To The Members of JSW Steel Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of JSW Steel
Limited ("the Company"), which comprise the Balance Sheet as at 31 March, 2017,
and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement
of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary
of the significant accounting policies and other explanatory information, and which
includes a joint operation (hereinafter referred to as "the standalone Ind AS
financial statements").
Managements Responsibility for the Standalone Ind AS Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone Ind AS financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive income, cash flows
and changes in equity of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed
under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the standalone Ind
AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial
statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the
accounting and auditing standards and matters which are required to be included in the
audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the standalone Ind AS financial statements. The procedures selected
depend on the auditors judgment, including the assessment of the risks of material
misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal financial control
relevant to the Companys preparation of the standalone Ind AS financial statements that
give a true and fair view in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Companys
Directors, as well as evaluating the overall presentation of the standalone Ind AS
financial statements.
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.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone Ind AS financial statements give the information
required by the Act in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the state of affairs of the
Company as at 31 March, 2017, and its profit, total comprehensive income, its cash flows
and the changes in equity for the year ended on that date.
Emphasis of Matter
Attention is invited to note 48 to the standalone Ind AS financial statements regarding
the factors considered in the Companys assessment that the carrying amounts of the
investments aggregating to Rs. 956.66 crore in and the loans and advances aggregating to
Rs. 3,140.31 crore to certain subsidiaries and a joint venture are recoverable and that no
loss allowance is required against the financial guarantees of Rs. 3,375.65 crore.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report, to the
extent applicable that:
a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit.
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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this
Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the
Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31
March, 2017 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March, 2017 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 joint operation, and the operating effectiveness of such
controls, refer to our separate Report in "Annexure A". Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Companys internal
financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in
our opinion and to the best of our information and according to the explanations given to
us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company;
iv. The Company has provided requisite disclosures in the standalone Ind AS financial
statements as regards its holding and dealings in Specified Bank Notes as Defined in the
Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during
the period from 8th November 2016 to 30th December 2016. Based on audit procedures
performed and the representations provided to us by the management we report that the
disclosures are in accordance with the books of account maintained by the Company and
produced to us by the management.
2. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give in
"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the
Order.
|
For DELOITTE HASKINS & SELLS LLP |
|
Chartered Accountants |
|
(Firms Registration No. 117366W/ W-100018) |
|
A. Siddharth |
|
Partner |
| Mumbai, dated: 17 May 2017 |
(Membership No. 31467) |
Annexure "A" to the Independent Auditors Report
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory
Requirements section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting 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 JSW Steel
Limited ("the Company") as of 31 March, 2017 in conjunction with our audit of
the standalone Ind AS financial statements of the Company for the year ended on that date
which includes a jointly controlled operation.
Managements Responsibility for Internal Financial Controls
The Companys 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 (the
"Guidance Note") 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 companys 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 Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note issued by the Institute of Chartered Accountants of India and the
Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the
extent applicable to an audit of internal financial controls. Those Standards and the
Guidance Note require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether adequate internal financial controls
over financial reporting was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgement, 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 Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys 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 companys 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 authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys 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 and 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 31 March, 2017, 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 issued by the Institute of
Chartered Accountants of India.
|
For DELOITTE HASKINS & SELLS LLP |
|
Chartered Accountants |
|
(Firms Registration No. 117366W/ W-100018) |
|
A. Siddharth |
|
Partner |
| Mumbai, dated: 17 May 2017 |
(Membership No. 31467) |
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory
Requirements section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of property, plant and equipment.
(b) The Company has a program of verification of property, plant and equipment to cover
all the items in a phased manner over a period of three years which, in our opinion, is
reasonable having regard to the size of the Company and the nature of its assets. Pursuant
to the program, certain property, plant and equipment were physically verified by the
management during the year. According to the information and explanations given to us, no
material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined
by us and based on the examination of the registered sale deed/ transfer deed/ conveyance
deed provided to us, we report that, the title deeds, comprising all the immovable
properties of land and acquired buildings which are freehold, are held in the name of the
Company as at the balance sheet date, except the following:
| Particulars of freehold land |
Gross block and net block as at 31 March, 2017 (Rs. in crores)
|
| Land located at Maharashtra Beneghat village of Raigad district admeasuring 13.48
acres |
6.00 |
| Land located at Maharashtra Vave village of Raigad district admeasuring 1.72 acres |
0.77 |
| Land located at Maharashtra Dolvi village of Raigad district admeasuring 4.96 acres |
2.61 |
| Land located at Maharashtra Khar Kharavi village of Raigad district admeasuring 6.13
acres |
3.23 |
| Land located at Maharashtra Jui Bapuji village of Raigad district admeasuring 0.78
acres |
0.41 |
In respect of immovable properties of land that have been taken on lease and disclosed
as property, plant and equipment in the financial statements, the lease agreements are in
the name of the Company, where the Company is the lessee in the agreement. There are no
buildings that have been taken on lease.
