made a detailed examination of the records with a view to determine whether these are accurate and complete. 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, Customs duty, Excise duty, Cess and other statutory dues, with appropriate authorities. b) According to the information and explanations given to us, following undisputed statutory dues were outstanding as per books of accounts as at 31st March, 2006, for a period of more than six months from the date they became payable. Statute Nature of dues Amount (Rs. in Crore) West Bengal State Duty on Own Generation Electricity Act of electricity 4.57 c) According to the information and explanations given to us, there are disputed statutory dues which have not been deposited as given hereinbelow. Statutes Nature of Dues Amount Forum where disputes (Rs.in Crore) are pending. Sales Tax Demand 549.43 Sales tax departments 507.14 Sales tax tribunals 103.02 High Courts 1159.59 Central Excise Excise duty Act, 1944 43.02 Department of Excise 484.54 CESTAT 18.99 Settlement Commission 0.89 High Courts 387.01 Supreme Court 934.45 Income Tax TDS on perks 31.09 High Courts Act, 1961 TDS on perks 108.77 (Deposits stayed by High Court) 139.86 Customs Act Custom duty 3.48 Department of Customs Other Statutes Other statutory dues 171.58 High Courts (including cess) 8.26 Lower Courts 19.37 Concerned department 3.93 State Government 203.14 TOTAL 2440.52 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. State Government of West Bengal increased the electricity duty rate on own generation of electricity w.e.f January 2005, which was subsequently reduced from April 2005. The matter has been taken up with the State Government for reducing the duty from January 2005 itself. Liability has been fully provided for and would be settled on getting final decision of the State Government. 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, bank or debenture holders. 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, the Company has not raised any term-loans during the year under audit. Hence, paragraph 4 (xvi) of the Order is not applicable. 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 Act. 19. According to the information and explanations given to us and records examined by us, securities have been created in respect of secured bonds issued except in respect of a certain series of non-convertible bonds where security is yet to be created (As stated in schedule 1.3; Secured Loans). 20. The company has not raised any money by public issue during the year. 21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the company has been noticed or reported during the year. As regards fraud on the company, the following cases have been noticed or reported during the year. Sl. Brief Description of the case Amount involved No. (Rs. in Crore) 1. Misuse of employee entitlements (Rs. 0.01 crore since recovered) 0.06 2. Misuse of township facilities by others 0.02 3. Theft of company's property 0.04 TOTAL 0.12 Cases are being followed up for recoveries. For S.K. Mittal & Co. For Ray & Ray For and on behalf of the Chartered Accountants Chartered Accountants Board of Directors Sd/- Sd/- Sd/- (Bhuvnesh Maheshwari) (B.K. Ghosh) (V.S. Jain) Partner Partner Chairman (M. No.88155) (M. No. 51028) For Dass Maulik Mahendra K Agrawala & Co. Chartered Accountants Sd/- (Mahendra K Agrawala) Partner (M. No. 51764) Place : New Delhi Place : New Delhi Dated : 25th May, 2006 Dated : 28th July, 2006