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SAL Steel Ltd.की ऑडीटर रिपोर्ट
Mar 31, 2025
We have audited the accompanying standalone IND AS financial statements of S.A.L. STEEL LIMITED (the "Company"), which comprise
the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of
Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of material accounting policies and
other explanatory information (hereinafter referred to as the "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter
described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information
required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,
2025 and its losses, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. For the Year ended on 31st March, 2025, the company has not made provision for Electricity Duty in the books of accounts
had the company made the provision for Electricity Duty for the year ended on 31st March, 2025, the Loss for the year
would have been higher by Rs 314.28 lakhs and current liabilities would have been higher to that extent. (Refer to Note
no. 41 of Standalone IND AS Financial Statements).
2. For the year ended on 31st March, 2025, the company has not made Impairment of entire Capital Work in Progress. Had
the Company made Impairment of entire Capital Work in Progress for the year ended on 31st March, 2025, the Loss for
the year would have been higher by Rs 100.94 lakhs and Capital Work in Progress would have been lower to that extent.
(Refer to Note No. 39 of Standalone IND AS Financial Statements).
We conducted our audit in accordance with the Standards on Auditing ("SA" s) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial
Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of
Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial
statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our qualified opinion on the standalone IND AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone IND AS
financial statements of the current period. These matters were addressed in the context of our audit of the standalone IND AS financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters:
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Description of Key audit Matter |
Our response and results |
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REVENUE (Refer note 23) to the standalone Ind AS Revenue of the company comprises of sale of Sponge Iron, Revenue recognition is a significant audit risk across |
Our key audit procedures to assess the recognition of revenue on sale ⢠We assessed the appropriateness of the Company''s revenue ⢠We obtained an understanding of process and assessed the design, ⢠We also tested, on a sample basis, whether specific revenue We inspected key customer contracts/ purchase orders to identify |
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Litigations and claims (Refer note 31A) to the standalone Ind AS financial statements) In normal course of business, financial exposures may arise We have considered Litigations and claims; a Key Audit |
Our audit procedures, inter alia, included following: - Discussed disputed litigation matters with the company''s - Evaluated the management''s judgment of tax risks, estimates - Critically assessed the entity''s assumptions and estimates in Conclusion: Based on the procedures described above, we did not find any |
Emphasis of Matter
1. The Company has not complied with the disclosure requirements of segment reporting as per Indian Accounting
Standard - 108 ''Operating Segments''. However, there is no impact on the financial results due to the said non-disclosure.
(Refer Note No.32 of notes forming part of Standalone Ind AS financial statement)
2. During the Year under review, the company has written back creditors amounting to Rs 44.71 lakhs, in view of the
management the same is not payable, accordingly they have been written back and credited to statement of Profit
and loss account as Other Income for the year ended on 31st March, 2025. (Refer to Note No.42 of Standalone IND AS
Financial Statements).
3. We draw attention to the matter that company has not provided details w.r.t MSME Vendors as prescribed under MSME
Act, 2006 which states as specified Companies( Furnishing of information about payment to micro and small enterprise
suppliers) Order 2019.However, in the absence of the above mentioned details we are unable to comment on the non¬
recognition of any provisioning to be made on account of interest on balance outstanding to MSME vendors if any
,required at the balance sheet date 31.03.2025. (Refer to Note No. 40 of Standalone IND AS Financial Statements).
4. The balance confirmation from the suppliers, and customers have been called for, but the same are awaited till the date
of audit. Thus, the balances of receivables, advance from customers and trade payables have been taken as per the books
of accounts submitted by the company and are subject to confirmation from the respective parties. (Refer to Note No. 37
of Standalone IND AS Financial Statements).
5. In order to buy peace of mind and to put an end to the litigation, the Company has entered into a Settlement Agreement
with Shreenidhi Trading Company a creditor who had initiated legal proceedings against the Company. The Company has
agreed to pay a settlement amount of Rs 510.00 Lakhs, to the said alleged creditor against the principal outstanding of Rs
94.41 Lakhs. Thus, the balance amount of Rs. 415.59 Lakhs is shown as "Exceptional Item" in the statement of profit and
loss for the year ended on 31st March 2025. (Refer Note No 46 of notes forming part of Standalone Financial Statements)
Our opinion is not modified on the above matter.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included
in the Annual Report, but does not include the standalone IND AS financial statements and our auditor''s report thereon.
Our opinion on the standalone IND AS financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone IND AS financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone IND AS Financial
Statements
The statement has been prepared on the basis of Standalone Ind AS annual financial statement.
The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and
fair view of the net profit and other comprehensive income of the Company and other financial information in accordance with
the applicable accounting standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other
accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility
also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.
In preparing the standalone Ind AS financial statements, Board of Directors is responsible for assessing the Company''s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone IND AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone IND AS financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone IND
AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone IND AS financial statements, including the disclosures,
and whether the standalone IND AS financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by section 197(16) of the Act as amended, in our Opinion and to the best our information and according to the
explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions
of section 197 of the Act read with Schedule V of the Act.
2. As required by the Companies (Auditor''s Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section
143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
3. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and except for the matters described in the Basis for Qualified Opinion, obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) Except for the possible effects of the matters described in the Basis for Qualified opinion paragraph above and for the
matter stated in paragraph 3(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014,
in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books.
c) The standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income,
standalone Statement of Changes in Equity and the standalone Statement of Cash Flows dealt with by this Report are in
agreement with the books of account.
d) Except for the possible effects of the matter described in Basis of Qualified opinion paragraph, in our opinion, the aforesaid
standalone IND AS Financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.
e) The matters described in the paragraphs on Basis for Qualified Opinion and Emphasis of Matters, in our opinion it may have
an adverse effect on the functioning of the company.
f) On the basis of the written representations received from the directors as on March 31,2025 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of Section
164(2) of the Act.
g) With respect to the adequacy of the internal financial controls with reference to standalone IND AS Financial Statements of
the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report
expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls
with reference to standalone Financial Statements.
h) The Modification relating to the maintenance of accounts & other matters connected therewith, are stated in Basis of
Qualified Opinion paragraph and also stated in paragraph 3(b) above on reporting under section 143(3)(6) of the act, and
also stated at paragraph 3(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
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 the standalone Ind AS Financial
Statements (Refer Note No. 31-A to the Standalone Ind AS Financial Statements.)
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses.
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company.
(iv) (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Company to or in any other person or entity,
including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise,
that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been received by the Company from any person or entity, including
foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries;
c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii)
of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
(v) The company has not declared and paid any Interim divided nor has proposed any final dividend during the previous
year, and hence the question of Compliance and applicability of Section 123 of the Companies Act does not arise.
(vi) The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1 April 2023
Based on our examination, which included test checks, the Company has used accounting software for maintaining its
books of account for the financial year ended March 31,2025 which has a feature of recording audit trail (edit log) facility
and the same operated throughout the year for all relevant transaction recorded in the software. Further, during the
course of our audit, we did not come across any instances of audit trail feature being tampered. The audit trail has been
preserved by the Company as per the statutory requirements for record retention.
However, in respect of Books of Accounts maintained at factory, the accounting software does not have the feature of
edit log under the year under review and the same was not operated throughout the year for all relevant transactions
recorded in the software, hence question of preservation of back up of audit trail does not arise.
For, Parikh & Majmudar
Chartered Accountants
FRN - 107525W
[CA SATWIK DURKAL]
PARTNER
Place : Ahmedabad Membership No. 107628
Date : 30-05-2025 UDIN: 25107628BMHGBN3520
Mar 31, 2024
S.A.L. STEEL LIMITED
REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS Qualified Opinion
We have audited the accompanying standalone IND AS financial statements of S.A.L. STEEL LIMITED (the "Company"), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of material accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024 and its Profits, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
1. For the Year ended on 31st March, 2024, the company has not made provision for Electricity Duty in the books of accounts had the company made the provision for Electricity Duty for the year ended on 31st March, 2024, the Profit for the year would have been lower by '' 296.91 lakhs and current liabilities would have been higher to that extent. (Refer to Note no. 41 of Standalone IND AS Financial Statements).
2. For the year ended on 31st March, 2024, the company has not made Impairment of entire Capital Work in Progress. Had the Company made Impairment of entire Capital Work in Progress for the year ended on 31st March, 2024, the Profit for the year would have been lower by '' 100.94 lakhs and Capital Work in Progress would have been lower to that extent. (Refer to Note No. 39 of Standalone IND AS Financial Statements).
We conducted our audit in accordance with the Standards on Auditing ("SA" s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our qualified opinion on the standalone IND AS financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone IND AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone IND AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key Audit Matters: |
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Description of Key audit Matter |
Our response and results |
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REVENUE (Refer note 63) to the standalone Ind AS financial statements) Revenue of the compa ny comprises of sale of Sponge Iron, Ferro alloys as well as sale of power. The company sells its products directly to the end use customers. Revenue recognition is a significant audit risk across the company. Specifically there is a risk that revenue is recognized on sale of goods before the control in the goods is transferred. |
Our key audit procedures to assess the recognition of revenue on sale of goods included the following: ⢠We assessed the appropriateness of the Company''s revenue recognition policies, including those related to discounts and incentives; ⢠We obtained an understanding of process and assessed the design, implementation and operating effectiveness of management''s key internal controls in relation to revenue recognition from sale of goods. We also tested the Company''s controls over timing of revenue recognition; ⢠We also tested, on a sample basis, whether specific revenue transactions around the year end had been recognized in the appropriate period on the basis of the terms of sale of the contract, particularly with reference to the transfer of control in the goods in question with regard to the year end transactions. We inspected key customer contracts/ purchase orders to identify terms and conditions related to acceptance of goods and the right to return and assessing the Company''s revenue recognition policies with reference to the requirements of the prevailing accounting standards; |
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Litigations and claims (Refer note 31A) to the standalone Ind AS financial statements) The cases are pending with multiple tax authorities like Service tax, VAT, Excise. & customs and there are claims against the company which have not been acknowledged as debt by the company. In normal course of business, financial exposures may arise from pending proceedings and from claims of the customers not acknowledged as debt by the company. Whether a claim needs to be recognized as liability or disclosed as contingent liability in the standalone Ind AS financial statements is dependent on a number of significant assumptions and judgments. The amounts involved are potentially significant and determining the amount, if any, to be recognized or disclosed in the standalone Ind AS financial statements, is inherently subjective. We have considered Litigations and claims; a Key Audit Matter as it requires significant management judgement, including accounting estimates that involves high estimation uncertainty. |
Our audit procedures, inter alia, included following: - Discussed disputed litigation matters with the company''s management. - Evaluated the management''s judgment of tax risks, estimates of tax exposures, other claims and contingencies. Past and current experience with the tax authorities and management''s correspondence/response including on the claims lodged by customers were used to assess the appropriateness of management''s best estimate of the most likely outcome of each uncertain contingent liability. - Critically assessed the entity''s assumptions and estimates in respect of claims, included in the contingent liabilities disclosed in the standalone Ind AS financial statements. Also, assessed the probability of negative result of litigation and the reliability of estimates of related obligations. Conclusion: Based on the procedures described above, we did not find any material exceptions to the management''s assertions and treatment, presentation & disclosure of the subject matter in the standalone Ind AS financial statements. |
1. The Company has not complied with the disclosure requirements of segment reporting as per Indian Accounting Standard - 108 ''Operating Segments''. However, there is no impact on the financial results due to the said non-disclosure. (Refer Note No.32 of notes forming part of Standalone Ind AS financial statement)
2. During the Year under review, the company has written back creditors amounting to '' 124.61 lakhs, in view of the management the same is not payable, accordingly they have been written back and credited to statement of Profit and loss account as Other Income. (Refer to Note No.42 of Standalone IND AS Financial Statements).
