We have audited the accompanying standalone financial statements of
STEEL AUTHORITY OF INDIA LIMITED (''the Company''), which comprise the
Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and
the Cash Flow Statement and a summary of significant accounting
policies and other explanatory information for the year then ended.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone 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 principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, 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.
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. 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 the 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, 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 qualified audit opinion on the
standalone financial statements.
Basis for Qualified Opinion
The Company has not provided for:
i. entry tax amounting to Rs.97.22 crore
(current year Rs.2.33 crore and last year
Rs. 3.34 crore) in the The mentioned cases are
sub-judice and pending
state of Uttar Pradesh, Rs.1091.02 crore
(current year Rs. 6.70 crore and last year
Rs. 13.04 crore) Hon''ble Supreme Court
and other courts for a
long time. The
in the state of Chhattisgarh and Rs.341.15
crore (current year Rs. 7.20 crore and last
year Rs.119.14 disputed demands,
contested on valid and
bonafide grounds, have
crore) in the state of Odisha (refer note
no. 29.l(i)(g); been disclosed as
as it is not probable
ii. amount paid to DVC against bills
raised for supply of power and
retained as advance by Bokaro present obligations
exist on the Balance
Sheet date. Therefore,
Steel Plant amounting to Rs.491.27 crore
(current year- Rs. 97.68 crore and last
year- Rs.101.83 there is no adverse
impact on loss. There
is no change in the
crore) (refer note no. 29.l(i)(f)); status of these cases
The total impact of above para (i) and (ii) has resulted in
understatement of Loss after Tax for the year by Rs. 1,321.35 crore
(Over statement of profit of Previous Year ended 31 st March, 2015 by
Rs. 1906.75 crore), overstatement of Reserves & Surplus by Rs. 1321.35
crore (As at 31 st March, 2015 Rs. 1906.75 crore), understatement of
Current Liabilities by Rs. 2020.66 crore (As at 31st March, 2015- Rs.
1906.75 crore) and understatement of Total Assets by Rs. 699.31 crore
(Previous Year ended 31st March, 2015 Rs. Nil).
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 paragraph above, the
aforesaid standalone 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,
of the state of affairs of the Company as at 31st March 2016 and its
loss and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the net sales include sales to Government agencies
which are recognised on provisional contract prices (refer note no.
Our opinion is not qualified in respect of this matter.
We did not audit the financial statements/ information of 8 branches
included in the standalone financial statements of the Company whose
financial statements/financial information reflect total assets of Rs.
44971.85 crore as at 31st March, 2016 and total revenues of Rs.
15,849.68 crore for the year ended on that date, as considered in the
standalone financial statements. The financial statements/ information
of these branches have been audited by the branch auditors whose
reports have been furnished to us, and our opinion in so far as it
relates to the amounts and disclosures included in respect of these
branches, is based solely on the report of such branch auditors.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (the
Order) issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure ''A''
a statement on the matters specified in the paragraph 3 and 4 of the
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above,in our opinion proper books of
account as required by law have been kept by the Company so far as it
appears from our examination of those books;
c. The reports on the accounts of the branch offices of the Company
audited under Section l43 (8) of the Act by branch auditors have been
sent to us and have been properly dealt with by us in preparing this
d. The balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this Report are in agreement with the
books of account;
e. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph above,in our opinion, the aforesaid
standalone financial statements comply with the Accounting Standards
specified under Section l33 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014;
f. The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may not have an adverse effect on the
functioning of the Company.
g. As per notification No. GSR 463(E) dated 5th June 2015 issued by
the Ministry of Corporate Affairs, Government of India, Section 164(2)
of the Companies Act, 2013 is not applicable to the Company;
h. With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in Annexure ''B'', and
i. with respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer note Note No.
29.1 to 29.4 to the financial statements;
ii. The company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund.
3. As required by section 143(5) of the Act, we give in Annexure ''C'', a
statement on the matters specified by the Comptroller and Auditor
General of India for the Company.
Annexure ''A'' referred to in paragraph 1 under the heading Report on
other legal and regulatory requirements of our report of even date
Re: Steel Authority of India Limited (''the Company'')
i. In respect of its fixed assets:
a. The Company has maintained proper records showing in most cases,
full particulars including quantitative details and Necessary action is
being taken to situation of its fixed assets. However, the location and
the extent of area in few in respect of land needs to be updated update
the location and extent of area in the fixed assets registers and have
to be reconciled with the revenue records as to the extent of holding
and location in respective plants in the fixed assets of land. The
delay is attributable to procedural matters involved in ascertaining
and reconciling with revenue records registers.This is a continuous
process. maintained by the revenue departments of state governments
b. The fixed assets of the Company have
been physically verified by the management
at reasonable intervals in a phased Necessary action is
being taken to
manner so as to generally cover all the
assets once in three years. However, it is
observed that certain land and evict the occupants from
buildings are under encroachment/
unauthorised occupation. As informed to
us, no material discrepancies have been buildings under
noticed on such verification. unauthorised occupation.