(ii) As explained to us, the inventories were physically verified during the year by
the Management at reasonable intervals, except for inventories lying with third parties
where confirmations have been received by the management, and no material discrepancies
were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms,
Limited Liability Partnerships or other parties covered in the Register maintained under
Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013
in respect of grant of loans, making investments and providing guarantees and securities,
as applicable.
(v) According to the information and explanations given to us, the Company has not
accepted any deposit and hence reporting under paragraph 3(v) of the Order is not
applicable.
(vi) The maintenance of cost records has been specified by the Central Government under
section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records
maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended prescribed by the Central Government under sub-section (1) of Section 148 of
the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed
cost 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) According to the information and explanations given to us, in respect of
statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues,
including Provident Fund, Employees State Insurance, Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues in arrears as at 31 March, 2017 for a
period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Service Tax, Customs Duty, Excise Duty, and Value
Added Tax which have not been deposited as on 31 March, 2017 on account of disputes are
given below:
| Name of statute |
Nature of dues |
Forum where dispute is pending |
Period(s) to which the amount relates * |
Amount unpaid ( in crores) |
Amount paid under protest (Rs. in crores) |
| The Central Excise Act, 1944 |
Excise Duty |
Supreme Court |
2000-01 to 2015-16 |
214.27 |
40.31 |
|
|
High Court |
1997-98 to 2015-16 |
122.74 |
0.60 |
|
|
CESTAT |
1998-99 to 2015-16 |
249.68 |
40.22 |
|
|
Commissioner |
2002-03 to 2014-15 |
71.75 |
7.46 |
| The Custom Act, 1962 |
Customs Duty |
Supreme Court |
2002-03 to 2004-05 |
2.68 |
- |
|
|
High Court |
2002-03 to 2004-05 |
43.71 |
5.49 |
|
|
CESTAT |
1995-96 to 2014-15 |
304.68 |
19.39 |
|
|
Commissioner |
2008-09 to 2015-16 |
76.71 |
11.45 |
| The Tamil Nadu Value Added Tax Act, 2006 |
VAT |
Asstt. Commissioner |
2008-09 to 2009-10 |
16.11 |
9.00 |
| The Karnataka Value Added Tax Act, 2003 |
VAT |
Asstt. Commissioner |
2012-13 |
0.49 |
- |
| Chapter V of the Finance Act, 1994 |
Service Tax |
High Court |
2006 |
6.97 |
- |
|
|
CESTAT |
2004-05 to 2010-11 |
55.47 |
1.41 |
|
|
Commissioner |
2002-03 to 2014-15 |
39.84 |
2.68 |
| The Income Tax Act, 1961 |
Income Tax |
High Court |
2004-05 |
17.61 |
- |
*Period represents the earliest year to the latest year
There were no dues of Sales Tax and Cess which have not been deposited as at 31 March,
2017 on account of dispute.
(viii) In our opinion and according to the information and explanations given to us,
the Company has not defaulted in the repayment of loans or borrowings to financial
institutions, banks and government and dues to debenture holders.
(ix) In our opinion and according to the information and explanations given to us,
money raised by way of the term loans have been applied by the Company during the year for
the purposes for which they were raised or as per purposes revised with appropriate
approvals, other than temporary deployment pending application of proceeds. The Company
has neither raised any moneys by way of initial public offer / further public offer
(including debt instruments) nor were such proceeds pending to be applied, during the
current year.
(x) To the best of our knowledge and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the Company by its Officers
or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the
Company has paid/ provided managerial remuneration in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Companies
Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under paragraph 3(xii) of
the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us,
the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where
applicable, for all transactions with the related parties and the details of related party
transactions have been disclosed in the standalone Ind AS financial statements as required
by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures and hence reporting under
paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us,
during the year the Company has not entered into any non-cash transactions with its
directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not
applicable.
(xvi) The Company is not required to be registered under section 45-I of the Reserve
Bank of India Act, 1934.
|
For DELOITTE HASKINS & SELLS LLP |
|
Chartered Accountants |
|
(Firms Registration No. 117366W/ W-100018) |
|
A. Siddharth |
|
Partner |
| Mumbai, dated: 17 May 2017 |
(Membership No. 31467) |
+91-9892691696