3. We draw attention to the matter that company has not provided details w.r.t MSME Vendors as prescribed under MSME Act, 2006 which states as specified Companies( Furnishing of information about payment to micro and small enterprise suppliers) Order 2019.However, in the absence of the above mentioned details we are unable to comment on the nonrecognition of any provisioning to be made on account of interest on balance outstanding to MSME vendors if any ,required at the balance sheet date 31.03.2024. (Refer to Note No. 40 of Standalone IND AS Financial Statements).
4. The balance confirmation from the suppliers, and customers have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, advance from customers and trade payables have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties. (Refer to Note No. 37 of Standalone IND AS Financial Statements).
5. Refer Note No 46 of notes forming part of Standalone Financial Statements, regarding non availing of Insurance on the Fixed assets of the Company.
Our opinion is not modified on the above matter.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone IND AS financial statements and our auditor''s report thereon.
Our opinion on the standalone IND AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone IND AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone IND AS Financial Statements
The statement has been prepared on the basis of Standalone Ind AS annual financial statement.
The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and fair view of the net profit and other comprehensive income of the Company and other financial information in accordance with the applicable accounting standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.
In preparing the standalone Ind AS financial statements, Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone IND AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone IND AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone IND AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone IND AS financial statements, including the disclosures, and whether the standalone IND AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by section 197(16) of the Act as amended, in our Opinion and to the best our information and according to the explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act read with Schedule V of the Act.
2. As required by the Companies (Auditor''s Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
3. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and except for the matters described in the Basis for Qualified Opinion, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) Except for the possible effects of the matters described in the Basis for Qualified opinion paragraph above and for the matter stated in paragraph 3(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income, standalone Statement of Changes in Equity and the standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) Except for the possible effects of the matter described in Basis of Qualified opinion paragraph, in our opinion, the aforesaid standalone IND AS Financial statements comply with the Indian Accounting Standards specified under section 133 of the Act.
e) The matters described in the paragraphs on Basis for Qualified Opinion and Emphasis of Matters, in our opinion it may have an adverse effect on the functioning of the company.
f) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2024 from being appointed as a director in terms of Section 164(2) of the Act.
g) With respect to the adequacy of the internal financial controls with reference to standalone IND AS Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to standalone Financial Statements.
h) The Modification relating to the maintenance of accounts & other matters connected therewith, are stated in Basis of Qualified Opinion paragraph and also stated in paragraph 3(b) above on reporting under section 143(3)(6) of the act, and also stated at paragraph 3(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
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 the standalone Ind AS Financial Statements (Refer Note No. 31-A to the Standalone Ind AS Financial Statements.)
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(iv) (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
(v) The company has not declared and paid any Interim divided nor has proposed any final dividend during the previous year, and hence the question of Compliance and applicability of Section 123 of the Companies Act does not arise.
(vi) The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1 April 2023
Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31,2024 which has a feature of recording audit trail (edit log) facility and the same operated throughout the year for all relevant transaction recorded in the software. Further, during the course of our audit, we did not come across any instances of audit trail feature being tampered.
However, in respect of Books of Accounts maintained at factory, the accounting software does not have the feature of edit log under the year under review and the same was not operated throughout the year for all relevant transactions recorded in the software.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.
For, Parikh & Majmudar
Chartered Accountants FRN - 107525W
[CA SATWIK DURKAL]
PARTNER
Place : Ahmedabad Membership No. 107628
Date : 30-05-2024 UDIN: 24107628BJZWRT2943
Mar 31, 2023
s.a.l. steel limited
report on the audit of the standalone ind as financial statements
Opinion
We have audited the accompanying standalone IND AS financial statements of S.a.l. STEEL LIMITED (the "Company"), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023 and its Profits, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone IND AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone IND AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone IND AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters:
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Description of Key audit Matter |
Our response and results |
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REVENUE (Refer note 45) to the standalone Ind AS financial statements) Revenue of the company comprises of sale of Sponge Iron, Ferro alloys as well as sale of power. The company sells its products directly to the end use customers. Revenue recognition is a significant audit risk across the company. Specifically there is a risk that revenue is recognized on sale of goods before the control in the goods is transferred. |
Our key audit procedures to assess the recognition of revenue on sale of goods included the following: ⢠We assessed the appropriateness of the Company''s revenue recognition policies, including those related to discounts and incentives; ⢠We obtained an understanding of process and assessed the design, implementation and operating effectiveness of management''s key internal controls in relation to revenue recognition from sale of goods. We also tested the Company''s controls over timing of revenue recognition; ⢠We also tested, on a sample basis, whether specific revenue transactions around the year end had been recognized in the appropriate period on the basis of the terms of sale of the contract, particularly with reference to the transfer of control in the goods in question with regard to the year end transactions. We inspected key customer contracts/ purchase orders to identify terms and conditions related to acceptance of goods and the right to return and assessing the Company''s revenue recognition policies with reference to the requirements of the prevailing accounting standards; |
|
Litigations and claims |
Our audit procedures, inter alia, included following: |
|
(Refer note 31A) to the standalone Ind AS financial |
- Discussed disputed litigation matters with the |
|
statements) |
company''s management. |
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The cases are pending with multiple tax authorities like |
- Evaluated the management''s judgment of tax risks, estimates |
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Service tax, VAT, Excise. & customs and there are claims |
of tax exposures, other claims and contingencies. Past and |
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against the company which have not been acknowledged |
current experience with the tax authorities and management''s |
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as debt by the company. |
correspondence/response including on the claims lodged |
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In normal course of business, financial exposures may |
by customers were used to assess the appropriateness of |
|
arise from pending proceedings and from claims of the |
management''s best estimate of the most likely outcome of each |
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customers not acknowledged as debt by the company. |
uncertain contingent liability. |
|
Whether a claim needs to be recognized as liability or |
- Critically assessed the entity''s assumptions and estimates in |
|
disclosed as contingent liability in the standalone Ind AS |
respect of claims, included in the contingent liabilities disclosed |
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financial statements is dependent on a number of significant |
in the standalone Ind AS financial statements. Also, assessed the |
|
assumptions and judgments. The amounts involved are |
probability of negative result of litigation and the reliability of |
|
potentially significant and determining the amount, if any, |
estimates of related obligations. |
|
to be recognized or disclosed in the standalone Ind AS |
Conclusion: |
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financial statements, is inherently subjective. |
Based on the procedures described above, we did not find any |
|
We have considered Litigations and claims; a Key Audit |
material exceptions to the management''s assertions and treatment, |
|
Matter as it requires significant management judgement, |
presentation & disclosure of the subject matter in the standalone Ind |
|
including accounting estimates that involves high estimation uncertainty. |
AS financial statements. |
Emphasis of Matter
1. Financial statements describes about the Non disclosure of Reportable Segments as required under Indian Accounting Standard - 108 ''Operating Segments'' As IND AS 108 Operating Segments mandates the disclosure requirements there is no impact on the financial results due to non-disclosure. (Refer Note No 32 of notes forming part of Standalone Ind AS financial statement) Our opinion is not modified on the above matter.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone IND AS financial statements and our auditor''s report thereon.
Our opinion on the standalone IND AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone IND AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone IND AS Financial Statements
The statement has been prepared on the basis of Standalone Ind AS annual financial statement.
The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and fair view of the net profit and other comprehensive income of the Company and other financial information in accordance with the applicable accounting standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.
In preparing the standalone Ind AS financial statements, Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone IND AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone IND AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone IND AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone IND AS financial statements, including the disclosures, and whether the standalone IND AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by section 197(16) of the Act as amended , In our Opinion and to the best our information and according to the explanations given to us ,the remuneration paid by the company to its directors during the year is in accordance with the provisions of section 197 of the Act.
2. As required by the Companies (Auditor''s Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
3. As required by Section 143(3) of the Act, based on our audit we report 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.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income, standalone Statement of Changes in Equity and the standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone IND AS financial statements comply with the IND AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f) 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 "Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to standalone Financial Statements.
g) 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 the standalone Ind AS Financial Statements (Refer Note No. 31-A to the Standalone Ind AS Financial Statements.
(ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
(iv) (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
(v) The company has not declared and paid any Interim divided nor has proposed any final dividend during the previous year ,and hence the question of Compliance and applicability of Section 123 of the Companies Act does not arise.
(vi) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
For, Parikh & Majmudar
Chartered Accountants FRN - 107525W
[ca satwik durkal]
PARTNER
Place: Ahmedabad Membership No. 107628
Date: 29-05-2023 UDIN: 23107628BHAMTK2770
Mar 31, 2018
Report on the Financial Statements
We have audited the accompanying Ind AS Financial Statements of M/s SAL STEEL LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, (including the statement of Other Comprehensive Income) ,the Statement of Cash flows, the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information. (herein after referred to as â Ind AS financial statementsâ).
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these 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 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, and other accounting principles generally accepted in India.
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 Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Ind AS Financial Statements based on 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 of the Ind AS financial statements in accordance with the Standards on Auditing, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Financial Statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the 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 Companyâs Directors, as well as evaluating the overall presentation of the Ind AS Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Ind AS Financial Statements.
BASIS OF QUALIFIED OPINION
1. Management is of the view that they do not anticipate execution of its ongoing capital projects. However, the Company has not made adequate provision towards recovery of advances for the said capital projects for the amount of Rs.9,12,32,064/- which are currently shown under Long term loans and advances. The consequential impact of adjustment. if any, on the actual realization of said advances on the financial results is currently not ascertainable. Therefore, we are unable to comment on its consequential financial impact, if any, on the financial statements. (Refer Note No 35 - of Notes forming Part of IND AS Financial statement)
2. The Company has not assessed the impact of Effective Interest Method to the finance cost as per the requirement of lnd AS 109 âFinancial Instrumentsâ and hence, the effect of the same, if any, on the financial results is not identifiable therefore, we are unable to comment upon its impact on the Financial results for the year ended 31st March, 2018. (Refer Note No 37-of Notes forming Part of IND AS Financial statement)
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph the aforesaid 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 Profits , total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
OTHER MATTER
The Comparative financial information of the Company for the year ended 31st March 17 and the transition date opening -- balance sheet as at 1 April, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by predecessor auditors and their reports for the years ended 31 March 2017 and 31 March 2016 dated 27th May 2017 and 30th May,2016 respectively expressed an unmodified opinion on those financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of these matters.
