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Steel Authority of India Ltd.

BSE: 500113 Sector: Metals & Mining
NSE: SAIL ISIN Code: INE114A01011
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OPEN 44.95
PREVIOUS CLOSE 44.40
VOLUME 1502130
52-Week high 91.10
52-Week low 44.10
P/E 7.67
Mkt Cap.(Rs cr) 19,062
Buy Price 46.15
Buy Qty 1967.00
Sell Price 46.25
Sell Qty 100.00
OPEN 44.95
CLOSE 44.40
VOLUME 1502130
52-Week high 91.10
52-Week low 44.10
P/E 7.67
Mkt Cap.(Rs cr) 19,062
Buy Price 46.15
Buy Qty 1967.00
Sell Price 46.25
Sell Qty 100.00

Steel Authority of India Ltd. (SAIL) - Auditors Report

Company auditors report

Comments Management's Replies
To the Members of Steel Authority of India Limited
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of Steel Authority of India Limited ("the Company") which comprise the Balance Sheet as at 31st March 2018 the Statement of Profit and Loss (including Other Comprehensive Income) the Cash Flow Statement the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as "Standalone Ind AS Financial Statements") in which are incorporated the Returns of 8 branches for the year ended on that date audited by the branch auditors of the Company's branches.
Management's Responsibility for the Standalone Ind AS 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 Ind AS Financial Statements that give a true and fair view of the financial position financial performance (including other comprehensive income) cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 (as amended).
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Standalone Ind AS 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 Standalone Ind AS Financial Statements based on our audit.
In conducting 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 there under.
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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS Financial Statements. The procedures selected depend on the auditor's judgment including the assessment of the risks of material misstatement of the Standalone Ind AS Financial Statements whether due to fraud or error. In making those risk assessments the auditor considers the internal financial control relevant to the Company's preparation of the Standalone Ind AS 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 Standalone Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.
Basis for Qualified Opinion
The Company has not provided for:
I. As per 9th National Joint Committee on Steel (NJCS) Agreement dated 1st July 2014 (which is valid upto 31st December 2016) signed by the Company contribution by the Company towards proposed Pension Fund for non-executive employees was stipulated at 6% of Basic Pay and D.A.. Pending revision of the said Agreement and against reservation of representatives of non-executive employees Management of the Company has unilaterally reduced the rate of contribution towards the said Pension Fund to 2% of Basic Pay and D.A. and accordingly the Management in the 4th quarter of the current year has written back the provision towards the said Pension Fund for non-executive employees for the period from 01.04.2015 to 31.12.2016 to the extent of Rs.288.14 crore (Refer Note No.49.4) The Company's view is that the Pension Scheme was approved by the Board in its Meeting held on 9th February 2017 with a provision that the contribution towards Pension shall be based on the affordability sustainability and capacity of the company measured as a percentage of Profit Before Tax(PBT) to average Net-worth. This is in line with the Office Memorandum dated 21.5.2014 issued by the Department of Public Enterprises. If the percentage of PBT to average Net-worth is 8% or above the contribution towards Pension shall be limited to 6% of Basic Pay plus DA for Non-executives. Further if the percentage of PBT to average Net-worth is lower than 8% the amount of contribution will be reduced proportionately. However a minimum Pension contribution is kept at the rate of 2% of Basic Pay plus DA even in case of loss during a Financial Year. Accordingly the Board of Directors of the Company has approved the write back of Pension contribution for the period from 1.4.2015 to 31.12.2016 in its meeting held on 30.05.2018.
Comments Management's Replies
II. Wage revision for non-executives is due since 01.01.2017. During the 4th quarter of the current year Management of the Company has reversed adhoc provision already made in last year for the period from 01.01.2017 to 31.03.2017 amounting to Rs.77.47 crore. Further the Management has also reversed provision created thereof for nine months ended 31st December 2017 amounting to Rs.230.77 crore and also not made any provision thereof for the 4th quarter of the year. Pending negotiation with nonexecutive employees and as per the experience and past practice of earlier wage revisions for nonexecutive employees adhoc provisions from 01.01.2017 to 31.03.2017 of Rs.77.47 crore and from 01.04.2017 to 31.12.2017 of Rs.230.77 crore should not have been reversed and provision of Rs.76.92 crore for the quarter ended 31.03.2018 should have been made. The aggregate impact of this on Loss before Tax for the current year amounts to Rs.385.16 crore. (Refer Note No. 49.3) The Company's view is that SAIL is a Government Company and is required to follow Government Guidelines for revising pay scales of its employees. The Department of Public Enterprises (DPE) issued Office Memorandum dated 24.11.2017 in this regard. The Guidelines inter-alia state that Management of PSEs would keep in view the affordability and financial sustainability of such wage revision and further where the five year periodicity of Wage revision is followed Management has to ensure that negotiated scales of pay for two successive wage negotiations do not exceed the existing scales of pay of executives/officers and non-unionized supervisors of respective CPSEs for whom ten years periodicity is being followed. The current pay scales of Non-executive employees in SAIL for some of the levels after wage revision effective from 01.01.2012 for 5 years are already higher than the pay scales of certain Executive employees. Accordingly it has been approved by the Board of Directors of the Company to withdraw the provision of wage revision for Non-executive employees for the period from 01.01.2017 to 31.03.2017 and also for the nine months ended 31st December 2017 and not to make any provision for the 4th Quarter of Financial Year 2017-18.
III. The Company has not provided for :

