Steel Authority of India Ltd Auditor Reports

To the Members of Steel Authority of India Limited

Comments	Managements Replies
Report on the Audit of Standalone Financial Statements Quali_ed opinion
1. We have audited the accompanying standalone _nancial statements of STEEL AUTHORIT Y OF INDIA LIMITED (‘the Company), which comprise the Balance Sheet as at 31 March 2024, the Statement of Pro_t and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone _nancial statements, including material accounting policy information and other explanatory information, in which are included the returns for the year ended on that date audited by the branch auditors of the Companys branches/units/marketing regions as listed in Appendix 1.
2. In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of the reports of the branch auditors as referred to in paragraph 17 below, except for the e_ects of the matters described in the Basis for Quali_ed Opinion section of our report, the aforesaid standalone _nancial 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 (‘Ind AS) speci_ed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in I ndia, of the state of a_airs of the Company as at 31 March 2024, and its pro_t (including other comprehensive income), its cash _ows and the changes in equity for the year ended on that date.
Basis for Quali_ed Opinion 3. As referred in note 47.2(a)(i) to the accompanying standalone _nancial statements, the constitutional validity of the Entry Tax Act has been upheld by the Honble Supreme Court and the matters relating to levy of entry tax are now pending before regular benches of the Supreme Court/Jurisdictional High Courts/Commercial Tax Department /assigned authorities. Pending decision by the other aforesaid Courts, the management is of the view that no adjustment is required in the accompanying standalone _nancial statements of the Company for the disputed entry tax demand in various states amounting to _ 724.02 crore (net of _ 137.72 crore recognised as a liability basis ongoing settlement proceedings as explained in the said note) as on 31 March 2024. However, in the absence of su_cient appropriate evidence to support the managements view, we are of the opinion that a provision for entry tax liability should be recognised in the standalone _nancial statements.	The N ine Judge Bench of the Honble Supreme court, vide its order dated 11th November, 2016, upheld the Constitutional validity of the Entry tax legislations passed by the various States. However, the Bench directed that certain other matters raised by the Petitioner, such as matter relating to Entry tax on account of discriminatory rates resulting in entry tax liability amounting to _ 762.91 crore on ironOre and Coking Coal in Bhilai-D urg area @ 6% as compared to lower rate of 1% on Coking Coal and 3% on Iron ore in rest of the areas of Chhattisgarh, Entry tax amounting to _98.83 crore on goods entering into the local area of Jharkhand from other State etc. may be determined by regular benches hearing the matters. During the year, in the State of Chhattisgarh, applications were _led under settlement scheme (Chhattisgarh Settlement of Arrears of Tax, I nterest and Penalty Act, 2023) for settlement of Entry Tax dispute pertaining to rate discrimination. The disputed amount are _ 762.91 Crore for which the settlement amount of _137.72 crore as per scheme has been provided as on 31st March, 2024. Accordingly, various matters raised by SAIL are pending with Jurisdictional H igh Courts/assigned authorities/ Commercial Tax Department. Pending decision by the Courts, the disputed Entry Tax liabilities of _724.02 crore have been treated by the Company as Contingent Liability.

 