EMPHASIS MATTER
1. Note 31 to the IND AS financial Statements of the Company which states that the Companyâs current liabilities exceeded its current assets as at the previous year balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Companyâs ability to continue as a going concern. However, considering the profit earned by the company for the year ended on 31st March 2018 and considering the view of the management, the financial results of the Company have been prepared on a âgoing concern basisâ.
2. Note 32 to the IND AS financial statements which describes about the Non disclosure of Reportable Segments as required under Indian Accounting Standard - 108 âOperating Segmentsâ. As IND AS 108 Operating Segments mandates the disclosure requirements there is no impact on the financial results due to non disclosure.
3. Note no 40 to the Financial statements about the settlement agreement entered in to by the company with effect from 22nd February 2018 for the entire dues in respect of various facilities and assistance provided by Union bank of India,State Bank of Saurashtra, State Bank of India and State Bank of Hyderabad which is now assigned to Invent Assets Securitization & Reconstruction Pvt. Ltd. The company has accounted for the Waiver of Interest portion (as per the books of the company) as Income in the statement of Profit and loss.The said agreements provides for the settlement of entire dues in respect of financial assistance and facilities with the underlying Securities for the payment of Rs 18051.50 lacs towards full and final settlement against the total liability (Principal and Interest) of Rs 24430 lacs resulting in to the waiver of liability (Principal and Interest as per the books of the company ) for the amount of Rs 6378.26 lacs. The said waiver of liability (Interest) for the amount of Rs 6378.26 has been shown as income in the Statement of Profit and loss and has been reflected as an Exceptional Item in the Statement of Profit and loss for the year ended on 31st March 2018.
4. Refer Note 42 to the notes forming part of financial statements which mentions about the Order of Honâble National Company Law Tribunal (NCLT), Ahmedabad Bench dated 6th Sep, 2017 [C P (IB) no. 94/9/NCLT/AHM/2017] which had admitted the company under Corporate Insolvency Resolution Process (CIRP) under section 9(5) (i) of the Insolvency and Bankruptcy Code, 2016 and accordingly appointed Interim Resolution Professional (IRP).However, on the basis of the records produced before us, and as explained to us,the promoters of the company have entered in to a settlement with operational creditor who had filed application before Honâble NCLT,Ahmedabad and obtained no objection from other operational creditors as well as financial creditors and moved a petition under Article 142 of the Constitution of India before the Honâble Supreme Court of India, New Delhi. As per the order dated 10th January 2018 of the Honâble Supreme court of India, the order passed by the Honâble NCLT, Ahmedabad dated 06th September,2017 has been set aside and accordingly the CIRP proceedings have been effectively discontinued and powers of the Board of Directors of the Company have been reinstated.
5. Attention is invited to Note 41 of the Financial Statements which states that the balance confirmation from the suppliers, customers as well as to various loans or advances given have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, trade payables as well as loans and advances have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties
6. Attention is invited to Note 42 of the Financial Statements In view of the fact that the company against whom an application for Corporate Insolvency Resolution Process (CIRP) has been admitted under the Insolvency & Bankruptcy Code 2016 vide order of the National Company Law Tribunal Ahmedabad dated 06th Septemeber,2017 [CP(IB) No.94/9/NCLT/AHM/2017] u/s 9 of the IBC 2016 and in line with the press release of the CBDT dated 06th Janudary,2018, while computing the liability of MAT u/s 115JB of the Income Tax Act the amount of total loss brought forward (including unabsorbed depreciation) has been allowed to be reduced from the book profit for the year under review.
Our opinion is not qualified on the above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure-âAâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and, except for the matters described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) Except for the possible effects of the matter 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 it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) The matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
(e) In our opinion, the aforesaid Ind AS Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant Rules issued there under.
(f) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(g) 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 âAnnexure Bâ.
(h) With respect to the other matters to be included in the Auditorâs 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 Financial Position as referred to in Note no.30 to the Ind AS Financial Statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE A - TO THE INDEPENDENT AUDIT REPORT
REFERRED TO IN PARAGRAPH âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENT OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF S.A.L STEEL LIMITED
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets on the basis of available information.
(b) As explained to us, major portion of fixed assets are physically verified by the management during the year in accordance with a phased program of verification adopted by company. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification.
(c) According to the information and explanation given to us and on the basis of our examination of records of the company, title deeds of the immovable properties held are in the name of the company.
(ii) As explained to us, inventories(excluding goods in transit and goods lying at port) were physically verified by management at reasonable intervals during the year. In our opinion, the frequency of the verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.
(iii) In respect of loans, Secured or unsecured granted by the company to the companies, firms, limited liability partnership or other parties covered in the register maintained u/s 189 of the companies Act, 2013:
According to the information and explanations given to us and on the basis of records produced before us, the company has not granted any loan, secured or unsecured to the companies, limited liability partnership or firms or other parties covered in the register maintained u/s 189 of the companies Act,2013 and hence sub-clause (a)&(b) & (c) of paragraph 3 of companies auditorâs report order 2016 are not applicable to the company.
(iv) According to the information and explanations given to us, the company has not made any investment or given any loans during the year under review Accordingly, paragraph 3(iv) of the Order is not applicable.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government of India for the maintenance of Cost records specified under section 148 of Companies Act 2013 and are of the opinion that prima facie, the prescribed accounts & records have been made and maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) :
(a) According to the information and explanation given to us and on the basis of examination of the records of the Company, amounts deducted/ accured in the books of accounts in respect of undisputed statutory dues including provident fund, ESI C, income-tax, sales tax, Goods & ServI ce Tax, service tax, , duty of customs, duty of excise, value added tax, cess and other statutory dues have not been generally regularly deposited during the year with the appropriate authorities.
According to the information and explanation given to us no undisputed amounts payable in respect of provident fund, ESIC, income-tax, Goods & ServI ce Tax, service tax, , duty of customs, duty of excise, cess and other statutory dues were resaid dues were outstanding as at 31st March,2018 for a period of more than six months from the date of becoming payable except dues for (1) deferred sales tax liability for Rs. 22.63 lacs (2) dues of value added tax (VAT) during the year to the tune of Rs.2240.56 lacs.-
b) On the basis of records produced before us for our verification and according to the information and explanations given to us, the details of disputed dues of Rs.2747.45 lacs/- have not been deposited as on 31st March, 2018 on account of matters pending before the appropriate authorities. The details of which are as follows:
|
Sr. No |
Name of the statue |
Nature of Dues |
Financial year to which it relates |
From where the dispute is pending |
Amount under dispute not yet deposited (Net of Payments ) (in Rs lakhs.) |
|
1 |
Central Excise Act,1994 |
Central Excise Duty |
2006-07 |
Appellate Tribunal Ahmedabad |
5.56 |
|
2 |
Central Excise Act,1994 |
Central Excise Duty |
2008-09 |
Appellate Tribunal Ahmedabad |
10.41 |
|
3 |
Custom Act ,1962 |
Custom Duty |
2011-12 |
Appellate Tribunal Ahmedabad |
50.00 |
|
4 |
Central Excise Act,1994 |
Central Excise Duty |
2012-13 |
Appellate Tribunal Ahmedabad |
449.85 |
|
5 |
Gujarat Value Added Tax Act,2003 |
Value Added Tax |
2006-07 |
Jt. Value Added Tax Commissioner (Appeal) |
365.64 |
|
6 |
Central Excise Act,1994 |
Central Excise Duty |
2008-09 to 2010-2011 |
Supreme Court |
590.14 |
|
7 |
Central Service Tax Act,1994 |
Service Tax Duty |
2009-10 |
Service Tax Commissioner |
25.55 |
|
8 |
Central Excise Act,1994 |
Central Excise Duty |
2005-06 to sep 2014 |
Central Excise Commissioner |
626.28 |
|
10 |
Gujarat Value Added Tax Act,2003 |
Value Added Tax |
2011-12 |
Jt. Value Added Tax Commissioner (Appeal) |
220.12 |
|
11 |
Gujarat Value Added Tax Act,2003 |
Value Added Tax |
2013-14 |
Jt. Value Added Tax Commissioner (Appeal) |
253.70 |
(viii) According to information & explanations given to us, the company has not defaulted in repayment of its dues to Financial Institutions. The company does not have any borrowings from debenture holders, Banks or Government
(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(Xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
ANNEXURE B TO THE INDEPENDENT AUDITORâS REPORT OFF EVEN DATE ON THE FINANCIAL STATEMENTS OF S.A.L STEEL LIMITED
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of M/s S.A.L STEEL LIMITED (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls 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 (âICAIâ). 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 companyâs 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.
Auditorâsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 auditorâs judgment, including the assessment of the risks of material misstatement of the 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
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, to the best of our information & according to the explanations given to us, 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 Parikh & Majmudar
Chartered Accountants
FR No. 107525W
[C.A (Dr) Hiten M. Parikh]
Place: Ahmedabad PARTNER
Date: 30/05/2018 Membership No. 40230
Mar 31, 2016
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 (''the Company), which comprise the Balance sheet as at March 31, 2016, the Statement of profit and loss , the Cash Flow Statement for the year then ended, and a summary of significant accounting 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial statements based on 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 ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the 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 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 financial statements.
Basis for Qualified Opinion
1. Management is of the view that they do not anticipate execution of its ongoing capital projects. However, the Company has not made adequate provision towards recovery of capital advances for the said project for the amount of Rs.9,41,22,080/- which are currently shown under Long term loans and advances. The consequential impact of adjustment, if any, on the actual realization of said advances on the financial statements is currently not ascertainable. Therefore, we are unable to comment on its consequential financial impact, if any, on the financial statements.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above , the aforesaid 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 March 31, 2016 , and its loss for the year ended March 31, 2016 and its cash flows 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 of Reportable Segments as required under Accounting Standard - 17 ''Segment Reporting'', there is 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 fully eroded. The Financial Statements indicates that the Company has incurred a net loss during the current and previous year(s) and, the Company''s current liabilities exceeded its current assets as at the current and previous year balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note 28 to the financial statements.
3. Assignment of dues for various facilities provided to the company by banks to Invent Assets Securitization and Reconstruction Private Limited as per Note 29 to the financial statements.