(i) Demand for Entry tax in various states amounting to Rs.1726.16 crore as on 31st March 2018 (Refer Note No.47.2(a)); and

(ii) Amount paid to Damodar Valley Corporation (DVC) in earlier years against bills raised for supply of power and retained as advance to DVC by Bokaro Steel Plant amounting to Rs.587.72 crore as on 31st March 2018 (Refer Note No.47.2(b)).

Had the impact of all the above qualifications been considered Total Comprehensive Loss (net of tax) for the year ended 31st March 2018 would have been Rs.2238.73 crore against reported Total Comprehensive Loss (net of tax) of Rs.295.39 crore overstatement of other equity as on 31st March 2018 by Rs.1943.34 crore understatement of current liability by Rs.2399.46 crore and understatement of asset by Rs.456.12 crore.

In respect of item stated at (i) the Company's view is that the Nine Judges Bench of Hon'ble Supreme Court vide its judgment dated 11th November 2016 upheld the constitutional validity of levy of Entry Tax by the States and has laid down principles/tests on levy of Entry Tax Acts in various States. The respective regular benches of the Apex Court would hear the matters as per laid down principles. Pending decision by the regular benches of the Apex Court on levy of entry tax in the States of Chhattisgarh Odisha Uttar Pradesh Jharkhand and in respect of the case pertaining to Calcutta High Court the Entry Tax demands under dispute have been treated as contingent liabilities.

In respect of item stated at (ii) the Company's view is that the cases are sub-judice and pending for adjudication before the various judicial authorities for a long time.

The above stated disputed demands stated at III(i) and III(ii) above contested on valid and bonafide grounds have been treated as contingent liabilities as it is not probable that present obligations exist as on 31st March 2018. Therefore there is no adverse impact on loss for the year.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the branch auditors on Financial Statements of the branches referred to in the Other Matters paragraph below except for the effect of the matters described in the Basis for Qualified Opinion paragraph above the aforesaid Standalone Ind AS 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 2018 and its total comprehensive loss (net loss and other comprehensive income) its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter

We draw attention to the following:

Gross sales include sales to Government agencies for Rs.4802.50 crore for the year ended 31st March 2018 (cumulative upto 31st March 2018 Rs.12271.05 crore) which is recognized on provisional contract prices (Refer Note No. 49.2);
Our opinion is not qualified in respect of this matter. Other Matters
We did not audit the financial statements of 8 branches included in the Standalone Ind AS Financial Statements of the Company whose financial statements reflect total assets of Rs.45784.59 crore as at 31st March 2018 and total revenue of Rs.20798.09 crore for the year ended on that date. The financial statements 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 modified 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 in terms of Sub-section 11 of Section 143 of the Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act based on our audit and on the consideration of the reports of the branch auditors on the financial statement of the branches referred to in other matters above we report to the extent applicable 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.
Comments Management's Replies
b) Except for the effects of the matters 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 appears from our examination of those books.
c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet and the Statement of Profit and Loss including Other Comprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
e) Except for the effects of the matters described in the Basis for Qualified Opinion paragraph above in our opinion the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under.
f) The matters 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 the "Annexure 2".
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 (as amended) 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
Standalone Ind AS Financial Statements; (Refer Note No.47 and 48.4)
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. The Company has not transferred to the Investor Education and Protection Fund an amount of Rs.12075460/- being Unclaimed Matured Deposits which the Company is required to transfer to the said Fund; and The Matured Deposits have already been claimed by the successors/ relatives of the individuals but are pending for submission of document of proof of legal heir by the claimants. Appropriate procedure is being
iv. Requirements as to disclosure of holding as well as dealings in Specified Bank Notes (SBN) and reporting thereon are not applicable for the year. followed for refunding the Matured Deposits to the legal heirs.
3. As required by Section 143(5) of the Act we give in "Annexure-3" a statement on the matters specified in the Directions issued by the Comptroller and Auditor General of India in respect of the Company.

 

For Singhi & Co. For V.K. Dhingra & Co. For and on behalf of Board of Directors
Chartered Accountants Chartered Accountants
Firm Registration No.: 302049E Firm Registration No.: 000250N
Sd/- Sd/- Sd/-
[ Pradeep Kumar Singhi ] [ Sanjay Jindal ] (Saraswati Prasad)
Partner Partner Chairman & Managing Director
(M. No.050773) (M. No.087085)
For Chatterjee & Co. For A.K. Sabat & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.:302114E Firm Registration No.:0321012E
Sd/- Sd/-
[ T.N. Ghosh ] [ A.K. Sabat]
Partner Partner
(M. No.050644) (M. No.030310)
Place : New Delhi Place : New Delhi
Dated : 30th May 2018 Date: 3rd August 2018

Independent Auditors' Report

Annexure Rs.1' to the Independent Auditors' Report

Management's Replies
Referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Steel Authority of India Limited on the Standalone Ind AS Financial Statements for the year ended 31s' March 2018
i. in respect of its fixed assets:
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 the extent of area in respect of few lands 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. The delay is attributable to procedural matters involved in ascertaining and reconciling with revenue records maintained by the revenue departments of state governments involved. Necessary action is being taken to update the location and extent of area in respective plants in the fixed assets registers. This is a continuous process.
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 under encroachment/unauthorised occupation. As informed no material discrepancies have been noticed on such verification. in our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Necessary action is being taken to evict the occupants from land and buildings under encroachment/ unauthorised occupation.
c. According to the information and explanations given to us and on the basis of our examination of records of the Company the title/lease deeds of immovable properties are held in the name of Company except in the following cases:

 

Particulars Freehold Land Leasehold Land Building
Area not in name of the Company 47209.74 acres 17335.30 acres and 1 case 2 Buildings and 571.24 sq. mts
Gross Block thereof 173.75 crore 151.33 0.57
Net Block thereof 173.75 crore 130.18 0.32

ii. in respect of physical verification of Inventory:

a. The inventories have been physically verified by the Management with reasonablefrequency during the year in certain cases the stocks have been verified on the basis ofvisual survey/estimates.

b. in our opinion and according to the information and explanations given to usdiscrepancies noticed on physical verification of inventories which were not materialhave been properly dealt with in the books of account.

iii. in our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnership or other parties covered in the register maintained under Section189 of the Companies Act 2013. Hence the clauses (iii) (a) (iii) (b) and (iii) (c) ofParagraph 3 of the order are not applicable to the Company.

iv. The Company has not granted any loans or given any guarantee and security coveredunder Section 185 and 186 of the Companies Act 2013. in respect of investments made bythe Company the provisions of Section 185 and 186 of the Companies Act 2013 have beencomplied with.

v. The Company has not accepted any deposit from public within the meaning of Sections73 to 76 of the Companies Act 2013 and rules framed there under during the year.Accordingly paragraph 3(v) of the Order is not applicable to the Company.

