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Tata Steel Ltd.

BSE: 500470 Sector: Metals & Mining
NSE: TATASTEEL ISIN Code: INE081A01012
BSE 13:44 | 16 Nov 574.00 -14.65
(-2.49%)
OPEN

589.80

HIGH

590.75

LOW

572.25

NSE 13:34 | 16 Nov 574.55 -14.80
(-2.51%)
OPEN

590.00

HIGH

591.00

LOW

572.10

OPEN 589.80
PREVIOUS CLOSE 588.65
VOLUME 377462
52-Week high 755.12
52-Week low 493.50
P/E 6.62
Mkt Cap.(Rs cr) 64,667
Buy Price 573.95
Buy Qty 136.00
Sell Price 574.20
Sell Qty 115.00
OPEN 589.80
CLOSE 588.65
VOLUME 377462
52-Week high 755.12
52-Week low 493.50
P/E 6.62
Mkt Cap.(Rs cr) 64,667
Buy Price 573.95
Buy Qty 136.00
Sell Price 574.20
Sell Qty 115.00

Tata Steel Ltd. (TATASTEEL) - Auditors Report

Company auditors report

TO THE MEMBERS OF TATA STEEL LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of TataSteel Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

2. 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 standalone Ind AS financial statements to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.

5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 and its total comprehensive income (comprising of profit andother comprehensive income) its cash flows and the changes in equity for the year endedon that date.

Other Matter

9. The standalone Ind AS financial statements of the Company for the year ended March31 2017 were audited by another firm of chartered accountants under the Companies Act2013 who vide their report dated May 16 2017 expressed an unmodified opinion on thosefinancial statements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

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) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule n of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us: i. The Company has disclosed the impact if any of pendinglitigations as at March 31 2018 on its financial position in its standalone Ind ASfinancial statements — Refer Notes 36 and 37 to the standalone Ind AS financialstatements; ii. The Company has long-term contracts including derivative contracts as atMarch 31 2018 for which there were no material foreseeable losses; iii. There has beenno delay in transferring amounts required to be transferred to the Investor Educationand Protection Fund by the Company during the year ended March 31 2018 except for amountsaggregating to Rs. 4.62 crores which according to the information and explanationsprovided by the Management is held in abeyance due to dispute / pending legal cases. iv.The reporting on disclosures relating to Specified Bank Notes is not applicable to theCompany for the year ended March 31 2018.

For Price Waterhouse & Co Chartered Accountants LLP
FirmRegistration Number: 304026E/ E-300009.
Chartered Accountants
Russell I Parera
Mumbai Partner
May 16 2018 Membership Number 042190

Annexure A to the Independent Auditor's Report

Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Tata Steel Limited on the standalone Ind AS financial statements for the yearended March 31 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internal financial controls over financial reporting of TataSteel Limited ("the Company") as of March 31 2018 in conjunction with our auditof the standalone Ind AS financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of the standalone Ind AS financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of thestandalone 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 thestandalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols 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 riskthat the internal financial control over financial reporting may become inadequate becauseof changes in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Price Waterhouse & Co Chartered Accountants LLP
FirmRegistration Number: 304026E/ E-300009.
Chartered Accountants
Russell I Parera
Mumbai Partner
May 16 2018 Membership Number 042190

Annexure B to the Independent Auditor's Report

Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of Tata Steel Limited on the standalone Ind AS financial statements as of and forthe year ended March 31 2018 i. (a) The Company is maintaining proper records showingfull particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification. (c) According to the information and explanations given to us andthe records examined by us the title deeds of immovable properties are held in the nameof the Company except for the following: (i) title deeds to freehold land with grosscarrying amount and net carrying amount of Rs. 60.44 crore and Rs. 60.44 crorerespectively which are held in the name of erstwhile companies which have subsequentlybeen amalgamated with the Company; (ii) title deeds to buildings with gross carryingamount and net carrying amount of Rs. 83.48 crores and Rs. 76.73 crores respectivelywhich are held in the name of erstwhile companies which have subsequently been amalgamatedwith the Company.