4. During the year ended 31st March 2016, the company has carried out a techno-economic assessment for the valuations of its Capital Projects to identify the impairment loss and provision thereof, if any. Based on the said techno-economic assessment of the Capital Projects, the Company has provided for Rs. 31,70,24,474/- as per Note 30 to the financial statements The same is in accordance with the notified Accounting Standard 28 on Impairment of asset which states that impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
5. Note 27 to the Financials regarding the company''s reference being filed under section 15(1) of SICA (SP) Act, 1985. The Honorable BIFR vide its letter reference no 3(S-10)/BC/2015 dated 24th August 2015 has registered the reference filed by the 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 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 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 best of 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 Opinion paragraph above , in our opinion, proper books of account as required by law have been 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 and the Cash flow statement dealt 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 Opinion paragraph above , in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) The going concern matter as described in sub-paragraph (2) under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) 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 "Annexure B"; and
g) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and
h) 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, 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 financial statements - Refer Note 18A to the financial statements;
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
Annexure A to Independent Auditors'' Report
The Annexure referred to in Independents Auditor''s Report to the members of the Company on the Standalone financial statement for the year ended 31st March 2016, we report that:
i) In respect of its Fixed Assets:
a) The company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets on the basis of available information.
b) As explained to us, a major portion of the fixed assets has been physically verified by the management during the year in accordance with a phased program of verification adopted by the Company. In our opinion, the frequency of verification is reasonable having regard to the size of the company and nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification.
c) According to the information and explanation given to us and on the basis of our examination of records of the company, the title deeds of the immovable properties held are 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 our opinion, the frequency of the verification is reasonable. The discrepancies noticed on verification between the physical stocks and the book records were not material.
iii) In respect of Loans, Secured or Unsecured granted by the company to companies, firms, Limited liability partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013:
According to the information and explanations given to us and on the basis of the records produced before us, the company has not granted any Loan, Secured or Unsecured to the companies, Limited liability partnership or firms or other parties covered in the register 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 not applicable to the Company.
iv) The Company has complied with the provision of Section 185 & 186 of Companies Act, 2013 with respect of loans, investments and guaranty made.
v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit and hence the provisions of Section 73 to 76 or any other 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 Report Order 2016 are not applicable to the Company. According to the information and explanations given to us, no order has been passed by Company Law Board or National Company 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 to the Rules made by the Central Government for the maintenance of cost records as specified under Section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii) In respect of the Statutory dues:
a) According to the records of the company, undisputed Statutory dues including provident fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues have not 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 the information & explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2016 for a period of more than six months from the date of becoming payable.
b) On the basis of records produced before us for our verification and according to the information and explanations given to us, the details of disputed dues of Rs. 25,73,86,625/- have not been deposited as on 31st March, 2016 on account of matters pending before the appropriate authorities. The details of which are as under:
|
Sr. No. |
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 |
5,55,781 |
|
2 |
Central Excise Act, 1944 |
Central Excise Duty |
2008-09 |
Appellate Tribunal Ahmedabad |
10,41,057 |
|
3 |
Custom Act, 1962 |
Custom Duty |
2011-12 |
Appellate Tribunal Ahmedabad |
2,41,79,202 |
|
4 |
Central Excise Act, 1944 |
Central Excise Duty |
2012-13 |
Appellate Tribunal Ahmedabad |
4,49,84,993 |
|
5 |
Gujarat Value Added Tax Act 2003 |
Value Added Tax |
2006-07 |
Jt. Value Added Tax Commissioner (Appeal) |
3,65,63,595 |
|
6 |
Central Excise Act, 1944 |
Central Excise Duty |
2008-09 to 2010-11 |
Supreme Court |
5,90,14,068 |
|
7 |
Central Service Tax Act, 1994 |
Service Tax Duty |
2009-10 |
Service Tax Commissioner |
25,36,074 |
|
8 |
Central Excise Act, 1944 |
Central Excise Duty |
2005-06 to Sep 2014 |
Central Excise Commissioner |
6,26,28,410 |
|
9. |
Central Excise Act, 1944 |
Central Excise Duty |
2012-13 |
Central Excise Commissioner |
80,11,535 |
|
10. |
Gujarat Value Added Tax Act 2003 |
Value Added Tax |
2011-12 |
Jt. Value Added Tax Commissioner (Appeal) |
1,78,71,910 |
viii) On the basis of the information and explanation given to us and on the basis of 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 31-03-2016 |
Period Of Default ( No of Days) |
|
Union Bank Of India |
Term Loan |
41,71,00,000 |
1 to 1170 |
|
Working Capital |
31,93,91,914 |
1 to 745 |
|
|
Interest |
30,41,67,170 |
1 to 745 |
|
|
State Bank of India |
Term Loan |
35,87,00,000 |
1 to 1170 |
|
Working Capital |
37,35,80,824 |
1 to 944 |
|
|
Interest |
39,41,86,852 |
1 to 944 |
|
|
State Bank of Saurashtra |
Term Loan |
7,00,00,000 |
1 to 1170 |
|
State Bank of Hyderabad |
Term Loan |
4,42,00,000 |
1 to 1170 |
|
Interest |
2,38,72,699 |
1 to 836 |
* The Dues of State bank of Hyderabad, Union Bank of India, State bank of India have been assigned to Invent Assets Securitization and Reconstruction Pvt Ltd respectively w.e.f 1st July 2015, 3rd July 15 and 30th Oct 2015 . However, no agreements have been executed between the company and Invent Assets Securitization and Reconstruction Pvt Ltd as on March 31, 2016. And hence, defaults have been considered towards banks as mentioned above till the date of Dues of respective banks being assigned to Invent Assets Securitization and Reconstruction Pvt Ltd..
ix) According to the records of the company, the company has neither raised any monies by way of Initial Public Offer or Further Public Offer nor has the company obtained any term loan. Hence, the comments under the clause are not called for.
x) Based on the audit procedures performed and representation obtained from management we report that, no case of material fraud by the Company or on the Company by its officers and employee has been noticed or reported for the year under audit.
xi) The Company has provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Companies Act, 2013.
xii) In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is not a nidhi company. Hence, in our opinion, the requirements of clause (xii) of Paragraph 3 of the Order do not apply to the Company.
xiii) The Company has complied with Section 177 and 188 of Companies Act, 2013, in respect of transactions with the related parties and relevant details have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) The Company has not made any preferential allotment or private placement of shares or full or convertible debentures during the year under review. Hence, the provisions of Clause (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 or persons 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 Reserve Bank of India Act, 1934.
ANNEXURE B TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF S.A.L. STEEL LIMITED
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 S.A.L STEEL Limited (''the Company) as of March 31, 2016 in conjunction with our audit of the standalone 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 controls 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. 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence I/we have obtained is sufficient and appropriate to provide a basis for my /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 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
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 March 31, 2016, 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 Talati & Talati
Chartered Accountants
(Firm Reg. No: 110758W)
Umesh Talati
Place : Ahmedabad Partner
Date : May 30, 2016 Mem No. : 034834
Mar 31, 2015
We have audited the accompanying financial statements of S.A.L STEEL
Limited ('the Company'), which comprise the Balance sheet as at March
31, 2015, the Statement of profit and loss , the Cash Flow Statement
for the year then ended, and a summary of significant accounting
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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on 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 ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. 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 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 financial
statements.
Basis for Qualified Opinion
1. Management is of the view that they do not anticipate execution of
its ongoing capital projects. However, due provision / write off /
impairment which must have been made in the books of accounts has not
been made. Out of the total book value of Capital work in progress of Rs.
103,89,20,943/- during the year, the management has charged back only
expense of pre operative expense, trial run expense and borrowing cost
element for Rs. 47,48,71,471/- to the statement of profit and loss during
the current year which was earlier capitalized. For the remaining
balance, the company has not carried out any Techno-economic assessment
during the year ended 31 March 2015 for the valuations of its ongoing
Capital Projects and hence identification of impairment loss and
provision thereof, if any, has not been made. The same is not in
accordance with the notified Accounting Standard 28 on Impairment of
asset which states that impairment loss is recognized when the carrying
amount of an asset exceeds its recoverable amount . The consequential
impact of adjustment, if any, on the financial statements is currently
not ascertainable. And hence we are unable to comment on its
consequential impact, if any, on the financial statements.
Apart from this, the Company has not made provision towards recovery of
capital advances for the said project for the amount of Rs.25,26,09,551/-
which are currently shown under Long term loans and advances. The
consequential impact of adjustment, if any, on the actual realization
of said advances on the financial statements is currently not
ascertainable. therefore we are unable to comment on its consequential
financial impact, if any, on the financial statements.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above , the
aforesaid 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 March 31, 2015 , and its loss for
the year ended March 31, 2015 and its cash flows 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 No. 26 to the financial statements which describes that the Non
disclosure of Reportable Segments as required under Accounting Standard
 17 'Segment Reporting', there is no impact on the Statement of Profit
and Loss due to non disclosure.
2) Note No. 29 to the financial statements which describes that the
company has reversed the Deferred Tax Asset for the amount of Rs.
16,44,16,320/- and charged it to Statement of Profit and Loss during
the Year ended March 31, 2015 due to Management anticipating no
sufficient future taxable Income to recover such Deferred Tax Asset.
The same is in accordance with the notified Accounting Standard 22 on
Accounting for Taxes on Income which states that Deferred Tax asset
should be recognized to the extent there is virtually certainty that
there will be sufficient future taxable income against which the said
deferred tax asset can be realized. Due to reversal of the said
deferred tax asset for Rs. 16,44,16,320/-, loss of the current year has
been higher by Rs. 16,44,16,320/- and Negative balance of Reserves and
Surplus has been lower by Rs. 16,44,16,320/- .
3) During the year, the Company has accumulated losses and its net
worth has been fully eroded. The Financial Statements indicates that
the Company has incurred a net loss/net cash loss during the current
and previous year(s) and, the Company's current liabilities exceeded
its current assets as at the current and previous year balance sheet
date. These conditions indicate the existence of a material uncertainty
that may cast significant doubt about the Company's ability to continue
as a going concern. However, the financial statements of the Company
have been prepared on a going concern basis for the reasons stated in
the said Note 27 to the financial statements.
4) Note 30 to the Financial Statements Regarding Dues to banks . 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, 2015 ("the
Order") issued by the Central Government of India in terms of sub-
section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 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 best of 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 Opinion paragraph above , in our opinion, proper books of
account as required by law have been 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 and the Cash
flow statement dealt 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 Opinion paragraph above , in our opinion, the aforesaid
financial statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Rule -7 of the Companies
(Accounts) Rules, 2014;
(e) The going concern matter as described in sub-paragraph (3) under
the Emphasis of Matters paragraph above, in our opinion, may have an
adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the
directors as on March 31, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
(g) 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, 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 financial statements  Refer Note 18A to the
financial statements;
(ii) The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses;
(iii) There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company.
Annexure to Independent Auditors' Report Referred to in paragraph 1
under the heading of "Report on Other Legal and Regulatory
Requirements" of our report of even date.)
i) In respect of its Fixed Assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets on the
basis of available information.
b) As explained to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased program of verification adopted by the Company. In our
opinion, the frequency of verification is reasonable having regard to
the size of the company and nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
ii) In respect of its inventories:
a) 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 our opinion, the frequency of
the verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventories.
As explained to us, there was no material discrepancies noticed on
Physical Verification of Inventories as compared with the book records.
iii) In respect of Loans, Secured or Unsecured granted by the company
to companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act, 2013: According to the
information and explanations given to us and on the basis of the
records produced before us, the company has not granted any Loan,
Secured or Unsecured to the companies or firms or other parties covered
in the register maintained under section 189 of the Companies Act 2013
and hence sub-clause (a) & (b) of paragraph 3 of the Companies
Auditor's Report Order 2015 are not applicable to the Company .
