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Tata Sponge Iron Ltd.

BSE: 513010 Sector: Metals & Mining
NSE: TATASPONGE ISIN Code: INE674A01014
BSE 12:01 | 21 Aug 881.50 -0.50
(-0.06%)
OPEN

885.00

HIGH

887.60

LOW

878.60

NSE 11:49 | 21 Aug 880.75 -1.50
(-0.17%)
OPEN

884.70

HIGH

888.20

LOW

878.05

OPEN 885.00
PREVIOUS CLOSE 882.00
VOLUME 2608
52-Week high 1248.00
52-Week low 788.00
P/E 8.71
Mkt Cap.(Rs cr) 1,358
Buy Price 880.15
Buy Qty 43.00
Sell Price 882.40
Sell Qty 16.00
OPEN 885.00
CLOSE 882.00
VOLUME 2608
52-Week high 1248.00
52-Week low 788.00
P/E 8.71
Mkt Cap.(Rs cr) 1,358
Buy Price 880.15
Buy Qty 43.00
Sell Price 882.40
Sell Qty 16.00

Tata Sponge Iron Ltd. (TATASPONGE) - Auditors Report

Company auditors report

To the Members of Tata Sponge Iron Limited

Report on the Standalone Indian Accounting Standards (Ind AS) FinancialStatements

1. We have audited the accompanying standalone Ind AS financialstatements of Tata Sponge Iron Limited ("the Company") which comprise theBalance Sheet as at March 31 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Ind AS FinancialStatements

2. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind AS financial statements to give a true and fairview of the financial position financial performance (including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified in the Companies (Indian Accounting Standards) Rules 2015 (as amended) underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone Ind AS financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone IndAS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rulesmade thereunder including the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade thereunder.

5. We conducted our audit of the standalone Ind AS financial statementsin accordance with the Standards on Auditing specified under Section 143(10) of the Actand other applicable authoritative pronouncements issued by the Institute of CharteredAccountants of India. Those Standards and pronouncements require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind ASfinancial 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 overallpresentation of the standalone Ind AS financial statements.

7. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.

Opinion

8. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone Ind AS financial statements givethe information required by the Act in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2018 and its total comprehensive income(comprising of profit and other comprehensive income) its cash flows and the changes inequity for the year ended on that date.

Other Matter

9. The standalone Ind AS financial statements of the Company for theyear ended March 31 2017 were audited by another firm of chartered accountants under theCompanies Act 2013 who vide their report dated April 26 2017 expressed an unmodifiedopinion on those financial statements. Our opinion is not qualified in respect of thismatter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act ("the Order") and on the basis of such checks of the books and recordsof the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (includingother comprehensive income) the Cash Flow Statement and the Statement of Changes inEquity dealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Indian Accounting Standards specified under Section 133 of theAct.

(e) On the basis of the written representations received from thedirectors as on April 1 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2018 from being appointed as a director in termsof Section 164(2) of the Act. (f) With respect to the adequacy of the internal financialcontrols with reference to financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in Annexure A.

(g) With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our knowledge and belief and according tothe information and explanations given to us:

i. The Company has disclosed the impact if any of pending litigationsas at March 31 2018 on its financial position in its standalone Ind AS financialstatements – Refer Note 30 to the standalone Ind AS financial statements; ii. TheCompany did not have any material foreseeable losses on long-term contracts includingderivative contracts as at March 31 2018. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company during the year ended March 31 2018 except for amounts aggregating toRs 4.28 lakhs which according to the information and explanations provided by themanagement is held in abeyance due to pending legal cases. (Refer Note 42 to thestandalone Ind AS financial statements). iv. The reporting on disclosures relating toSpecified Bank Notes is not applicable to the Company for the year ended March 31 2018.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E300009

Pinaki Chowdhury

Partner Membership No.: 057572

Kolkata April 17 2018

Annexure A to Independent Auditors' Report

Referred to in paragraph 11(f) of the Independent Auditors' Reportof even date to the members of Tata Sponge Iron Limited on the standalone Ind AS financialstatements for the year ended March 31 2018

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financialreporting of Tata Sponge Iron Limited ("the Company") as of March 31 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system over financial reporting andtheir operating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone Ind AS financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone Ind AS financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

7. Because of the inherent limitations of internal financial controlsover financial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at March 312018 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E300009

Pinaki Chowdhury

Partner Membership No.: 057572

Kolkata April 17 2018

Annexure B to Independent Auditors' Report

Referred to in paragraph 10 of the Independent Auditors' Report ofeven date to the members of Tata Sponge Iron Limited on the standalone Ind AS financialstatements as of and for the year ended March 31 2018

i. (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets. (b) The fixedassets of the Company have been physically verified by the Management during the year andno material discrepancies have been noticed on such verification. In our opinion thefrequency of verification is reasonable.