Comments Managements Replies

4. As referred in note 47.2(b) to the accompanying standalone _nancial Statements, The Companys view is that the cases are sub-judice current assets include advance of _ 587.72 crore paid under protest to Damodar and pending for adjudication before the various judicial Valley Corporation against the bills raised for supply of power for the period authorities for a long time. Further, the civil appeal _led 2010-11 to 2016-2017. The matter is under litigation and currently pending before by DVC pertaining to tari_ of 2004-09 against the Order Jharkhand State Electricity Regulatory Commission (JSERC) for _nalization of of the Appellate Tribunal for Electricity (APTEL), have been tari_. The management is of the view that the amount paid under protest is fully dismissed by the Honble Supreme Court of India vide its recoverable and thus, no adjustment is required in the accompanying standalone Orderdated3 rdDecember,2018.Accordingly,StateElectricity _nancial statements. However, in the absence of su_cient appropriate evidence to Regulatory Commission (SERC) will _nalise the retail tari_ as support the managements contention of recoverability of these balances, we are of directed by APTEL, the _nancial implication of which can only be ascertained after the Tari_ _xation by SERC. DVC the opinion that an allowance for possible non-recoverability of such advance should _led its Retail Tari_ A pplication in November, 2020 along be created in the accompanying standalone _nancial statements. with application for Annual Revenue Requirement before the Jharkhand State Electricity Regulatory Commission (JSERC) for the period 2006-07 to 2011-12 and also seeking adjustment of Revenue Gap/Surplus in the period of 2012- 13 to 2014-15. The Company has also _led their objections on 28th December, 2020 to the aforesaid Application of DVC. JSERC _nalised the Category-wise R etail Supply Tari_ of DVC for the period from FY 2006-07 to FY 2011-12 vide order dated 31stO ctober, 2023. However, DVC has preferred an appeal before Honble APTEL against the order of the JSERC regarding the consideration of non-tari_ income in totality in the tari_ order. APTEL vide its order dated 5th February, 2024 allowed the appeal of DVC with request to the commission to pass an order afresh at the earliest. The above disputed demands stated at (3) and (4), contested on valid and bona_de grounds, have been treated as contingent liabilities as it is not probable that present obligations exist as on 31st March, 2024. Therefore, there is no adverse impact on Pro_t for the year.

5. Impact of all the above quali_cations on the accompanying standalone _nancial statements for the year ended 31 March 2024 is as under: (Amounts in INR crore)

Particulars	Reported balances	As at 31st March 2024 Balances after impact of all the quali_cations which are quanti_ed
Other equity	50,000.01	49,018.41
Deferred tax liability	6,178.20	5,848.06
Other current assets	4,541.05	3,953.33
Other current liabilities	4,565.19	5,289.21

Our audit report on the standalone _nancial statements of the company for the year ended 31 March 2023 was also modi_ed in respect of above matters.

6. We conducted our audit in accordance with the Standards on Auditing speci_ed 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 (‘IC AI) together with the ethical requirements that are relevant to our audit of the _nancial statements under the provisions of the Act and the rules thereunder, and we have ful_lled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained together with the audit evidence obtained by the branch auditors, in terms of their reports referred to in paragraph 17 of the Other Matter section below is su_cient and appropriate to provide a basis for our quali_ed opinion.

Emphasis of matter

7. We draw your attention to the following matter: a. Note 49.2 to the accompanying standalone _nancial statements, which describes that the revenue from operations include sales to government agencies aggregating to _ 11,162.37 crore for the year ended 31 March 2024 (cumulative upto 31 March 2024 of _ 25,661.61 crore) which is recognized on the basis of provisional prices as per the terms if sales with such Government agencies. b. Note 49.15 to the accompanying standalone _nancial statements, regarding suspension of certain o_cers and employees of the Company basis directions from the Ministry of Steel, Government of India and related investigation to be conducted by external investigative agencies on certain matters relating to policy/pricing decisions of the Company. In view of the management, basis their internal assessment, the matter is not likely to have a material impact on the operations of the Company and/or these standalone _nancial statements. Our opinion is not modi_ed in respect of these matters.

Key Audit Matters

8. Key audit matters are those matters that, in our professional judgment, and based on the consideration of the reports of the branch auditors as referred to paragraph 17 below, were of most signi_cance in our audit of the standalone _nancial statements of the current period. These matters were addressed in the context of our audit of the standalone _nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