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchases of inventory, fixed assets and for the sales of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls
system.
v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit and hence the
provisions of Section 73 to 76 or any other 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 Report Order 2015 are not applicable to the Company.
According to the information and explanations given to us, no order has
been passed by Company Law Board or National Company Law Tribunal or
Reserve Bank of India or any Court or any other Tribunal.
vi) We have broadly reviewed the cost records maintained by the Company
as specified Central Government under sub Section (1) of Section 148 of
the Companies Act, 2013 and are of the opinion that the prescribed cost
records have been maintained. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
vii) In respect of the Statutory dues:
a) According to the records of the company, undisputed Statutory dues
including provident fund, employees state insurance, income- tax,
sales-tax, wealth-tax, service tax, duty of customs, duty of excise
,value added tax, cess and any other statutory dues have not 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 the information & explanation given to us, no undisputed
amounts payable in respect of the aforesaid dues were outstanding as at
31st March, 2015 for a period of more than six months from the date of
becoming payable.
b) On the basis of records produced before us for our verification and
according to the information and explanations given to us, the details
of disputed dues of Rs. 23,15,03,180/- have not been deposited as on 31st
March, 2015 on account of matters pending before the appropriate
authorities. The details of which are as under :
Sr.Name of the Statute Nature of Period to which
No. the Dues the amount relates
1 Central Excise Act, 1944 Central Excise Duty 2006-07
2 Central Excise Act, 1944 Central Excise Duty 2008-09
3 Custom Act, 1962 Custom Duty 2011-12
4 Central Excise Act, 1944 Central Excise Duty 2012-13
5 Gujarat Value Added Value Added Tax 2006-07
Tax Act 2003
6 Central Excise Act, 1944 Central Excise Duty 2008-09 to
2010-11
7 Central Service Tax Act, Service Tax Duty 2009-10
1994
8 Central Excise Act, 1944 Central Excise Duty 2005-06 to
Sep 2014
Sr.Name of the Statute Forum where the Amount
No. dispute is pending under dispute
not yet
deposited
(in Rs.)
1 Central Excise ACt,1944 Appellate Tribunal 5,55,781
Ahmedabad
2 Central Excise Act,1944 Appellate Tribunal 10,41,057
Ahmedabad
3 Custom Act,1962 Appellate Tribunal 2,41,79,202
Ahmedabad
4 Central Excise Act,1944 Appellate Tribunal 4,49,84,993
Ahmedabad
5 Gujarat Value Added Jt. Value Added Tax 3,65,63,595
Tax Act,2003
Commissioner (Appeal)
6 Central Excise Act,1944 Supreme Court 5,90,14,068
7 Central Service Tax Act, Service Tax 25,36,074
1944 Commissioner
8 Central Excise Act,1944 Central Excise 6,26,28,410
Commissioner
c) According to the information and explanations given to us there is
no amount which is required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956).
viii) On the basis of information and explanations given to us and on
the basis of records produced before us, the company's accumulated
losses at the end of the financial year are more than fifty percent of
its net worth. The company has incurred cash losses amounting to Rs
2,82,13,058/- during the current year .The company has incurred cash
losses amounting to Rs 28,00,81,448/- in the immediately preceding
financial year.
ix) On the basis of the information and explanation given to us and on
the basis of records produced before us, the company has defaulted in
repayment of Principal portion of the Term Loan to the extent of Rs
59,62,00,000/- as at the year end. The company has also defaulted in
payment of interest on term loan to the extent of Rs 39,41,29,005/- as
at the year end. The period of default on repayment of principal and
payment of interest is ranging for a period from 1 day to 912 days and
1 day to 820 days respectively. The company has also defaulted in
payment of interest on working capital facilities to the extent of Rs
21,25,93,330/- as at the year end. The period of default in payment of
interest is ranging for a period from 1 day to 881 days. Moreover, the
company has defaulted in honouring L/C payments to the extent of Rs.
12,50,04,346/- as at the balance sheet date. The period of default in
honouring L/C payments is ranging for a period from 609 days to 783
days .
x) The company has given corporate guarantee for Rs 80,00,00,000/- in
the earlier years. As on March 31, 2015, the balance of said corporate
guarantee is Rs. 6,03,78,259/- . In our opinion, the terms and conditions
on which the company has given guarantee is not prejudicial to the
interest of the company. The guarantee amount keeps on reducing to the
extent SAL Steel Limited repays Inter corporate deposit to Shah Alloys
Limited. The Guarantee ceases to exist upon repayment of entire amount
of Inter corporate deposit to Shah Alloys Limited.
xi) According to the information & explanations given to us, the
Company has not raised any term loan during the year under audit.
xii) In our opinion and according to the information and explanations
given to us and based on management representation, no material fraud
on or by the company has been noticed or reported during the financial
year covered by the audit.
For Talati & Talati
Chartered Accountants
(Firm Reg. No: 110758W)
Umesh Talati
Place:Ahmedabad Partner
Date :May 05, 2015 Mem No. : 034834
Mar 31, 2014
We have audited the accompanying financial statements of M/s S.A.L.
Steel Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements :
Management is responsible for the preparation of these financial
statements that gives a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the 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 financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal controls relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 :
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter:
We draw attention to Note No. 28 to the financial statements which
describes the Non disclosure of Reportable Segments as required under
Accounting Standard - 17 ''Segment Reporting'', there is no impact on the
Statement of Profit and Loss due to non disclosure. Our opinion is not
qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that;
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. 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 Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement dealt with this Report comply with the
Accounting Standards notified under the Companies Act, 1956 read with
the General Circular 15/2013 dated 13 September 2013 of the Ministry of
Corporate Affairs in respect of section 133 of the Companies Act, 2013;
e. On the basis of the written representations received from the
directors as on March 31, 2014, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2014,
from being appointed as a director in terms of Section 274(l)(g) of the
Companies Act, 1956.
Referred to in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date
i) In respect of its Fixed Assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets on the
basis of available information.
b) As explained to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased program of verification adopted by the Company. In our
opinion, the frequency of verification is reasonable having regard to
the size of the company and nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us, Fixed
Assets disposed off during the year were not substantial & therefore
the going concern status of the company is not affected.
ii) In respect of its inventories:
a) 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 our opinion, the frequency of
the verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventories.
As explained to us, there was no material discrepancies noticed on
Physical Verification of Inventories as compared with the book records.
iii) In respect of Loans, Secured or Unsecured, granted or taken by
company to/ from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956:
a) According to the information and explanations given to us and on the
basis of the records produced before us, the company has not granted
any Loan, Secured or Unsecured to the companies or firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 and hence sub-clause (b), (c) & (d) are not
applicable.
e) According to information and explanation given to us and on the
basis of records produced before us, the company has taken loan from
one company in earlier years, covered in the register maintained under
section 301 of the Companies Act, 1956. The maximum amount involved
during the year was Rs. 81,23,20,644/- and the year-end balance of loan
taken from such parties is Rs. 81,23,20,644/-. During the Year 2013-
14, the company has taken furthermore loan from a company which is
covered in the register maintained under section 301 of the Companies
Act, 1956 amounting to Rs. 7,62,00,000/-. The Maximum amount involved
during the year is 2,80,34,168Rs./- and the year-end balance of loan
taken from such party is Rs. 2,35,696.
f) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken from the company listed in the register
maintained under section 301 of the Act are not prejudicial to the
interest of the company.
g) On the basis of records produced before us and on the basis of
information and explanation given to us and as per the terms and
condition of the schedule stipulated for repayment in respect of loans
taken by the company, the repayment of the principal portion of the
loan from a company covered in the register maintained under section
301 of the Companies Act, 1956 was due to the extent of Rs.
10,00,00,000/- during the year 2011-12, Rs. 20,00,00,000/- during the
year 2012-13 and Rs. 20,00,00,000/- during the year 2013-14 totaling to
Rs.50,00,00,000 as at March 31,2014, however till date, the company has
not made any payment towards this dues.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchases of inventory, fixed assets and for the sales of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls
system.
v) In respect of the contracts or arrangements referred to in section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, t he particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under section 301 of the Companies
Act, 1956.
b) In our opinion, and according to information and explanation given
to us, the transactions of Purchase and Sale of goods, materials, fixed
assets and Services made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Companies
Act, 1956 and aggregating during the year to Rs. 5,00,000/- or more in
respect of each party, have been made at prices which are reasonable as
per the information available with the company, having regard to the
prevailing market prices for such goods, materials, fixed assets and
services or the prices at which the transactions for similar goods,
materials, fixed assets and services have been made with other parties.
vi) According to information and explanation given to us, the Company
has not accepted any deposit from the public during the year.
Therefore, the provisions of Clause (vi) of paragraph 4 of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
vii) The Company has appointed internal auditors and has carried out
internal audit during the year. In our opinion the scope needs to be
strengthened to make it commensurate with the size of the company & the
nature of its business.
viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that the prescribed cost
records have been maintained. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
ix) In respect of the Statutory dues:
a) According to the records of the company, undisputed Statutory dues
including Provident fund. Employees State Insurance, Investor education
& protection fund, Income-tax, Wealth-tax, Service Tax, Sales-tax,
Customs duties, Excise duty, cess and other Statutory dues have not
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 the information & explanation given to
us, no undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March, 2014 fora period of more than six months
from the date of becoming payable.
b) On the basis of records produced before us for our verification and
according to the information and explanations given to us, the details
of disputed dues of Rs. 31,35,45,426/- have not been deposited as on
31st March, 2014 on account of matters pending before the appropriate
authorities. The details of which are as under :
Sr. Name of the Nature Period to Forum where the Amount
No. Statute of the which the dispute is involved
Dues amount pending (in Rs.)
Relates
1 Central Excise Central 2006-07 Appellate Trib- 5,55,781
Act, 1944 Excise unal Ahmedabad
Duty
2 Central Excise Central 2008-09 Appellate Trib- 10,41,057
Act, 1944 Excise unal Ahmedabad
Duty
3 Custom Act, Custom 2011-12 Appellate Trib- 50,00,000
1962 Duty unal Ahmedabad
4 Central Excise Central 2012-13 Appellate Trib- 4,49,84,993
Act, 1944 Excise unal Ahmedabad
Duty
5 Gujarat Value Value 2006-07 Jt. Value Added 3,65,63,595
Added Tax Added Tax Commissioner
Act, 2003 Tax (Appeal)
6 Central Excise Central 2008-09 to Supreme Court 22,54,00,000
Act, 1944 Excise 2010-11
Duty
x) On the basis of information and explanations given to us and on the
basis of records produced before us, the company''s accumulated losses
at the end of the financial year are not more than fifty percent of its
net worth. The company has incurred cash losses amounting to Rs.
28,00,81,448/ - during the current year .The company has incurred cash
losses amounting to Rs. 22,86,05,895/-in the immediately preceding
financial year.
xi) On the basis of the information and explanation given to us and on
the basis of records produced before us, the company has defaulted in
repayment of Principal portion of the Term Loan to the extent of Rs.
