Cag Spots Discrepancies In Sail & #39;S 2000-01 Results

The Steel Authority of India Ltd (SAIL) would have reported a net loss of Rs 1457.66 crore in 2000-01 but for an understatement under seven heads. The Comptroller and Auditor General (CAG), which pointed out a number of discrepancies in the annual report of SAIL, has also remarked that it has provided a Rs 133.4 crore financial assistance to HSCL in excess of contractual obligation for modernisation of Durgapur Steel Plant.

SAIL reported a net loss of Rs 729 crore in its annual report, but CAG said the company had understated its net loss by Rs 728.66 crore.

According to comments made by CAG, employees remuneration and benefits were understated by Rs 326.04 crore.

Income of the company were overstated by Rs 24.20 crore due to accounting of material worth Rs 132.17 crore as sales, although despatch documents were held under the custody of the company or were returned by them. Expenses were understated by Rs 145.22 crore. Sundry debtors were over-estimated by Rs 4.52 crore due to non or short provisioning of bad and doubtful debt. Loans and advances or claims were overestimated by Rs 179.13 crore due to non-provisioning.

Inventories were over estimated by Rs 164.59 crore and short or under charge of depreciation by 44.19 crore.

Understatement of employee benefit include non-provisioning of interim relief in respect of employees for 14 months from April 1998 to May 1999 at Rs 122 crore, no provisions made for liability towards LTC on accrual basis for the block year 1998-99 and 2000-01 estimated at Rs 60.70 crore.

Short provision against wage revision for non-executive employees for the period January 2001 to March 2001 estimated at Rs 70.83 crore and premature adjustment of liability on performance linked benefit scheme at Rs 71.73 crore.

In the annual report, the SAIL management has argued that the provisions for arrears would be made at a later date and interim relief will be made only after discussion with the employees.

Non provisioning for loans and advances made to Iisco Ujjain Pipe & Foundry, a sick company, was estimated at Rs 16.51 crore by CAG. Provisions for electricity charges at Rs 3.06 crore to GRIDCO was unaccounted for. The public sector steel major did not account for sales tax at Chennai at Rs 3.19 crore, Bokaro Rs 0.6 crore and entry tax on limestone at rates prescribed by Madhya Pradesh government at Rs 35.25 crore.