9. In addition to the matters described in the Basis for Quali_ed Opinion, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
1. Provision and contingent liabilities relating to ongoing litigations	Our audit procedures included, but were not limited to the following:
The Company is subject to a number of legal, regulatory and tax cases for which _nal outcome cannot be easily predicted and which could potentially result in signi_cant liabilities.
	Obtained understanding of the process of identi_cation and measurement of provisions and contingent liabilities relating to ongoing litigations implemented by the Management, through various discussions held with Companys legal and _nance personnel.
Managements disclosures with regards to provisions and contingent liabilities relating to ongoing litigations are presented in note 47.1 to the Companys Standalone Financial Statements. Refer note 3.15 for related material accounting policy information adopted by the Company.
	Evaluated the design and tested the operating e_ectiveness of the controls put in place by the management in relation to assessment of the outcome of the pending litigations.
The assessment of whether a liability is recognised as a provision or disclosed as a contingent liability in the standalone _nancial statements is inherently subjective and requires signi_cant management judgement in determination of the cash out_ows from the business, interpretation of applicable laws and regulations, and careful examination of pending assessments at various levels of regulatory authorities.
	Inspected the summary of litigation matters and discussed key developments during the year with the Companys Legal and Finance personnel.
Since the amounts involved are signi_cant and due to the range of possible outcomes leading to high estimation and uncertainty that requires signi_cant management and auditor judgement, this matter is considered to be a key audit matter for the current year audit.	Inspected and evaluated, where applicable, external legal and/ or regulatory advice sought by the Company. Obtained direct con_rmations from the dealing lawyers for certain material ongoing litigations.
	Discussed and challenged the managements assessment of the likelihood, magnitude and accounting of any liability that may arise in certain material cases.
	Accordingly, we reviewed the amount of provisions recognised and contingent liabilities disclosed in the standalone _nancial statements and exercised our professional judgment to assess appropriateness of such conclusions, involving experts as required.
	Evaluated the adequacy of disclosures made in the Companys standalone _nancial statements in accordance with the applicable accounting standards.

 

Key audit matter	How our audit addressed the key audit matter
2. Property, plant and equipment and intangible assets (including capital work in progress)	Our audit procedures included, but were not limited to the following:
	Obtained an understanding of the managements process of recording the transactions pertaining to capital expenditure incurred by the company and evaluated the accounting policies adopted by the company in accordance with the requirements of I nd AS 16 and Ind AS 38.
As at 31st March 2024 the Company has Property, Plant and Equipment (‘PPE), Intangible Asset (‘IA) and Capital Work-in-Progress (‘CWIP) with carrying value of _ 65,396.59 crore, _ 1488.84 crore, _ 6140.57 crore, respectively, as disclosed in note 4, note 7 and note 5 of the accompanying Standalone Financial Statements. Refer note 3.1 for the material accounting policy information adopted by the Company for recognition and measurement of such non-current assets.
	Evaluated the design and tested the operating e_ectiveness of the controls put in place by the management in relation to the above process.
	Tested the amounts capitalized during the year, on a sample basis, by inspecting supporting documents and evaluating whether assets capitalized satis_ed the recognition criteria and were recognized accurately in the correct periods and with correct amounts.
Determination of carrying values and their respective depreciation and amortisation amounts of PPE, IA and CWIP requires considerable management judgement. These include the decisions to capitalise or expense costs, the annual asset life review, the timeliness of the capitalisation of assets and the use of managements assumptions and estimates for the determination and measurement of assets retired from active use, in accordance with the requirements of Ind AS 16 – Property, Plant and Equipment (‘I nd AS 16) and Ind AS 38 – Intangible Assets (‘Ind AS 38).
	Reviewed the judgements made by management in determination of carrying values of the speci_ed non- current assets including the nature of underlying costs capitalized, determination of realizable value of the assets retired from active use, the appropriateness of useful lives applied in the calculation of depreciation as determined by technical assessment by management and external technical experts, where required, and evaluation of appropriateness of long standing CWIP balances pertaining to long-term projects.
The carrying value of CWIP also includes balances pertaining to long- term projects which requires careful examination of continuity and viability of such projects.
	Evaluated the appropriateness and adequacy of the related disclosures in the standalone _nancial statements in accordance with the applicable accounting standards.
Considering the signi_cance of amounts involved in the context of the balance sheet of the Company and the level of judgements and estimates required, we consider this to be a key audit matter in the current year audit.