36,60,00,000/- as at the year end. The company has also defaulted in
payment of interest on term loan to the extent of Rs. 22,91,24,406/- as
at the year end. The period of default on repayment of principal and
payment of interest is ranging for a period from 90 days to 547 days
and 90 days to 455 days respectively. Moreover, the company has also
defaulted in payment of interest on working capital facilities to the
extent of Rs. 11,71,25,768/- as at the year end. The period of default
in payment of interest is ranging fora period from 1 day to 516 days.
Also the company has defaulted in honoring L/C payments to the extent
of Rs. 36,34,09,044 as at March 31,2014. The period of default in
honoring L/C payments is ranging fora period from 244 days to 418 days.
xii) In our opinion and according to the information & explanation
given to us, no loans and advances have been granted by the company on
the basis of security by way of pledge of shares, debentures & other
securities.
xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund/ society, etc. Therefore, the provisions of Clause
(xiii) of paragraph 4 of the Companies (Auditors Report) Order, 2003
are not applicable to the Company.
xiv) According to the information & explanations given to us, the
company is not dealing or trading in shares, securities debentures &
other investments. Therefore, the provisions of Clause (xiv) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company
xv) The company has given corporate guarantee for Rs. 80,00,00,000/- in
the earlier years . In our opinion, the terms and conditions on which
the company has given guarantee is not prejudicial to the interest of
the company. The guarantee amount keeps on reducing to the extent SAL
Steel Limited repays Inter corporate deposit to Shah Alloys Limited.
The Guarantee ceases to exist upon repayment of entire amount of Inter
corporate deposit to Shah Alloys Limited
xvi) According to the information & explanations given to us, the
Company has not raised any term loan during the year under audit.
xvii) According to the information and explanations given to us and on
an overall examination of the financial statements and other records of
the company and after placing reliance on the reasonable assumptions
made by the company, we are of the opinion that funds raised on
shortterm basis have not been used for long term investment.
xviii) During the period covered under audit report, the company has
not made any preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the Act.
xix) During the period covered under audit report, the company has
notissued any debentures. Accordingly the provisions of clause (xix) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable to the company.
xx) During the period covered under audit report, the company has not
raised any money by way of public issue during the year.
xxi) In our opinion and according to the information and explanations
given to us and based on management representation, no material fraud
on or by the company has been noticed or reported during the financial
year covered by the audit.
For Talati % Talati
Chartered Accountants
(Firm Reg. No : 110758W)
Umesh Talati
Place : Ahmedabad Partner
Date : May 28, 2014 Membership No: 034834
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of M/s S.A.L.
Steel Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) of the Companies
Act, 1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the 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 financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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:
Subject to Note No.29 for Non disclosure of Reportable Segments as
required under Accounting Standard  17 ''Segment Reporting'', there is
no impact on the Statement of Profit and Loss due to non disclosure.
Without qualifying our opinion, we would like to draw your attention to
Note No. 38, regarding income on account of sale of power in the last
financial year 2011-12 due to which the results of the company are not
comparable to the extent of Rs. 31,09,85,750/- (a) In the case of the
Balance Sheet, of the state of affairs of the Company as at March 31,
2013;
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. 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 Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. in our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in section 211(3C) of the Act;
e. On the basis of the written representations received from the
directors as on March 31, 2013, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013,
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Annexure to Independent Auditors'' Report
Referred to in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of our report of even date
i) In respect of its Fixed Assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets on the
basis of available information.
b) As explained to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased program of verification adopted by the Company. In our
opinion, the frequency of verification is reasonable having regard to
the size of the company and nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us, Fixed
Assets disposed off during the year were not substantial & therefore
the going concern status of the company is not affected.
ii) In respect of its inventories:
a) 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 our opinion, the frequency of
the verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventories.
As explained to us, there was no material discrepancies noticed on
Physical Verification of Inventories as compared with the book records.
iii) In respect of Loans, Secured or Unsecured, granted or taken by
company to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956 :
a) According to the information and explanations given to us and on the
basis of the records produced before us, the company has not granted
any Loan, Secured or Unsecured to the companies or firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 and hence sub-clause (b), (c) & (d) are not
applicable.
e) According to information and explanation given to us and on the
basis of records produced before us, the company has taken loans from
two companies in earlier years, covered in the register maintained
under section 301 of the Companies Act, 1956. The maximum amount
involved during the year was Rs. 81,12,40,644/- and the year-end balance
of loan taken from such parties is Rs. 81,12,40,644/-. During the Year
2012-13, the company has taken furthermore loan from a company which is
covered in the register maintained under section 301 of the Companies
Act, 1956 amounting to Rs. 1,50,00,000/-. The Maximum amount involved
during the year is Rs. 2,38,14,941/- and the year-end balance of loan
taken from such party is Rs. 53,34,168/- f) In our opinion, the rate of
interest and other terms and conditions on which loan has been taken
from the company listed in the register maintained under section 301 of
the Act are not prejudicial to the interest of the company.
g) On the basis of records produced before us and on the basis of
information and explanation given to us and as per the terms and
condition of the schedule stipulated for repayment in respect of loans
taken by the company, the repayment of the principal portion of the
loan from a company covered in the register maintained under section
301 of the Companies Act, 1956 was due to the extent of Rs.
10,00,00,000/- during the year 2011-12 and Rs. 20,00,00,000/- during the
year 2012-13, however till date, the company has not made any payment
towards this dues.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchases of inventory, fixed assets and for the sales of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls
system.
v) In respect of the contracts or arrangements referred to in section
301 of the Companies Act, 1956 :
a) In our opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under section 301 of the Companies
Act, 1956.
b) In our opinion, and according to information and explanation given
to us, the transactions of Purchase and Sale of goods, materials, fixed
assets and Services made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Companies
Act, 1956 and aggregating during the year to Rs. 5,00,000/- or more in
respect of each party, have been made at prices which are reasonable as
per the information available with the company, having regard to the
prevailing market prices for such goods, materials, fixed assets and
services or the prices at which the transactions for similar
goods,materials, fixed assets and services have been made with other
parties.
vi) According to information and explanation given to us, the Company
has not accepted any deposit from the public during the year.
Therefore, the provisions of Clause (vi) of paragraph 4 of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
vii) The Company has appointed internal auditors and has carried out
internal audit during the year. In our opinion based on the size,
nature and extent of the business, the internal audit system of the
company is commensurate with the size and nature of the business.
viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that the prescribed cost
records have been maintained. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
ix) In respect of the Statutory dues:
According to the records of the company, undisputed Statutory dues
including Provident fund, Employees State Insurance, Investor education
& protection fund, Income-tax, Wealth-tax, Service Tax, Sales-tax,
Customs duties, Excise duty, cess and other Statutory dues have not
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 the information & explanation given to
us, no undisputed amounts payable in respect of the aforesaid dues were
outstanding as at 31st March, 2013 for a period of more than six months
from the date of becoming payable.
x) On the basis of information and explanations given to us and on the
basis of records produced before us, the company''s accumulated losses
at the end of the financial year are not more than fifty percent of its
net worth. The company has incurred cash losses amounting to Rs.
22,86,05,895/- during the current year. The company has not incurred
any cash losses in the immediately preceding financial year.
xi) On the basis of the information and explanation given to us and on
the basis of records produced before us, the company has defaulted in
repayment of Principal portion of the Term Loan to the extent of Rs.
12,05,00,000/- as at the year end. The company has also defaulted in
payment of interest on term loan to the extent of Rs. 5,40,47,181/- as at
the year end. The period of default on repayment of principal and
payment of interest is ranging for a period from 90 days to 182 days
and 31 days to 90 days respectively. The company has made a delayed
payment of Principal amount of Term Loan to the extent of Rs.
7,89,37,427/- and interest amount of Rs. 13,93,27,614/-. The period of
delay in payment of principal and payment of interest is ranging for a
period from 65 days to 178 days and 3 days to 173 days respectively.
Moreover, the company has also defaulted in payment of interest on
working capital facilities to the extent of Rs. 1,78,48,057/- as at the
year end. The period of default on repayment of principal and payment
of interest is ranging for a period from 1 day to 151 days. The company
has defaulted in honouring L/C payments to the extent of Rs.
11,12,84,367/- as at the balance sheet date. The period of default in
honouring L/C payments is ranging for a period from 19 days to 53 days.
The company has made a delayed payment in honouring L/C to the extent
of Rs. 55,14,04,565/- during the year. The period of default in honouring
L/C payments is ranging for a period from 1 day to 101 days.
xii) In our opinion and according to the information & explanation
given to us, no loans and advances have been granted by the company on
the basis of security by way of pledge of shares, debentures & other
securities.
xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund/society, etc. Therefore, the provisions of Clause
(xiii) of paragraph 4 of the Companies (Auditors Report) Order, 2003
are not applicable to the Company.
xiv) According to the information & explanations given to us, the
company is not dealing or trading in shares, securities debentures &
other investments. Therefore, the provisions of Clause (xiv) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
xv) The company has given corporate guarantee for Rs. 80,00,00,000/- in
the earlier years. In our opinion, the terms and conditions on which
the company has given guarantee is not prejudicial to the interest of
the company. The guarantee amount keeps on reducing to the extent SAL
Steel Limited repays Inter corporate deposit to Shah Alloys Limited.
The Guarantee ceases to exist upon repayment of entire amount of Inter
corporate deposit to Shah Alloys Limited
xvi) According to the information & explanations given to us, the
Company has not raised any term loan during the year under audit.
xvii) According to the information and explanations given to us and on
an overall examination of the financial statements and other records of
the company and after placing reliance on the reasonable assumptions
made by the company, we are of the opinion that funds raised on short
term basis have not been used for long term investment.
xviii) During the period covered under audit report, the company has
not made any preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the Act.
xix) During the period covered under audit report, the company has not
issued any debentures. Accordingly the provisions of clause (xix) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable to the company.
xx) During the period covered under audit report, the company has not
raised any money by way of public issue during the year.
xxi) In our opinion and according to the information and explanations
given to us and based on management representation, no material fraud
on or by the company has been noticed or reported during the financial
year covered by the audit.
For Talati & Talati
Chartered Accountants
(Firm Reg. No : 110758W)
Sd/-
Umesh Talati
Place : Ahmedabad Partner
Date : May 28, 2013 Membership No: 034834
Mar 31, 2012
1) We have audited the attached Balance Sheet of M/s. S.A.L. STEEL
LIMITED as at March 31, 2012, the Statement of Profit and Loss and the
Cash-flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2) We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3) As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956 of India (the 'Act') we
enclose in the Annexure a statement on the matters specified in
paragraphs 4 & 5 of the said order to the extent applicable.
4) Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of 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 the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report are in compliance with
the Accounting Standards referred to in sub section (3C) of Section 211
of the Companies Act, 1956.
Subject to Note No.29 for Non disclosure of Reportable Segments as
required under Accounting Standard - 17 'Segment Reporting' issued by
the Institute of Chartered Accountants of India, there is no impact on
the Statement of Profit and Loss due to non disclosure.