(iii) title deeds to freehold land with gross carrying amount and net carrying amountof Rs. 202.67 crores and Rs. 202.67 crores respectively which were not readily available.

(iv) title deeds to buildings with gross carrying amount and net carrying amount of Rs.95.62 crores and Rs. 81.59 crores respectively which were not readily available.

ii. The physical verification of inventory (excluding stocks with third parties) havebeen conducted at reasonable intervals by the management during the year. In respect ofinventory lying with third parties these have substantially been confirmed by them. Inrespect of inventories of stores and spares the management has a verification programmedesigned to cover all the items over a period of three years. The discrepancies noticed onphysical verification of inventory as compared to book records were not material. iii. TheCompany has granted secured/unsecured loans to companies covered in the registermaintained under Section 189 of the Act. The Company has not granted any secured /unsecured loans to any other party as applicable covered in the register maintainedunder Section 189 of the Companies Act 2013. (a) In respect of the aforesaid loans theterms and conditions under which such loans were granted are not prejudicial to theCompany's interest except for two inter corporate deposits made during the yearaggregating to Rs. 7.60 crores placed with a subsidiary company and a joint venturecompany. Maximum amount outstanding during the year was Rs. 67.00 crores and Rs. 0.60crores from the aforesaid subsidiary company and joint venture company respectively. Asthese companies are not going concerns therefore in our opinion these deposits areprejudicial to the Company's interests. (b) In respect of the aforesaid loans theschedule of repayment of principal and payment of interest has been stipulated by theCompany. Except for amounts aggregating Rs. 760.12 crores outstanding towards principaland interest from six subsidiary companies and two joint venture companies the partiesare repaying the principal amounts as stipulated and are also regular in payment ofinterest as applicable. (c) In respect of the aforesaid loans the total amount overduetowards principal and interest for more than ninety days as at March 31 2018 is Rs.648.28 crores. In such instances in our opinion reasonable steps have been taken by theCompany for the recovery of the principal amounts and interest thereon.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made and guarantees and security as applicableprovided by it. v. According to the information and explanations given to us the Companyhas not accepted any deposit during the year. In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofSections 73 74 75 and 76 or any other relevant provisions of the Act and the Rulesframed thereunder to the extent notified with regard to unclaimed deposits asapplicable. According to the information and explanations given to us no order has beenpassed by the Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any Court or any other Tribunal on the Company in respect of the aforesaid deposits.vi. Pursuant to the rules made by the Central Government of India the Company is requiredto maintain 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 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. (a) According to the information and explanations given to us and therecords of the Company examined by us in our opinion the Company is regular indepositing undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax cess goods and service tax with effect from July 1 2017and other materialstatutory dues as applicable with the appropriate authorities other than arrear duesoutstanding for more than six months as at March 31 2018 set out below. We are informedthat the Company has applied for exemption from operations of Employees' State InsuranceAct at some locations. We are also informed that actions taken by the authorities at somelocations to bring the employees of the Company under the Employees' State InsuranceScheme has been contested by the Company and payment has not been made of thecontributions demanded.

The extent of the arrears of statutory dues outstanding as at March 31 2018 for aperiod of more than six months from the date they became payable are as follows:

Name of the statute Nature of dues Amount
(Rs. in crores)
Central Excise Act 1944 Excise Duty 0.14

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of goods and service tax as at March 31 2018which have not been deposited on account of any dispute and the particulars of dues ofincome tax sales tax service tax duty of customs duty of excise value added tax andservice tax as at March 312018 which have not been deposited on account of a dispute areas follows:

Name of Statute Nature of dues Amount (net of payments) Amounts paid (Rs. crore) Period for which dispute relates to Forum where Dispute is pending
(Rs. crore)
Income-tax Act 1961 Income-tax 395.31* 580.28* 1998-1999 2006-2007 Tribunal
2007-2008 2009-2010
2010-2011
0.67 - 2010-2011 Income-tax Officer
Customs Act 1962 Customs Duty 79.67 50.00 2005-2008 Commissioner
3.95 0.07 2002-2003 High Court
Central Excise Act1944 Excise Duty 0.85 - 1983-1985 Assistant Commissioner
246.13 111.47 1989-1990 1994-2002 Commissioner
2003-04 2005-2017
0.18 - 1985-1987 1998-1999 Deputy Commissioner
34.66 0.10 1988-1990 2003-2009 High Court
0.03 0.01 1998-1999 Joint Commissioner
691.45 45.76 1990-1991 1992-1997 Tribunal
1998-2015 2016-17
Sales Tax Laws Sales Tax 26.07 11.30 1973-1974 1977-1979 High Court
1983-1984 1991-1997
2000-2002 2008-2009
57.91 3.97 1977-1978 1980-1981 Tribunal
1983-1985 1987-1988
1989-1999 2000-2001
2003-2005 2009-2012
2013-2015 2016-2017
325.03 18.12 1988-1990 1991-1992 Commissioner
1993-1994 2001-2005
2006-2014
0.03 0.03 2001-2002 Joint Commissioner
164.03 2.31 1975-1976 1983-1988 Deputy Commissioner
1994-1995 1997-2006
2007-2009 2013-2015
28.15 2.47 2002-2003 2012-2015 Additional Commissioner
8.79 2.67 1973-1974 1980-1993 Assistant Commissioner
1994-1997 2001-2002
2003-2005 2008-2009
Value Added Tax Laws Value Added Tax 252.84 1.07 1994-1996 2007-2008 High Court
2012-2016
21.30 3.30 2005-2011 2012-2015 Tribunal
103.93 1.21 2005-2015 2016-2017 Commissioner
119.56 4.60 2010-2011 2012-2014 Joint Commissioner
15.48 1.71 2005-2011 2014-2015 Deputy Commissioner
0.89 0.05 2012-2015 Additional Commissioner
0.12 0.06 2005-2006 2008-2009 Assistant Commissioner
2013-2014 2016-2017
Finance Act 1994 Service Tax 0.04 0.001 2013-2014 2015-2016 Assistant Commissioner
5.56 0.12 2004-2018 Commissioner
0.97 - 2009-2010 Deputy Commissioner
1291.87 10.17 2004-2017 Tribunal

*excluding net excess payments/adjustments for the years 2008-2009 2011-2012 and2012-2013 aggregating Rs. 282.86 crores.

The following matter has been decided in favour of the Company although the departmenthas preferred appeal at higher levels:

Name of Statute Nature of dues Amount (net of payments) Period for which dispute relates to Forum where Dispute is pending
(Rs. crore)
Central Excise Act1944 Excise Duty 235.48 2004-2005 Supreme Court
0.64 2013-2014 Tribunal

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders asapplicable as at the balance sheet date. ix. In our opinion and according to theexplanations given to us money raised by way of further public offer (rights issue)during the year and the term loans have been applied for the purposes for which they wereobtained. Out of the total money received by way of rights issue during the year amountsaggregating

Rs. 2614.29 crores are lying in cash and cash equivalents as at year end pendingeventual utilisation for specific purposes as per the terms and conditions of the rightsissue. x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement. xi. The Company has paid/provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act. 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 in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone Ind AS financial statements as requiredunder Indian Accounting Standard 24 Related Party Disclosures specified under Section 133of the Act. xiv. The Company has not made any preferential allotment or private placementof shares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany. xv. The Company has not entered into any non cash transactions with its directorsor persons connected with him. Accordingly the provisions of Clause 3(xv) of the Orderare not applicable to the Company. xvi. The Company is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions ofClause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Russell I Parera
Mumbai Partner
May 16 2018 Membership Number 042190