3. By-products inventory Our audit procedures included, but Refer to note 3.7 of summary of were not limited to the following: material accounting policy information Obtained an understanding of the and other explanatory information for processes and procedures, including valuation of by-products amounting to controls relating to identi_cation of

_ 4938.11 crore as at 31^st March 2024 sub grade _nes, iron and steel scrap and signi_cant accounting judgements, embedded in BF slag and LD slag and estimates and assumptions related slime containing iron ore _nes (‘by-thereto and the note 3.21.4 of the products). standalone _nancial statements. Evaluated the accounting policy Inventories of by-products mainly adopted by the Company for valuation consist of sub-grade _nes, iron and of the by-product inventory in steel scrap embedded in BF slag and LD accordance with the requirements slag and slime, and tailings containing of Ind AS 2, Inventory in conjunction iron ore _nes, which are accumulated in with the EAC Opinions obtained by the stock piles. management.

Further, as explained in notes 49.10, In assessing managements assessment pursuant to the order of Ministry of of the value of byproducts, we discussed Mines, Government of India dated 16th in detail with the management to September 2019, certain by-products understand the procedures adopted were allowed to be sold and hence, in ascertaining the quantity and were valued for the _rst time in the quality (including gradation) of the by- previous years. products considered for valuation. The management of the Company also Managements estimate of the NRV sought the opinion of Expert A dvisory was veri_ed with reference to the Committee of the ICAI (‘EAC Opinions) average selling price (ASP) published on recognition and measurement of by the Indian Bureau of Mines. We by-product inventories. also obtained technical analysis Valuation of such items requires report from external experts sought management to exercise signi_cant by management for determining judgement in respect of use of the quantity of by- products and the estimates for determination of the chemical analysis report used by the quantity, quality and valuation rate of management for arriving at the quality these items. (including gradation) of _nes. Further, basis the expected future Obtained managements working of salability and plans for captive estimated future sales / consumption consumption of such by-product used for classi_cation of the by- inventories, the management has product inventory between current and classi_ed inventory expected to be non-current, and tested the underlying sold / consumed after 12 months from assumptions basis our understanding the date of balance sheet, being the of the processing and further approvals operating cycle of the Company, as required for sale of such inventory in non-current inventory. addition to evaluating managements estimates on availability of demand for Owing to the insigni_cant movement such by-products. in sales/consumption of such byproducts inventory, the materiality Evaluated the appropriateness and of the carrying value thereof and the adequacy of the related disclosures in complexities discussed above, we have the standalone _nancial statements considered this area as a key audit in accordance with the applicable matter in the current year audit. accounting standards.

Further, the managements assessment of classi_cation and valuation of aforesaid inventory as described in note 49.10 is considered fundamental to the understanding of the users of the standalone _nancial statements.

Information other than the _nancial statements and auditors report thereon

10. The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone _nancial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report. Our opinion on the standalone _nancial statements does not cover the other information and we will not express any form of assurance conclusion thereon. In connection with our audit of the standalone _nancial statements, our responsibility is to read the other information identi_ed above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone _nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual R eport, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those charged with Governance for the Standalone Financial Statements

11. The accompanying standalone _nancial statements have been approved by the Companys Board of D irectors. The Companys Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone _nancial statements that give a true and fair view of the _nancial position, _nancial performance including other comprehensive income, changes in equity and cash _ows of the Company in accordance with the Ind AS speci_ed under section 133 of the Act and other accounting principles generally accepted in I ndia. 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 _nancial controls, that were operating e_ectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the _nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

12. In preparing the standalone _nancial statements, the 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

13. The Board of D irectors are also responsible for overseeing the Companys _nancial reporting process.

Auditors responsibilities for the audit of the Standalone _nancial statements

14. Our objectives are to obtain reasonable assurance about whether the standalone _nancial 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 Standards on Auditing 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 in_uence the economic decisions of users taken on the basis of these standalone _nancial statements.

