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S.A.L Steel Ltd.

BSE: 532604 Sector: Metals & Mining
NSE: SALSTEEL ISIN Code: INE658G01014
BSE 00:00 | 21 Aug 6.52 0.17
(2.68%)
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6.30

HIGH

6.60

LOW

6.30

NSE 00:00 | 21 Aug 6.50 0.15
(2.36%)
OPEN

6.35

HIGH

6.75

LOW

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OPEN 6.30
PREVIOUS CLOSE 6.35
VOLUME 12609
52-Week high 10.30
52-Week low 4.90
P/E
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.30
CLOSE 6.35
VOLUME 12609
52-Week high 10.30
52-Week low 4.90
P/E
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

S.A.L Steel Ltd. (SALSTEEL) - Auditors Report

Company auditors report

To the Members of S.A.L. STEEL LIMITED AHMEDABAD

Report on the Financial Statements

We have audited the accompanying financial statements of S.A.L STEEL Limited ('theCompany) which comprise the Balance sheet as at March 31 2017 the Statement of Profitand loss the Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with relevant rules issued there under.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Basis for Qualified Opinion

1. Management is of the view that they do not anticipate execution of its ongoingcapital projects. However the Company has not made adequate provision towards recovery ofcapital advances for the said project for the amount of Rs. 912.32 Lacs which arecurrently shown under Long term loans and advances. The consequential impact ofadjustment if any on the actual realization of said advances on the financial statementsis currently not ascertainable. Therefore we are unable to comment on its consequentialfinancial impact if any on the financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profits for the year ended March 31 2017 and its cashflows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the Financial Statements:

1. Note 26 to the financial statements which describes that the Non disclosure ofReportable Segments as required under Accounting Standard - 17 'Segment Reporting' thereis no impact on the Statement of Profit and Loss due to non disclosure.

2. During the year the Company has accumulated losses and its net worth has been fullyeroded. The Financial Statements indicates that the Company has incurred a net loss duringthe previous year(s) and the Company's current liabilities exceeded its current assets asat the current and previous year balance sheet date. These conditions indicate theexistence of a material uncertainty that may cast significant doubt about the Company'sability to continue as a going concern. However the financial statements of the Companyhave been prepared on a going concern basis for the reasons stated in the said Note 28 tothe financial statements.

3. Assignment of dues for various facilities provided to the company by banks to InventAssets Securitization and Reconstruction Private Limited as per Note 29 to the financialstatements.

4. Note 27 to the Financials regarding the company's reference being filed undersection 15(1) of SICA (Special Provision) Act 1985. The Honorable BIFR vide its letterreference no 3(S-10)/BC/2015 dated 24th August 2015 has registered the reference filed bythe company vide case no 109/2015.

Our opinion is not modified in respect of these matters.

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 subsection (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the Order to the extent applicable.

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 bestof 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 Opinionparagraph above in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) The Balance sheet the Statement of Profit and loss and the Cash flow statementdealt with by this Report are in agreement with the books of account;

d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rulesissued there under;

e) The going concern matter as described in sub-paragraph (2) under the Emphasis ofMatters paragraph above in our opinion may have an adverse effect on the functioning ofthe Company.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

g) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct; and

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Note 18 to the financial statements;

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its Financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8 November2016 to 30 December 2016 . Based on audit procedures and relying on Managementrepresentation we report that the disclosures are in accordance with the books ofaccounts maintained by the Company and as produced to us by the Management . Refer to Note45 to the Financial statements.

For Talati & Talati
Chartered Accountants
(Firm Reg. No: 110758W)
Umesh Talati
Place: Ahmedabad Partner
Date: May 27 2017 Mem No. : 034834

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Independents Auditor's Report to the members of the Companyon the Standalone financial statement for the year ended 31st March 2017 we report that:

i) In respect of its Fixed Assets:

a) The company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets on the basis of availableinformation.

b) As explained to us a major portion of the fixed assets has been physically verifiedby the management during the year in accordance with a phased program of verificationadopted by the Company. In our opinion the frequency of verification is reasonable havingregard to the size of the company and nature of its assets. As informed to us no materialdiscrepancies were noticed on such physical verification.

c) According to the information and explanation given to us and on the basis of ourexamination of records of the company the title deeds of the immovable properties heldare in the name of the company.

ii) In respect of its inventories:

As explained to us inventories (excluding Goods in Transit and Goods lying at Port)were physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of the verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material.

iii) In respect of Loans Secured or Unsecured granted by the company to companiesfirms Limited liability partnership or other parties covered in the register maintainedunder section 189 of the Companies Act 2013:

According to the information and explanations given to us and on the basis of therecords produced before us the company has not granted any Loan Secured or Unsecured tothe companies Limited liability partnership or firms or other parties covered in theregister maintained under section 189 of the Companies Act 2013 and hence sub-clause (a)& (b) & (c) of paragraph 3 of the Companies Auditor's Report Order 2016 are notapplicable to the Company.

iv) The Company has complied with the provision of Section 185 & 186 of CompaniesAct 2013 with respect of loans investments and guaranty made.

v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit and hence the provisions of Section 73 to 76 or anyother relevant provisions of the Companies Act and the Companies (Acceptance of Deposits)Rules 2014 with regard to the deposits accepted are not applicable to the Company.Therefore the provisions of Clause (v) of paragraph 3 of the Companies Auditor's ReportOrder 2016 are not applicable to the Company. According to the information andexplanations given to us no order has been passed by Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records as specifiedunder Section 148 of the Companies Act 2013 and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have however not madea detailed examination of the cost records with a view to determine whether they areaccurate or complete.