vi. Pursuant to the rules made by the Central Government of india the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. According to the information and explanations given to us in respect of statutorydues:

a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State insurance income-tax Sales Tax Service TaxDuty of Customs Duty of Excise Value Added Taxes (including Goods and Services Tax)Cess and other Statutory Dues with the appropriate authorities. According to theinformation and explanations given to us there are no undisputed statutory duesoutstanding for a period of more than six months from the date they became payable as perbooks of accounts as at 31st March 2018.

b. According to the information and explanations given to us there are disputedstatutory dues which have not been deposited as on 31st March 2018 as givenherein below:

Statute Nature of Dues Amount (Rs. crore) Forum where disputes are pending
Sales Tax VAT & Sales tax VAT and GST Demands 10.45 Supreme Court
GST 495.40 High Courts
680.79 Sales Tax Tribunals
71.87 Sales Tax Departments
Entry Tax Entry Tax Demands 1257.26 Supreme Court
544.49 High Courts
606.92 Tribunal
40.46 Department
Central Excise Act 1944 Excise Duty 266.80 Supreme Court
2375.02 High Courts
1664.36 CESTAT
339.39 Department
0.32 BIFR
Service tax Service Tax 32.76 High Court
127.00 CESTAT
201.25 Department
Customs Duty Income Tax Act 1961 Customs Duty 1.71 Department
TDS on Perks 5.96 Supreme Court
122.85 High Courts
Other TDS matters 0.21 ITAT
27.05 Department
Income Tax Disputes 194.52 High Courts
516.06 ITAT
46.85 Department
TOTAL 9629.75

viii. The Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks Government or dues to debenture holders during the year. Accordinglyparagraph 3(viii) of the Order is not applicable to the Company.

ix. According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments). Term loans from banks and financial institutions have been applied for thepurpose for which they were obtained.

x. To the best of our knowledge and belief and according to the information andexplanations given to us and based on the audit procedures performed we report that nocase of material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the year.

xi. As per notification No. GSR 463(E) dated 5th June 2015 issued by the Ministry ofCorporate Affairs Government of India Section 197 of the Companies Act 2013 is notapplicable to the Government Companies. Accordingly paragraph 3(xi) of the Order is notapplicable to the Company.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the Standalone Ind AS FinancialStatements as required under Ind AS 24 - Rs.Related Party Disclosures' specified underSection 133 of the Act read with relevant rules.

xiv. According to the information and explanations give to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe Company.

For Singhi & Co. For V.K. Dhingra & Co. For and on behalf of Board of Directors
Chartered Accountants Chartered Accountants
Firm Registration No.: 302049E Firm Registration No.: 000250N
Sd/- Sd/-
[ Pradeep Kumar Singhi ] [ Sanjay Jindal ] Sd/-
Partner Partner (Saraswati Prasad)
(M. No.050773) (M. No.087085) Chairman & Managing Director
For Chatterjee & Co. For A.K. Sabat & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.:302114E Firm Registration No.:0321012E
Sd/- Sd/-
[ T.N. Ghosh ] [ A.K. Sabat ]
Partner Partner
(M. No.050644) (M. No.030310)
Place : New Delhi Place : New Delhi
Dated : 30th May 2018 Date: 3rd August 2018

Independent Auditors' Report

Annexure Rs.2' to the Independent Auditors' Report

Management's Replies
Referred to in paragraph 2 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Steel Authority of India Limited on the Standalone Ind AS Financial Statements for the year ended 31st March 2018
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of STEEL AUTHORITY OF INDIA LIMITED ("the Company") as of 31st March 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internal financial reporting considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to Company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment including the assessment of the risks of material misstatement of the Standalone Ind AS Financial Statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS Financial Statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the Company's assets that could have a material effect on the Standalone Ind AS Financial Statements.
Because of the inherent limitations of internal financial controls over financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion the Company has in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

 

For Singhi & Co. For V.K. Dhingra & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.: 302049E Firm Registration No.: 000250N
Sd/- Sd/-
[ Pradeep Kumar Singhi ] [ Sanjay Jindal ]
Partner Partner
(M. No.050773) (M. No.087085)
For Chatterjee & Co. For A.K. Sabat & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.:302114E Firm Registration No.:0321012E
Sd/- Sd/-
[ T.N. Ghosh ] [ A.K. Sabat ]
Partner Partner
(M. No.050644) (M. No.030310)
Place : New Delhi
Dated : 30th May 2018