15. As part of an audit in accordance with Standards on Auditing, speci_ed under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is su_cient 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 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 _nancial controls with reference to standalone _nancial statements in place and the operating e_ectiveness of such controls;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

Conclude on the appropriateness of Board of Directors 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 signi_cant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the _nancial 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 auditors 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 financial statements, including the disclosures, and whether the _nancial statements represent the underlying transactions and events in a manner that achieves fair presentation; and

Obtain sufficient appropriate audit evidence regarding the financial statements/

_nancial information of the Company and its branches/units/marketing regions or the business activities within the Company to express an opinion on the _nancial statements. We are responsible for the direction, supervision and performance of the audit of _nancial statements of the Company and such branches/units/marketing regions included in the _nancial statements, of which we are the independent auditors. For the other branches/units/marketing regions included in the _nancial statements, which have been audited by the branch auditors, such branch auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

16. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signi_cant audit _ndings, including any signi_cant de_ciencies in internal control that we identify during our audit.

17. 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.

18. From the matters communicated with those charged with governance, we determine those matters that were of most signi_cance in the audit of the _nancial 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 bene_ts of such communication.

Other Matters

19. We did not audit the annual _nancial statements/_nancial information of 11 branches/units/marketing regions included in the standalone _nancial statements of the Company whose annual _nancial statements/_nancial information re_ects total assets of _ 64,560.81 crore as at 31 March 2024, and the total revenues of _ 40,094.16 crore, total net loss after tax of _ 49.65 crore, total comprehensive loss of _ 109.03 crore, and cash _ows (net) of _ 4.29 crore respectively for the year ended on that date, as considered in the standalone _nancial statements. These annual _nancial statements/_nancial information have been audited by the branch auditors whose reports have been furnished to us by the management, and our opinion on the standalone _nancial statements, in so far as it relates to the amounts and disclosures included in respect of branches, and our report in terms of sub-section (3) of section 143 of the Act in so far as it relates to the aforesaid branches, is based solely on the report of such branch auditors. Our opinion above on the standalone _nancial statements, and our report on other legal and regulatory requirements below, are not modi_ed in respect of the above matters with respect to our reliance on the work done by and the reports of the branch auditors.

20. The standalone _nancial statements of the Company for the year ended 31 March 2023 were audited jointly by the predecessor auditors, M/s Tej R aj & Pal, M/s S.

Jaykishan, M/s Walker Chandiok & Co. LLP and M/s K A S G & Co., who have expressed a quali_ed opinion on those standalone _nancial statements vide their audit report dated 25^th May 2023.

Report on Other legal and Regulatory Requirements

21. Based on our audit, and on the consideration of the reports of the branch auditors as referred to in paragraph 17 above, we report that the provisions of section 197 read with Schedule V to the Act are not applicable to the Company since the Company is a Government company as de_ned under section 2(45) of the Act. Accordingly, reporting under section 197(16) is not applicable.

22. As required by the Companies (Auditors Report) Order, 2020 (‘the Order) issued by the Central Government of I ndia in terms of section 143(11) of the Act we give in the

Annexure I a statement on the matters speci_ed in paragraphs 3 and 4 of the Order, to the extent applicable.

23. Further to our comments in Annexure I, as required by section 143(3) of the Act based on our audit, and on the consideration of the reports of the branch auditors as referred to in paragraph 17 above, we report, to the extent applicable, that: (a) We have sought and except for the matters described in the Basis for Quali_ed Opinion section, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone _nancial statements; (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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us, except for the e_ects of the matters described in the Basis for Quali_ed Opinion section and except for the matters stated in paragraph 21(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and A uditors) Rules, 2014 (as amended).