Without qualifying our opinion, we would like to draw your attention to
Note No. 37, regarding income on account of sale of Power due to which
the results of the company are not comparable to the extent of Rs.
31,09,85,750/-
(e) On the basis of written representations received from the
Directors, as on March 31, 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as director in terms of clause (g)
of sub-section (1) of Section 274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements read
together with the Significant accounting policies and notes thereon
give the information required by the Companies Act, 1956 , in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditor's Report
Referred to in Paragraph 3 of our report of even date
i) In respect of its Fixed Assets:
a) The company has maintained proper records showing full particulars
including quantitative details and situation of the fixed assets on the
basis of available information.
b) As explained to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased program of verification adopted by the Company. In our
opinion, the frequency of verification is reasonable having regard to
the size of the company and nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us, Fixed
Assets disposed off during the year were not substantial & therefore
the going concern status of the company is not affected.
ii) In respect of its inventories:
a) 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 our opinion, the frequency of
the verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventories.
As explained to us, there was no material discrepancies noticed on
Physical Verification of Inventories as compared with the book records.
iii) a) In respect of Loans, Secured or Unsecured, granted or taken by
company to/from companies, firms or other parties covered in the
register maintained under section 301 of the Companies Act, 1956:
According to the information and explanations given to us and on the
basis of the records produced before us, the company has not granted
any Loan, Secured or Unsecured to the companies or firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 and hence sub-clause (b), ( c) & (d) are not
applicable.
e) According to information and explanation given to us and on the
basis of records produced before us, the company has taken a loan from
a company in earlier years, covered in the register maintained under
section 301 of the Companies Act, 1956. The maximum amount involved
during the year was Rs. 80,00,00,000/- and the year-end balance of loan
taken from such party is Rs. 80,00,00,000/-. During the Year 2011-12, the
company has taken loan from two companies which are covered in the
register maintained under section 301 of the Companies Act, 1956
amounting to Rs. 2,75,00,000/- . The Maximum amount involved during the
year and the year-end balance of loans taken from such parties is Rs.
2,77,95,150/-.
f) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken from the company listed in the register
maintained under section 301 of the Act are not prejudicial to the
interest of the company.
g) On the basis of records produced before us and on the basis of
information and explanation given to us and as per the terms and
condition of the schedule stipulated for repayment in respect of loans
taken by the company , the repayment of the principal portion of the
loan from a company covered in the register maintained under section
301 of the Companies Act, 1956 was due to the extent of Rs.
10,00,00,000/- during the year 2011-12 , however the company has
defaulted in repayment of Rs. 10,00,00,000/- during the year.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchases of inventory, fixed assets and for the sales of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls
system.
v) a) In respect of the contracts or arrangements referred to in
section 301 of the Companies Act, 1956:In our opinion and according to
the information and explanations given to us, the particulars of
contracts or arrangements referred to in section 301 of the Companies
Act, 1956 have been entered in the register required to be maintained
under section 301 of the Companies Act, 1956.
b) In our opinion, and according to information and explanation given
to us, the transactions of Purchase and Sale of goods, materials, fixed
assets and Services made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Companies
Act, 1956 and aggregating during the year to Rs. 5,00,000/- or more in
respect of each party, have been made at prices which are reasonable as
per the information available with the company , having regard to the
prevailing market prices for such goods ,materials ,fixed assets and
services or the prices at which the transactions for similar goods
,materials, fixed assets and Services have been made with other
parties.
vi) According to information and explanation given to us, the Company
has not accepted any deposit from the public during the year.
Therefore, the provisions of Clause (vi) of paragraph 4 of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
vii) The Company has appointed internal auditors and has carried out
internal audit during the year. In our opinion based on the size,
nature and extent of the business, the internal audit system of the
company is commensurate with the size and nature of the business.
viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that the prescribed cost
records have been maintained. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
ix) a) In respect of the Statutory dues:According to the records of the
company, undisputed Statutory dues including Provident fund, Employees
State Insurance, Investor education & protection fund, Income-tax,
Wealth-tax, Service Tax, Sales-tax Customs duties, Excise duty, cess
and other Statutory dues have not 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 the
information & explanation given to us, no undisputed amounts payable in
respect of the aforesaid dues were outstanding as at 31st March, 2012
for a period of more than six months from the date of becoming payable.
b) On the basis of records produced before us for our verification and
according to the information and explanations given to us, the details
of disputed dues of Rs. 26,35,60,433/- have not been deposited as on 31st
March, 2012 on account of matters pending before the appropriate
authorities. The details of which are as under:
Sr. Name of the
Statute Nature of Period to
which Forum where the Amount
No. the Dues the amount
relates dispute is pending involved
(in Rs.)
1. Gujarat Value
Added Tax Value Added
Tax 2006-07 Jt. Value Added
tax 3,65,63,595
Act 2003 Commissioner
(Appeal)
2. Central
Excise
Act, 1944 Central
Excise Duty 2008-09 Supreme Court 22,54,00,000
to 2010-11
3. Central
Excise
Act, 1944 Central
Excise Duty 2008-09 Appellate
Tribunal 10,41,057
to 2010-11 Ahmedabad
4. Central
Excise
Act, 1944 Central
Excise Duty 2006-07 Appellate
Tribunal 5,55,781
Ahmedabad
x) On the basis of information and explanations given to us and on the
basis of records produced before us , the company does not have any
accumulated loss at the end of the financial year. The company has not
incurred cash losses during the financial year covered by the audit and
in the immediately preceding financial year.
xi) On the basis of the information and explanation given to us and on
the basis of records produced before us, the company has defaulted in
repayment of Principal portion of the Term Loan to the extent of Rs.
2,45,60,397/- as at the year end. The company has also defaulted in
payment of interest on term loan to the extent of Rs. 1,69,08,531/- as at
the year end. The period of default on repayment of principal and
payment of interest is ranging for a period from 3 days to 87 days and
12 days to 47 days respectively.
xii) In our opinion and according to the information & explanation
given to us, no loans and advances have been granted by the company on
the basis of security by way of pledge of shares, debentures & other
securities.
xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund/ society, etc. Therefore, the provisions of Clause
(xiii) of paragraph 4 of the Companies (Auditors Report) Order, 2003
are not applicable to the Company.
xiv) According to the information & explanations given to us, the
company is not dealing or trading in shares, securities debentures &
other investments. Therefore, the provisions of Clause (xiv) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company
xv) The company has given corporate guarantee for Rs. 80,00,00,000/- in
the earlier years. In our opinion, the terms and conditions on which
the company has given guarantee is not prejudicial to the interest of
the company. The guarantee amount keeps on reducing to the extent SAL
Steel Limited repays Inter corporate deposit to Shah Alloys Limited.
The Guarantee ceases to exist upon repayment of entire amount of Inter
corporate deposit to Shah Alloys Limited
xvi) According to the information & explanations given to us, the
Company has not raised any term loan during the year under audit.
xvii) According to the information and explanations given to us and on
an overall examination of the financial statements and other records of
the company and after placing reliance on the reasonable assumptions
made by the company, we are of the opinion that funds raised on short
term basis have not been used for long term investment.
xviii) During the period covered under audit report, the company has
not made any preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the Act.
xix) During the period covered under audit report, the company has not
issued any debentures. Accordingly the provisions of clause (xix) of
paragraph 4 of the Companies (Auditors Report) Order, 2003 are not
applicable to the company.
xx) During the period covered under audit report, the company has not
raised any money by way of public issue during the year.
xxi) In our opinion and according to the information and explanations
given to us and based on management representation, no material fraud
on or by the company has been noticed or reported during the financial
year covered by the audit.
For Talati & Talati
Chartered Accountants
(Firm Reg. No. : 110758W)
Umesh Talati
Place : Ahmedabad Partner
Date : June 30, 2012 Membership No: 034834
Mar 31, 2011
1) We have audited the attached Balance Sheet of M/s S.A.L. STEEL LTD.
as at 31st March 2011, and the Profit and Loss Account and also the
Cash-flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's
Management. Our responsi- bility is to express an opinion on these
financial statements based on our audit.
2) We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those stan- dards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3) As required by the Companies (Auditor's Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order,2004
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of 'The Companies Act, 1956' of India (the 'Act') we
annex hereto a statement on the matters specified in paragraphs 4 &5 of
the said order to the extent applicable.
4) Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of the
books;
(c) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub section (3C) of Section 211 of the Act;
Subject to Note No.4 of Schedule 19 for Non disclosure of Reportable
Segments as required under Ac- counting Standard à 17 'Segment
Reporting' issued by the Institute of Chartered Accountants of India.
There is no impact on Profit and Loss Account due to non disclosure.
(e) On the basis of the written representations received from the
directors, as on March 31, 2011 and taken on record by the Board of
Directors, we report that none of the directors of the company are
disqualified as on March 31, 2011 from being appointed as director in
terms of clause (g) of sub- section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with significant accounting policies and notes thereon and at- tached
thereto give in the prescribed manner the information required by the
Act and give a true and fair view in conformity with the accounting
principles generally accepted in India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
ii) In the case of the Profit and Loss Account, of the profit of the
company for the year ended on that date; and
iii) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITOR'S REPORT
Referred to in Paragraph 3 of our report of even date
i) a) The company has maintained proper records showing full
particulars including quantita-
tive details and situation of the fixed assets.
b) As explained to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased program of verification adopted by the Company. In our
opinion, the frequency of verification is reasonable having regard to
the size of the company and nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us, Fixed
Assets disposed off during the year were not substantial & therefore do
not affect the Going Concern assumption.
ii) a) 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 our opinion, the frequency of
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are rea- sonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventories.
As explained to us, there was no material discrepancies noticed on
Physical Verification of Inventories as compared with the book records.
iii) In respect of Loans, Secured or Unsecured,, granted or taken by
company to/from
companies, firms or other parties covered in the register maintained
under section 301 of the Act:
a) According to information and explanations given to us and on the
basis of the records produced before us, the company has not granted
any Loan, Secured or Unsecured to the companies or firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 and hence sub-clause b, c & d are not applicable.
b) According to information and explanation given to us and on the
basis of records produced before us the company has taken loan from a
company in earlier years, covered in the register maintained under
section 301 of the Companies Act, 1956. The maximum amount involved
during the year was Rs. 80 Crores and year end balance of loans taken
from such party is Rs. 80 Crores.
c) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken from company listed in the register
maintained under section 301 of the Act are prima facie not prejudicial
to the interest of the company.
d) On the basis of records produced before us and on the basis of
information and explana- tion given to us and as per the schedule
stipulated for the terms and condition in respect of loans taken by the
company, the repayment of the said loan is not due for repayment during
the year 2010-11.
iv) In our opinion & according to the information & explanations given
to us, there are adequate internal control systems which commensurate
with the size of the company & nature of its business for the purchase
of inventory, fixed assets & also for the sales of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal controls systems.
v) a) In our opinion and according to the information & explanations
given to us, the particu- lars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under section 301 of the Companies
Act, 1956.
b) In our opinion, and according to information and explanation given
to us, the transac- tions of Purchase of goods, and materials and Sale
of goods, materials, Fixed Assets and Services made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Companies Act, 1956 and aggregating during the year
to Rupees Five lacs or more in respect of each party, have been made at
prices which are reasonable, having regard to the prevailing market
prices for such Goods ,Materials ,Fixed assets and Services or the
prices at which the transactions for similar Goods, Materials, Fixed
Assets and Services have been made with other parties.
vi) The Company has not accepted any deposit from the public during the
year.
vii) The Company has appointed internal auditors and has carried out
internal audit during the year. In our opinion based on the size,
nature and extent of the business the internal audit system of the
company is commensurate with the size and nature of the business.
viii) The Central Government has prescribed maintenance of cost records
under section 209 (1) (d) of the Act. We have broadly reviewed the
accounts and records of the company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained. We have however not made a detailed
examination of the same.
ix) a) According to the records of the company, undisputed Statutory
dues including provi- dent fund, employees State Insurance, Income-tax,
Wealth-tax, Service Tax, Sales-tax Customs duties, excise duty, cess
and other statutory dues have not 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 the
information & explanation given to us, no undisputed amounts payable in
respect of the aforesaid dues were outstanding as at 31st March, 2011
for a period of more than six months from the date of becoming payable.