Independent Auditors' Report

Annexure Rs.3' to Independent Auditors' Report

Questions Auditors' Comments Management's Replies
(Referred to in paragraph 3 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the members of Steel Authority of India Limited on the Standalone Ind AS Financial Statements for the year ended 31s' March 2018)
On the Directions issued by the Comptroller and Auditor General of India under sub section 5 of Section 143 of the Companies Act 2013 based on the verification of records of the Company and according to information and explanations given to us we report that:
A. On the directions under Section 143(5) of Companies Act 2013
1. Whether the Company has clear title/ lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title/lease deeds are not available. Title deeds for freehold land area of 47209.74 acres are not available. Lease deeds for leasehold land area of 17335.30 acres are not available. Necessary action is being taken for registration of pending title deeds and eviction of unauthorized occupants of land.
2. Whether there are any cases of waiver/ write off of debts/loans/ Waiver/ write offs are done on case to case basis with the approval of competent authorities. Details of waiver/ write off of debts/ loans/ interest etc. are as under:
interest etc. if yes the reasons there for and the amount involved. Waiver of hospital dues from poor patients amounting to Rs.0.03 crore in case of Rourkela Steel Plant.
3. Whether proper records are The Company has maintained adequate records in respect of inventories lying with third parties.
maintained for inventories lying with third parties & assets received as gifts/grants from Govt. or other authorities. No assets were received as gifts from the Government or other authorities during the year.

 

For Singhi & Co. For V.K. Dhingra & Co. For and on behalf of Board of Directors
Chartered Accountants Chartered Accountants
Firm Registration No.: 302049E Firm Registration No.: 000250N
Sd/- Sd/-
[ Pradeep Kumar Singhi ] [ Sanjay Jindal ] Sd/-
Partner Partner (Saraswati Prasad)
(M. No.050773) (M. No.087085) Chairman & Managing Director
For Chatterjee & Co. For A.K. Sabat & Co.
Chartered Accountants Chartered Accountants
Firm Registration No.:302114E Firm Registration No.:0321012E
Sd/- Sd/-
[ T.N. Ghosh ] [ A.K. Sabat]
Partner Partner
(M. No.050644) (M. No.030310)
Place : New Delhi Place : New Delhi
Dated : 30th May 2018 Date: 3rd August 2018

Annexure-II to the Board's Report

Comments of C&AG

COMMENTS OF THE COMPTROLLER & AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OFTHE COMPANIES ACT 2013 ON THE STANDALONE FINANCIAL STATEMENTS OF STEEL AUTHORITY OF INDIALIMITED FOR THE YEAR ENDED 31st MARCH 2018

The preparation of Financial Statements of STEEL AUTHORITY OF INDIA LIMITED forthe year ended 31st March 2018 in accordance with the financial reportingframework prescribed under the Companies Act 2013 (Act) is the responsibility of themanagement of the Company. The Statutory Auditors appointed by the Comptroller and AuditorGeneral of India under Section 139(5) of the Act are responsible for expressing opinion onthe Financial Statements under section 143 of the Act based on independent audit inaccordance with the standards on auditing prescribed under Section 143(10) of the Act.This is stated to have been done by them vide their Audit Report dated 30thMay 2018.

I on behalf of the Comptroller and Auditor General of India have conducted asupplementary audit under Section 143(6)(a) of the Act of the Financial Statements of STEELAUTHORITY OF INDIA LIMITED for the year ended 31st March 2018. Thissupplementary audit has been carried out independently without access to the workingpapers of the Statutory Auditors and is limited primarily to inquiries of the StatutoryAuditors and company personnel and a selective examination of some of the accountingrecords. On the basis of my audit nothing significant has come to my knowledge whichwould give rise to any comment upon or supplement to Statutory Auditors' Report.

For and on the behalf of the
Comptroller & Auditor General of India
Sd/-
(Indu Agrawal)
Principal Director of Commercial Audit & Ex-Officio Member Audit Board Ranchi
Place : Ranchi
Dated : 31st July 2018