(c) The title deeds of immovable properties as disclosed in Note 3 onproperty plant and equipment to the Standalone Ind AS financial statements are held inthe name of the Company. ii. The physical verification of inventory have been conducted atreasonable intervals by the Management during the year. The discrepancies noticed onphysical verification of inventory as compared to book of records were not material. iii.The Company has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company. iv. In our opinion andaccording to the information and explanations given to us the Company has complied withthe provisions of Section 185 and 186 of the Companies Act 2013 in respect of theinvestments made and guarantees and securities provided by it as applicable. v. TheCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the Rules framed there under to the extent notified. vi.Pursuant to the rules made by the Central Government of India the Company is required tomaintain cost records as specified under Section 148(1) of the Act in respect of itsproducts.

We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained.

We have not however made a detailed examination of the records with aview to determine whether they are accurate or complete. vii. (a) According to theinformation and explanations given to us and the records of the Company examined by us inour opinion the Company is regular in depositing the undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax except for arrearsof Rs. 518.13 lacs outstanding for a period of more than six months as on March 31 2018service tax duty of customs duty of excise value added tax cess goods and service taxwith effect from July 1 2017 and other material statutory dues as applicable with theappropriate authorities.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of service tax and duty of exciseas at March 31 2018 which have not been deposited on account of any dispute. Theparticulars of dues of Income Tax Sales tax Duty of customs value added tax as at March31 2018 which have not been deposited on account of a dispute are as follows

Amount

Period to which the

Forum where the dispute is

Name of the statute

Nature of dues

(Rs. in lacs)

amount relates

pending

2014-15

Commissioner of Income

Income Tax Act 1961

Income Tax

282.10

2015-16

Tax (Appeals)

66.71

2005-06

High Court of Orissa

1987-88

Central Sales Tax Act 1957

Central Sales Tax

Deputy Commissioner of

6.02

1992-93

Commercial Taxes

1993-94

1992-93

Assistant Commissioner of

2.45

2000-01

Sales Tax

1987-88

Orissa Sales Tax Act1947

Sales Tax

1989-90

Deputy Commissioner of

6.10

1990-91

Commercial Taxes

1988-89

Amount

Period to which the

Forum where the dispute is

Name of the statute

Nature of dues

(Rs. in lacs)

amount relates

pending

Customs Excise and

Customs Act 1962

Customs Duty

3311.05

2012-13

Service Tax Appellete

Tribunal

Commissioner of

7.14

2005-06

Commercial Taxes

Odisha Value Added Tax Act 2004

Value Added Tax

Additional Commissioner

129.89

2006-07

of Commercial Taxes

viii. As the Company does not have any loans or borrowings from anyfinancial institution or bank or Government nor has it issued any debentures as at thebalance sheet date the provisions of Clause 3(viii) of the Order are not applicable tothe Company. ix. The Company has not raised any moneys by way of initial public offerfurther public offer (including debt instruments) and term loans. Accordingly theprovisions of Clause 3(ix) of the Order are not applicable to the Company. x. During thecourse of our examination of the books and records of the Company carried out inaccordance with the generally accepted auditing practices in India and according to theinformation and explanations given to us we have neither come across any instance ofmaterial fraud by the Company or on the Company by its officers or employees noticed orreported during the year nor have we been informed of any such case by the Management.xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany. xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the Standalone Ind AS financialstatements as required under Indian Accounting Standard (Ind AS) 24 Related PartyDisclosures specified under Section 133 of the Act. xiv. The Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under audit. Accordingly the provisions of Clause 3(xiv) ofthe Order are not applicable to the Company. xv. The Company has not entered into any noncash transactions with its directors or persons connected with him. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company. xvi. TheCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicable tothe Company.

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E300009

Pinaki Chowdhury

Partner Membership No.: 057572

Kolkata April 17 2018