Amount due and outstanding for a period exceeding six months as at 31st
March, 2011 is of Rs 48.99 lacs in respect of Service Tax and of Rs
22.24 lacs in respect of Tax deducted at source.
b) On the basis of records produced before us for our verification and
according to the information and explanations given to us, the details
of disputed VAT dues of Rs 365.63 lacs have not been deposited as on
31st March, 2011 on account of matters pending before the appropriate
authorities. The details of which are as under:
Sr Nature Financial Year Forum where Amount
No. of Dues to which the the matter Rs. (in Lacs)
matter relates is pending Net of Payment
1 Value Addes Tax 2006-07 Jt. Value Added 365.63
Tax Commissioner
(Apeal)
x) On the basis of information and explanations given to us and on the
basis of records produced before us the company does not have any
accumulated loss at the end of the year and has not incurred cash
losses in the relevant financial year and in the immediately preceding
financial year.
xi) On the basis of information and explanation given to us and on the
basis of records produced the company has delayed the payment in
respect of interest to the banks and institutions during the year. As
per the information given to us, payments have been delayed generally
in a range of 1 day to 89 days from the due date. The total delayed
interest payment made by the company is Rs.1719.42 Lacs during the
year.
xii) In our opinion & according to the information & explanation given
to us, no loans & advances have been granted by the company on the
basis of security by way of pledge of shares, debentures & other
securities.
xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund/ society etc.
xiv) According to the information & explanations given to us, the
company is not dealing or trading in shares, securities debentures &
other investments.
xv) The company has given corporate guarantee for Rs. 80 Crores in the
earlier years for loans taken from Shah Alloys Limited, in our opinion,
the terms and conditions on which the company has given guarantee for
loans taken by Shah Alloys Limited from banks or financial institutions
are prime facie, not prejudicial to the interest of the company.
xvi) According to the information & explanations given to us, the term
loans have been applied for the purpose for which they have been
raised.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company and after
placing reliance on the reasonable assumptions made by the company,
there are no funds raised on short term basis that have been used for
long term basis.
xviii) During the period covered under audit report the company has not
made any preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the Act.
xix) During the period covered under audit report the company has not
issued any debentures. Accordingly the provisions of clause (xix) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
company.
xx) During the period covered under audit report the company has not
raised any money by way of public issue during the year.
xxi) According to the information & explanations given to us and based
on management representa- tion, no fraud on or by the company has been
noticed or reported during the course of our Audit.
Place : Ahmedabad For TALATI & TALATI
Date : 23rd July 2011 Chartered Accountants
(Firm Reg. No. : 110758W)
Umesh Talati
Partner
Membership No: 034834
Mar 31, 2010
1) We have audited the attached Balance Sheet of M/S. S.A.L. STEEL LTD.
as at 31st March 2010, and the Profit and Loss Account and also the
Cash-flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys
Management. Our responsi- bility is to express an opinion on these
financial statements based on our audit.
2) We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those stan- dards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3) As required by the Companies (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order,2004
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of The Companies Act, 1956 of India (the Act) we
annex here to a statement on the matters specified in paragraphs 4 &5
of the said order to the extent applicable.
4) Further to our comments in the Annexure referred to in paragraph 3
above, we report that:%
(a) We have obtained all the information and explanations, which to the
best of 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 the Company so far as appears from our examination of the
books;
(c) The Balance Sheet, the Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(d) In our opinion the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub section (3C) of Section 211 of the Act;
Subject to Note No. 4 of Schedule 19 for Non disclosure of Reportable
Segments as required under Ac- counting Standard -17 Segment
Reporting issued by the Institute of Chartered Accountants of India.
There is no impact on Profit and Loss Account due to non disclosure.
(e) On the basis of the written representations received from the
directors, as on March 31, 2010 and taken on record by the Board of
Directors, we report that none of the directors of the company are
disqualified as on March 31, 2010 from being appointed as director in
terms of clause (g) of sub- section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the pre- scribed
manner the information required by the Act and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010; ii) In the case of the Profit and Loss
Account, of the profit of the company for the year ended on that date;
and iii) In the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORSREPORT Referred to in Paragraph 3 of our report of
even date
I) a) The company has maintained proper records showing full
particulars including quantitative details and situation of the fixed
assets.
b) As explained to us, a major portion of the fixed assets has been
physically verified by the management during the year in accordance
with a phased pro- gram of verification adopted by the Company. In our
opinion, the frequency of verification is reasonable having regard to
the size of the company and nature of its assets. As informed to us, no
material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us, Fixed
Assets disposed off during the year were not substantial & therefore do
not affect the Going Concern assumption.
ii) a) 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 our opinion, the frequency of
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are rea- sonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us, the company has maintained proper records of inventories.
As explained to us, there was no material discrepancies noticed on
Physical Verification of Inventories as compared with the book records.
iii) In respect of Loans, Secured or Unsecured, granted or taken by
company to/from companies, firms or other parties covered in the
register maintained under section 301 of the Act:
a) According to information and explanations given to us and on the
basis of the records produced before us, the company has not granted
any Loan, Secured or Unsecured to the companies or firms or other
parties covered in the register maintained under section 301 of the
Companies Act 1956 and hence sub-clause b, c & d are not applicable.
b) According to information and explanation given to us and on the
basis of records produced before us the company has taken loan from one
company in earlier years, SHAH ALLOYS LIMITED covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 80 Crores and year end balance
of loans taken from such party is Rs. 80 Crores.
c) In our opinion, the rate of interest and other terms and conditions
on which loan has been taken from company listed in the register
maintained under section 301 of the Act are prima facie not prejudicial
to the interest of the company.
d) On the basis of records produced before us and on the basis of
information and explana- tion given to us and as per the revised
schedule stipulated for the terms and condition in respect of loans
taken by the company, the repayment of the said loan is not due for
repayment as on 31st March 2010.
iv) In our opinion & according to the information & explanations given
to us, there are adequate internal control systems which commensurate
with the size of the company & nature of its business for the purchase
of inventory, fixed assets & also for the sales of goods and services.
During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal controls systems.
v) a) In our opinion and according to the information & explanations
given to us, the particu- lars of contracts or arrangements referred to
in section 301 of the Companies Act, 1956 have been entered in the
register required to be maintained under section 301 of the Companies
Act, 1956.
b) In our opinion, and according to information and explanation given
to us, the transac- tions of Purchase of goods, and materials and Sale
of goods, materials, Fixed Assets and Services made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Companies Act, 1956 and aggregating during the year
to Rupees Five lacs or more in respect of each party, have been made at
prices which are reasonable, having regard to the prevailing market
prices for such Goods ,Materials ,Fixed assets and Services or the
prices at which the transactions for similar Goods ,Materials, Fixed
Assets and Services have been made with other parties.
vi) The Company has not accepted any deposit from the public during the
year.
vii) The Company has appointed internal auditors and has carried out
internal audit during the year. In our opinion based on the size,
nature and extent of the business the internal audit system of the
company is commensurate with the size and nature of the business.
viii) The Central Government has prescribed maintenance of cost records
under section 209 (1) (d) of the Act. We have broadly reviewed the
accounts and records of the company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained. We have however not made a detailed
examination of the same.
ix) a) According to the records of undisputed Statutory dues including
provident fund, em- ployees State Insurance, Income-tax, Wealth-tax,
Service Tax, Sales-tax Customs duties, excise duty, cess and other
statutory dues have not 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 the information &
explanation given to us, no undisputed amounts payable in respect of
the aforesaid dues were outstanding as at 31st March, 2010 for a period
of more than six months from the date of becoming payable.
b) On the basis of records produced before us for our verification and
according to the information and explanations given to us, the company
has no disputed statutory dues that have not been deposited on account
of matters pending before appropriate au- thorities.
x) On the basis of information and explanations given to us and on the
basis of records produced before us the company does not have any
accumulated loss at the end of the year and has not incurred cash
losses in the relevant financial year and in the immediately preceding
financial year.
xi) On the basis of information and explanation given to us and on the
basis of records produced the company has delayed the payment in
respect of interest/installment to the banks and institutions during
the year. However, as explained to us, the company has repaid the
respec- tive installment/interest so that the accounts of the company
with the banks and institutions have remained in order. As per the
information given to us, repayments have been delayed generally in a
range of 1 day to 91 days from the due date. The total interest payment
made by the company with delay is Rs. 1,099 Lacs during the year and
delay in total principal installment by the company is Rs. 1,606 Lacs.
xii) In our opinion & according to the information & explanation given
to us, no loans & advances have been granted by the company on the
basis of security by way of pledge of shares, debentures & other
securities.
xiii) In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund/ society etc.
xiv) According to the information & explanations given to us, the
company is not dealing or trading in shares, securities debentures &
other investments.
xv) The company has given guarantee for Rs. 80 Crores in the earlier
years for loans taken by Shah Alloys Limited, in our opinion, the terms
and conditions on which the company has given guarantee for loans taken
by Shah Alloys Limited from banks or financial institutions are prime
facie, not prejudicial to the interest of the company.
xvi) According to the information & explanations given to us, the term
loans have been applied for the purpose for which they have been
raised.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company and after
placing reliance on the reasonable assumptions made by the company,
funds raised on short term basis amounting to Rs.338.31 Lacs have been
used for long term purpose.
xviii) During the period covered under audit report the company has not
made any preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the Act.
xix) During the period covered under audit report the company has not
issued any debentures. Accordingly the provisions of clause (xix) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
company.
xx) During the period covered under audit report the company has not
raised any money by way of public issue during the year.
xxi) According to the information & explanations given to us, no fraud
on or by the company has been noticed or reported during the course of
our Audit.
PLACE : AHMEDABAD For TALATI &TALATI
DATE: 22nd July 2010 Chartered Accountants
(Firm Reg. No.: 110758W)
Umesh Talati
Partner
Membership No: 034834
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