(c) The reports on the accounts of the branch o_ces of the Company audited under section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;

(d) The standalone _nancial statements dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us; (e) Except for the e_ects of the matters described in the Basis for Quali_ed Opinion section, in our opinion, the aforesaid standalone _nancial statements comply with Ind AS speci_ed under section 133 of the Act; (f) The provisions of section 164(2) of the Act are not applicable to the Company since the Company is a Government company as de_ned under section 2(45) of the Act; (g) The quali_cation/modi_cation relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 3 of the Basis for Quali_ed Opinion section, paragraph 21(b) above on reporting under section 143(3)(b) of the A ct and paragraph 21(i)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended); (h) With respect to the adequacy of the internal _nancial controls with reference to standalone _nancial statements of the Company as on 31 March 2024 and the operating e_ectiveness of such controls, refer to our separate report in Annexure II wherein we have expressed an unmodi_ed opinion; and (i) 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 and based on the consideration of the reports of the branch auditors as referred to in paragraph 17 above: i. Except for the e_ects of the matters described in paragraph 3 of the Basis for Quali_ed Opinion section, the Company, as detailed in note 47.1 to the standalone _nancial statements, has disclosed the impact of pending litigations on its _nancial position as at 31 March 2024; ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2024; iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024 except _ 1.00 crore pertaining to unclaimed matured deposits which was required to be deposited in the Investor Education and Protection Fund during the year ended 31^st March 2018 and which has not been deposited till 31^st March 2024; iv. (a) The management has represented that, to the best of its knowledge and belief, as disclosed in note 51.7(a) to the standalone _nancial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (‘the 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 identi_ed in any manner whatsoever by or on behalf of the Company (‘the Ultimate Bene_ciaries) or provide any guarantee, security or the like on behalf the Ultimate Bene_ciaries; (b) The management has represented that, to the best of its knowledge and belief, as disclosed in note 51.7(b) to the standalone _nancial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘the 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 identi_ed in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Bene_ciaries) or provide any guarantee, security or the like on behalf of the Ultimate Bene_ciaries; and (c) Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement. v. The interim/_nal dividend paid by the Company during the year ended 31 March 2024 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend .

As stated in note 49.16 to the accompanying standalone _nancial statements, the Board of Directors of the Company have proposed _nal dividend for the year ended

31 March 2024 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

Managements Replies

The matured deposit have already been claimed by the successors/relatives of the individuals but is pending for submission of document of proof of legal heir by the claimants. Appropriate procedure is being followed for refunding the matured deposit to the legal heirs.

Comments vi. Based on our examination which included test checks except for the instance mentioned below, the Company, in respect of _nancial year commencing on 1 April 2023, have used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same have been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with, other than the consequential impact of the exception given below.

Nature of exception noted	Details of Exception
Instances of accounting software for maintaining books of account which did not have a feature of recording audit trail (edit log) facility	The audit trail feature of certain accounting software used for maintaining books of accounts of two plants does not have a feature of recording audit trail (edit log) facility.
Instances of accounting software for maintaining books of account for which the feature of recording audit trail (edit log) facility was not operated throughout the year for all relevant transactions recorded in the software	The audit trail feature was not enabled at the database level for certain accounting software for corporate o_ce, one unit, _ve marketing regions and seven plants to log any direct data changes, used for maintenance of all accounting records by these corporate o_ce/unit/marketing regions/plants.

24. As required by section 143(5) of the Act, we give in ‘Annexure III, a statement on the matters speci_ed in the directions issued by the Comptroller and Auditor General of India in respect of the Company.

Managements Replies

Audit trail facility is implemented in one of the Plants in Q1 2024-25 and will be implemented shortly in the 2^nd Plant also.

The matter is under review for necessary action in the current year.

Date: 20th May 2024

Place: New Delhi

Annexure 1 referred to in Paragraph 20 of the Independent Auditors Report of even date to the members of Steel Authority of India Limited on the Standalone Financial Statements for the year ended 31^st March 2024

Comments

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and based on the consideration of the reports of the branch auditors, and to the best of our knowledge and belief, we report that: (i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment, capital work-in-progress, investment property and relevant details of right-of-use assets except in respect of certain lands where area and location needs to be updated in the _xed assets register. Further, the area in respect of these lands need to be reconciled with the records of the authorities in the respective States and wherein, as informed to us by the management, the delay is due to procedural matters involved. (B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a regular programme of physical veri_cation of its property, plant and equipment, capital work-in-progress, investment property and relevant details of right-of-use assets under which the assets are physically veri_ed 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. I n accordance with this programme, certain property, plant and equipment, investment property and relevant details of right-of-use assets were veri_ed during the year and no material discrepancies were noticed on such veri_cation/ material discrepancies were noticed on such veri_cation which have been properly dealt with in the books of account. However, there are certain land and buildings which are under encroachment / unauthorised occupation and hence, were not subjected to physical veri_cation.