vii) In respect of the Statutory dues:

a) According to the records of the company undisputed Statutory dues includingprovident fund employees state insurance income-tax sales-tax wealth-tax service taxduty of customs duty of excise value added tax cess and any other statutory dues havenot been generally regularly deposited during the year with the appropriate authorities.On the basis of records produced before us for our verification and according to theinformation & explanation given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at 31st March 2017 for a period of more than sixmonths from the date of becoming payable except dues for (1) deferred sales tax liabilityfor Rs. 22.63 lacs which was due on May 2016 and not paid by the Company and the same isunpaid as at 31st March 2017 and (2) dues of Value added tax(VA T) during theyear to the tune of Rs. 119428290/- which are outstanding for more than 180 days as atthe balance sheet date..

b) On the basis of records produced before us for our verification and according to theinformation and explanations given to us the details of disputed dues of Rs.257386625/- have not been deposited as on 31st March 2017 on account of matterspending before the appropriate authorities. The details of which are as under:

Name of the Statute Nature of the Dues Period to which the amount Relates Forum where the dispute is pending Amount under dispute not yet deposited (in Rs.)
1. Central Excise Act 1944 Central Excise Duty 2006-07 Appellate Tribunal Ahmedabad 555781
2. Central Excise Act 1944 Central Excise Duty 2008-09 Appellate Tribunal Ahmedabad 1041057
2. Central Excise Act 1944 Central Excise Duty 2008-09 Appellate Tribunal Ahmedabad 1041057
3. Custom Act 1962 Custom Duty 2011-12 Appellate Tribunal Ahmedabad 24179202
4. Central Excise Act 1944 Central Excise Duty 2012-13 Appellate Tribunal Ahmedabad 44984993
5. Gujarat Value Added Tax Act 2003 Value Added Tax 2006-07 Jt. Value Added Tax Commissioner (Appeal) 36563595
6. Central Excise Act 1944 Central Excise Duty 2008-09 to 2010-11 Supreme Court 59014068
7. Central Service Tax Act 1994 Service Tax Duty 2009-10 Service Tax Commissioner 2536074
8. Central Excise Act 1944 Central Excise Duty 2005-06 to Sep 2014 Central Excise Commissioner 62628410
9. Central Excise Act 1944 Central Excise Duty 2012-13 Central Excise Commissioner 8011535
10. Gujarat Value Added Tax Act 2003 Value Added Tax 2011-12 Jt. Value Added Tax Commissioner (Appeal) 17871910

viii) On the basis of the information and explanation given to us and on the basisof records produced before us the company has defaulted in repayment of dues as follows:

NAME OF THE BANK

NATURE OF FACILITY

Amount (in Rs.)of Default as at 31-03-2017

Period Of Default (No. of Days)

Union Bank Of India

Term Loan

458510556

1 to 1170

Working Capital

319391914

1 to 745

Interest

304167170

1 to 745

State Bank of India

Term Loan

410587716

1 to 1170

Working Capital

373580824

1 to 944

Interest

394186852

1 to 944

State Bank of Saurashtra

Term Loan

76757187

1 to 1170

State Bank of Hyderabad

Term Loan

50711642

1 to 1170

Interest

23872699

1 to 836

*The Dues of State bank of Hyderabad Union Bank of India State bank of India havebeen assigned to Invent Assets Securitization and Reconstruction Pvt Ltd respectivelyw.e.f 1st July 2015 3rd July 15 and 30th Oct 2015. However no agreements have beenexecuted between the company and Invent Assets Securitization and Reconstruction Pvt Ltdas on March 31 2017. And hence defaults have been considered towards banks as mentionedabove till the date of Dues of respective banks being assigned to Invent AssetsSecuritization and Reconstruction Pvt Ltd.

ix) According to the records of the company the company has neither raised any moniesby way of Initial Public Offer or Further Public Offer nor has the company obtained anyterm loan. Hence the comments under the clause are not called for.

x) Based on the audit procedures performed and representation obtained from managementwe report that no case of material fraud by the Company or on the Company by its officersand employee has been noticed or reported for the year under audit.

xi) The Company has provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V of the CompaniesAct 2013.

xii) In our opinion and to the best of our information and according to theexplanations provided by the management we are of the opinion that the company is not anidhi company. Hence in our opinion the requirements of clause (xii) of Paragraph 3 ofthe Order do not apply to the Company.

xiii) The Company has complied with Section 177 and 188 of Companies Act 2013 inrespect of transactions with the related parties and relevant details have been disclosedin the financial statements as required by the applicable accounting standards.

xiv) The Company has not made any preferential allotment or private placement of sharesor full or convertible debentures during the year under review. Hence the provisions ofClause (xiv) of paragraph 3 of the Order are not applicable to the Company.

xv) The Company has not entered into any non-cash transactions with directors orpersons connected with him. Therefore the provisions of Clause

(xv) of paragraph 3 of the Order are 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. Therefore the provisions of Clause

(xvi) of paragraph 3 of the Order are not applicable to the Company.

For Talati & Talati
Chartered Accountants
(Firm Reg. No: 110758W)
Umesh Talati
Place: Ahmedabad Partner
Date: May 27 2017 Mem No. : 034834