TO,
THE MEMBERS OF
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 Auditors 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 ICAIs 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:
Description of Key audit Matter |
Our response and results |
REVENUE |
Our key audit procedures to assess the recognition of revenue on sale of goods included the following: |
(Refer note 45) to the standalone Ind AS financial statements) | • We assessed the appropriateness of the Companys revenue recognition policies, including those related to discounts and incentives; |
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. | • We obtained an understanding of process and assessed the design, implementation and operating effectiveness of managements key internal controls in relation to revenue recognition from sale of goods. We also tested the Companys controls over timing of revenue recognition; |
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. | • 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 Companys 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 statements) | - Discussed disputed litigation matters with the companys management. |
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. | - Evaluated the managements judgment of tax risks, estimates of tax exposures, other claims and contingencies. Past and current experience with the tax authorities and managements correspondence/response including on the claims lodged by customers were used to assess the appropriateness of managements best estimate of the most likely outcome of each uncertain contingent liability. |
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. | - Critically assessed the entitys 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. |
We have considered Litigations and claims; a Key Audit Matter as it requires significant management judgement, including accounting estimates that involves high estimation uncertainty. | Conclusion: |
Based on the procedures described above, we did not find any material exceptions to the managements assertions and treatment, presentation & disclosure of the subject matter in the standalone Ind 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 Auditors Report Thereon
The Companys 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 auditors 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 Companys 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 Companys financial reporting process.
Auditors 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 auditors 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:
? 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 auditors 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
For, Parikh & Majmudar
Chartered Accountants
FRN - 107525W
[CA SATWIK DURKAL]
PARTNER
Place: Ahmedabad Membership No. 107628
Date: 29-05-2023 UDIN: 23107628BHAMTK2770
ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of S.A.L. STEEL LIMITED of even date)
With reference to the Annexure A, referred to in the Independent Auditors Report to the members of the Company on the Standalone IND AS financial statements for the year ended on 31st March 2023 , we report following :
(B) The Company has maintained proper records showing full particulars of intangible assets.
(b) The Company has not been sanctioned working capital in excess of the limit of 5 crores during any point of time of the year in aggregate from a bank & financial institutions on the basis of security of the current assets. Hence, reporting under clause 3(ii)(b) of the order is not applicable.
(b) (c), (d), (e) and (f) of the order are not applicable.
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.
According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, ESIC, income-tax, duty of customs, cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except Goods & Service Tax which have not been regularly deposited with appropriate authorities.
According to the information and explanation given to us no undisputed amounts payable in respect of provident fund, ESIC, income-tax, Goods & Service Tax, duty of customs, cess and other statutory dues were outstanding as at 31st March, 2023
for a period of more than six months from the date of becoming payable except dues for (1) deferred sales tax liability amounting to 135.78 lakhs (2) dues of value added tax (VAT) to the tune of 1607.21 lakhs.
(b) According to the information and explanations given to us, there are no material dues of Goods & Service Tax & Income Tax which have not been deposited with the appropriate authorities on account of any dispute. However ,according to information and explanations given to us, the following dues of Customs, Sales tax ,VAT ,Service Tax and Duty of Excise have not been deposited by the company on account of Dispute:
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 lakhs.) |
1 | Custom Act, 1962 | Custom Duty |
2011-12 |
Appellate Tribunal Ahmedabad | 50.00 |
2 | Custom Act, 1962 | Custom Duty |
2012-13 |
Appellate Tribunal Ahmedabad | 449.85 |
3 | Central Excise Act,1994 | Central Excise Duty |
2008-09 to 2010-2011 |
Supreme Court of India | 590.14 |
4 | Central Excise Act,1994 | Central Excise Duty | 2005-06 to Sept - 2014 | Central Excise Commissioner | 626.28 |
5 | Central Service Tax Act,1994 | Service Tax |
2016-17 & 2017-18 |
Deputy commissioner Audit Rajkot | 150.26 |
6 | Gujarat Value Added Tax Act 2003 | Value Added Tax |
2015-16 |
Jt. Value Added Tax Commissioner (Appeal) Rajkot | 478.81 |
7 | Gujarat Value Added Tax Act 2003 | Value Added Tax |
2016-17 |
Jt. Value Added Tax Commissioner (Appeal) Rajkot | 818.95 |
8 | Gujarat Value Added Tax Act 2003 | Value Added Tax |
2017-18 |
Jt. Value Added Tax Commissioner (Appeal) Rajkot | 238.74 |
9 | Gujarat Value Added Tax Act 2003 | Value Added Tax |
2012-13 |
Jt. Value Added Tax Commissioner (Appeal) Rajkot | 29.47 |
10 | Gujarat Value Added Tax Act 2003 | Value Added Tax |
2007-08 & 2008-09 |
Jt. Value Added Tax Commissioner (Appeal) Rajkot | 41.24 |
(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) during the year. Accordingly, clause 3(x)(b) of the Order is not applicable.
(b) We have considered the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.
( c) According to the information and explanations provided to us during the course of audit, the Group does not have any CICs.
xx In our opinion and according to the information and explanations give to us, there is no unspent amount under sub-section
(5) of Section 135 of the Companies Act,2013 pursuant to any project. Accordingly, clause 3(xx)(a) and (b) of the Order are not applicable.
For, Parikh & Majmudar
Chartered Accountants
FRN - 107525W
[CA SATWIK DURKAL]
PARTNER
Place: Ahmedabad Membership No. 107628
Date: 29-05-2023 UDIN: 23107628BHAMTK2770
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 3(f) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of S.A.L. STEEL LIMITED 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 S.A.L. STEEL LIMITED (the "Company") as of March 31, 2023 in conjunction with our audit of the standalone IND AS financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Management of the Company 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 (the "ICAI"). 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 Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements of the Company 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") issued by the ICAI 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 with reference to Standalone IND AS Financial Statement
A companys internal financial control with reference to standalone financial statements 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 standalone IND AS financial statements.
Inherent Limitations of Internal Financial Controls with reference to Standalone IND AS Financial Statement
Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to standalone financial statements were operating effectively as at March 31, 2023, based on the criteria for internal financial control over financial reporting 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 ICAI.
For, Parikh & Majmudar
Chartered Accountants
FRN - 107525W
[CA SATWIK DURKAL]
PARTNER
Place: Ahmedabad Membership No. 107628
Date: 29-05-2023 UDIN: 23107628BHAMTK2770
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.