c. According to the information and
explanations given to us and on
basis of our examination of records of the
Company, the title deed of immovable
property are held in name of company except
in following instances:
Particulars Freehold Land Leasehold Land Building
Not in name of
company 40565.76 acres 17297.73 acres 1312 sq. Mtr and
Gross block of land
not 120.52 146.62 0.69
in name of Company
(Rs. in Crore)
Net block of land
not in 120.52 126.25 0.44
name of Company (Rs.
ii. In respect of physical verification of Inventory:
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, discrepancies noticed on physical verification of
inventories were not material and have been properly dealt with in the
books of account.
iii. In our opinion and according to the information and explanations
given to us, the Company has not granted any loans, secured or
unsecured, to companies, firms or other parties listed in the Register
maintained under Section l89 of the Companies Act, 2013. Therefore,
clauses (iii) (a) and (iii) (b) of Paragraph 3 of the Order are not
applicable to the Company
iv. The Company has not granted any loans or made any investments or
given any guarantee and security covered under Sections l85 and l86 of
the Companies Act, 20l3.
v. According to the information and explanations given to us, the
Company has not accepted any deposits from public during the year.
Accordingly, paragraph 3(v) of the Order is not applicable to the
vi. The Company has made and maintained cost records pursuant to the
Companies (Cost Records and Audit) Rules, 2014 prescribed by the
Central Government under Section 148(1) of the Companies Act, 2013.
vii. According to the information and explanations given to us in
respect of statutory dues:
a. The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise,
Value Added Taxes, Cess and other Statutory Dues to the appropriate
authorities. 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, 2016.
b. According to the information and explanations given to us, there
are disputed statutory dues, which have not been deposited as on 31st
March, 2016 as given herein below:
Statute Nature of Dues Amount Forum where disputes
crore) are pending
Sales Tax Sales tax and VAT 6.51 Supreme Court
& VAT Demands 604.06 High Courts
624.35 Sales Tax Tribunals
121.01 Sales Tax Departments
Entry Tax Entry tax 1091.02 Supreme Court
666.29 High Courts
Central Excise Excise Duty 152.02 Supreme Court
Act, 1944 140.14 High Courts
Service Tax Service Tax 137.96 CESTAT
Customs Duty Customs Duty 5.09 CESTAT
Income Tax TDS on Perks 46.74 Supreme Court
Act, 1961 105.94 High Courts
Other TDS matters 105.79 High Courts
0.89 Department of
Income Tax Disputes 194.52 High Courts
350.85 Department of
viii. The Company has not defaulted in repayment of loans or
borrowings to a financial institutions, banks, government or dues to
debenture holders during the year. Accordingly, paragraph 3(viii) of
the Order is not applicable to the Company.
ix. The Company did not raise any money by way of initial public offer
or further public offer (including debt instruments).
Term loans from banks and financial institutions have been applied for
the purpose for which they were obtained.
x. According to the information and explanations given to us, no
material fraud by the Company or on the Company by its officers or
employees has been noticed or reported during the course of our audit.
xi. As per notification No. GSR 463(E) dated 5th June 2015 issued by
the Ministry of Corporate Affairs, Government of India, Section 197 of
the Companies Act, 2013 is not applicable to the Company. Accordingly,
paragraph 3(xi) of the Order is not applicable.
xii. According to the information and explanations given to us, the
company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the
Order is not applicable.
xiii. According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with sections l77 and l88 of
the Companies Act, 2013 where applicable and details of such
transactions have been disclosed in the financial statements as
required by the applicable accounting standards.
xiv. According to the information and explanations give to us and based
on our examination of the records, the Company has not made any
preferential allotment or private placement of shares or fully or
partly convertible debentures during the year.
xv. According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into non-cash transactions with directors or persons
connected with him.
Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act, 1934.
For B.N. Misra & Co For Sharma Goel & Co., LLP For and on behalf of
Board of Directors
Chartered Accountants Chartered Accountants
no.32l095E Firm Registration
[ B.N.Misra ] [ Amar Mittal ]
(M. No. 083927) (M. No. 017755 ) Sd/-
For Singhi & Co. For Chatterjee & Co. (P.K. Singh)
Accountants Chartered Accountants Chairman
no.302049E Firm Registration
[ Shrenik Mehta ] [ S.K Chatterjee]
(M. No. 063769) (M. No. 003124)
Place : New Delhi Place : New Delhi
Dated : 30th May, 2016 Date : 11th August,