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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

Nov 26, 16:00
103.65 -6.30 (-5.73%)
Volume
AVERAGE VOLUME
5-Day
3,144,231
10-Day
2,617,331
30-Day
3,694,448
2,933,170
  • Prev. Close

    109.95

  • Open Price

    108.90

  • Bid Price (Qty.)

    103.65 (5061)

  • Offer Price (Qty.)

    103.95 (500)

NSE Live

Nov 26, 16:00
103.65 -6.30 (-5.73%)
Volume
AVERAGE VOLUME
5-Day
40,409,864
10-Day
30,988,495
30-Day
46,996,367
56,238,864
  • Prev. Close

    109.95

  • Open Price

    108.55

  • Bid Price (Qty.)

    103.65 (10190)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2021 2019 2018 2017 2016 2015 2014 2013 2012

Auditor's Report

We have audited the accompanying financial statements of Steel Authority of India Limited (the Company), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information, 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. Management''s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors'' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion 1. The Company has not provided for; a) entry tax amounting to Rs.91.55 crore( current year Rs.9.91 crore) in the state of Uttar Pradesh, Rs 1071.28 crore (current year Rs.182.82 crore) in the state of Chhatisgarh and Rs.214.81 crore (current year Rs.44.49 crore) in the state of Odisha (refer note no.28.2(a)); b) claims of Rs.291.76 crore (current year Rs.74.36 crore) by DVC for supply of Power (refer note no. 28.2(b)); 2. In respect of Rourkela Steel Plant (RSP), depreciation and interest has been short provided by Rs.104.92 crore and Rs.28.74 crore respectively ( refer note no. (30.2 )). resulting in overstatement of profit by Rs.133.66 crore and fixed assets by similar amount. The total impact of para (1) to (2) has resulted in overstatement of profit for the year by Rs.455.24 crore, cumulative Profit by Rs.1803.06 crore, understatement of Liability by Rs.1669.40 crore, overstatement of fixed assets by Rs.133.66 crore (including interest during construction Rs.28.74 crore). Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion The mentioned cases are sub-judice and pending before the Hon''ble Supreme Court. The disputed demands, contested on valid and bonafide grounds, have been disclosed as contingent liabilities as it is not probable that present obligations exist on the Balance Sheet date. Therefore, there is no adverse impact on profit. These cases were sub-judice as on 31st March, 2012 also and there is no change in the status of these cases during the Financial Years 2012-13 & 2013-14. As part of its Modernization and Expansion Plan / other Capital Schemes in Rourkela Steel Plant, the Assets have been capitalized after installation, trial run, removal of all defects, issue of acceptance certificate and having become ready for commercial production during the year. The capitalisation has been done in accordance with applicable Accounting Standards and Generally Accepted Accounting Principles. The position has been adequately explained in Note No. 30.2 forming part of the financial statements. Therefore, there is no over statement of profit. paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014; (b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and (c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Emphasis of Matter We draw attention to: i. Claims/demands against the Company where the Company has lost in the first or subsequent appeals and has made further appeals before higher courts / forums (refer note no. 28 (f)); ii. Sales to Government agencies recognised on provisional contract prices (refer note no. 32.1); iii. Capitalisation at IISCO Steel Plant (valuing Rs.5457.48 crore) during the financial year (refer note no. 30.1); iv. Capital work-in-progress includes Rs.115.38 crore in respect of Steel processing Unit at Bettiah not yet capitalised [refer note no.29.4(b)]; v. Balance confirmation, reconciliation and consequential adjustments, if any (refer note no. 31.3); vi. Reversal of pension component of employee benefit expenses of Rs.201.21 crores and expenditure during construction Rs.9.63 crores [refer note no. (32.8)]; vii. Prior period income includes Rs. 120.94 crores towards write back of depreciation on certain fixed assets, erroneously depreciated earlier at 100% instead of 95% required as per the Company''s policy and Schedule XIV of the Companies Act, 1956 read with section 205 and 350 of the Companies Act, 1956. [refer note no. 32.3(a)] ; viii. Prior period income includes interest of Rs. 20.67 crore received on short term deposits held in the name of District & Session Judge A/c land, for payment to land oustees [refer note no.(32.3(b)] ; ix. Net realisable value of assets retired from active use (refer note no.29.3) ; x. Explosion of Boiler no.3, lying in capital work in progress valuing Rs.37 crore at IISCO Steel Plant. Loss due to damage, if any, is not yet determined (refer note no.30.4); Our opinion is not qualified in respect of these matters. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor''s Report) Order, 2003 (the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 2. As required by Section 227(3) of the Act, we report that: a. 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; b. In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Plants/ Units/ Branches /Other Offices not visited by us. The Branch Auditors'' reports have been forwarded to us and have been appropriately dealt with; c. Except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.; and d. Except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; e. On the basis of written representations received from the directors as on 31 March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. Annexure to the Auditor''s Report (Referred to in paragraph 1 of our Report on Other Legal and Regulatory Requirements) 1. a) The Company has maintained proper records showing in most cases, full particulars including quantitative details and situation of its fixed assets. However, the location and extent of area in few of the plants in respect of land needs to be updated in the fixed assets registers and have to be reconciled with the revenue records as to the extent of holding and location of land 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. However, it is observed that certain land and buildings are in unauthorised occupation. 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 the year. 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. 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, and aggregating during the year to Rs.5,00,000 or more with 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. The Company has an internal audit system, which 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 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, 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, 2013. a) According to the information and explanations given to us, there are disputed statutory dues, which have not been deposited as on 31st March, 2014 as given herein below: Statute Nature of Dues Amount Forum where (Rs.in crore) disputes are pending. Sales Tax & VAT Demand by 3.05 Supreme Court Appellate Authorities 158.47 High Courts 548.35 Sales Tax Tribunals 90.73 Sales Tax Departments 800.60 Central Excise Excise Duty 19.59 Supreme Court Act, 1944 185.13 High Courts 598.74 CESTAT 351.40 Department of Excise 1154.86 Income Tax TDS on Perks 132.67 High Courts Act, 1961 TDS Refund Claim 8.11 High Courts Income Tax Disputes 155.77 Department of Income Tax 194.52 ITAT 491.07 Other Statutes Other Statutory Dues 960.78 Supreme Court (including Cess) 1930.86 High Courts 57.48 Lower Courts 302.16 Concerned Department 3251.28 TOTAL 5697.81 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 bonds issued. 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, we report that no fraud on or by the Company has been noticed or reported during the year except in Visvesvaraya Iron & Steel Plant Bhadravati, an employee of the company was involved in delivery material without following the specified procedures of collection of advances for sale of products. An amount of Rs.2.68 crore remains unrecoverable on this account. The procedures have been strengthened to avoid the recurrence of such case. A complaint has been filed with the Police and the matter is under investigation. Also, efforts are being made to recover the balance amount of Rs.2.68 crore. For S.K. Mittal & Co. For O.P. Totla & Co. For B.N. Misra & Co. For and on behalf of the Board of Directors Chartered Accountants Chartered Accountants Chartered Accountants Firm Registr -ation No. Firm Regist -ration No. Firm Registration No. 001135N 000734C 321095E Sd/- Sd/- Sd/- Sd/- [S.K.Mittal] [ S.K Acharya] [S.C.Dash] (C. S. Verma) Partner Partner Partner Chairman (M.No. 8506) (M. No. 78371) (M. No. 050020) Place : New Delhi Place: New Delhi Dated : 28th May, 2014 Dated: 11th August, 2014