(c) The title deeds of all the immovable properties (including investment properties) held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in Note 4,4a and 48.1(B) to the standalone _nancial statements, are held in the name of the Company, except for the following properties, for which the Companys management is in the process of getting the registration in the name of the Company:

Description of property	Gross carrying value ( in Cr)	Held in name of	Whether promoter, director or their relative or employee	Period since held	Reason for not being held in name of company
Freehold land	0.11	Asam Silimnaite & Bharat Refractories Ltd.	No	11-02-1976 & 30-04-1978	NA
Freehold land	0.01	Asian Refractories	No	05-04-1963	Rehabilitation on behalf of Dept. of Industries. Govt. of Bihar
Freehold land	0.02	Government of West Bengal	No	1963	Pending registration
Freehold land	0.08	Government of West Bengal	No	1956-57	Pending receipt " R ecord of Rights" ( ROR ) from State Government. As informed matter taken up with the said Government
Freehold land	0.13	India Firebricks & I nsulation Company Ltd.	No	15.09.1960	NA

Managements Replies

Necessary action is being taken to update location and extent of area in respective plants in _xed assets register. This is a continuous process.

Necessary action is being taken to evict the occupants from land and building under encroachment/unauthorized occupation.

Freehold Land	126.24	Jharkhand State Government	No	From 1960	MOU signing formalities awaited between Jharkhand state Government and SAIL/Bokaro Steel Plant.
Freehold land	7.55	Tamil Nadu State Government	Not Applicable	1972-1980	Land was acquired by private land owners by Tamil Nadu State Government and land owned by State Government was also transferred to Salem Steel Plant. Title Deed has not been executed for the land acquired but Land Records of State Government, these land are registered in the name of Salem Steel Plant.
Freehold Land	0.06	South Western Railways	No	31.03.1984 to reporting date	The speci_ed land belongs to Railways. Now the lane is jointly used by TATA, KSIDC and SAIL The matter jointly taken up with railways for demarcation and registration.
Freehold Land	10.29	Various parties	No	1986-2008	Mutation is pending, Disputed
Freehold Land	0.09	Various parties	No	1954-1974	Mutation is pending, Disputed
Freehold Land	0.13	Triveni Structural Limited- Allahabad	No	25-02-1970	Pending registration
Building	0.28	Ashok Sankat Bhatnagar (HUF)	No	01-08-2019	Pending registration

For properties where the Company is a lessee, the lease arrangements have been duly executed in favour of the Company except in following cases:

Description of property		Right- of- Use Asset Value	Location			Details of Lessor	Period held
Leasehold Land		0.20	Ranchi			Mecon Ltd.	Since 1979-80
Leasehold Land		147.81	Rourkela			Uttar Pradesh State I ndustrial Development Corporation U ( PSIDC)	01-02-2009
Leasehold Land		75.26	Rourkela			Government of Odisha	01-10-1959
Leasehold Land		0.10	Rourkela			Government of Odisha	01-10-1959
Leasehold Land		15.81	Rourkela			Government of Odisha	29-11-1957
Leasehold Land		16.80	Kolkata			K olkata Port Trust	07-05-2014
Leasehold Land		11.97	Vishakhapatnam			Vizag Seaport Pvt Limited	27-07-2004
Leasehold Land	0.91			Jammu	Jammu & Kashmir Govt			05-07-1968
Leasehold Land	0.67			Kanpur	Kanpur Development Authority			1986
Leasehold Land	23.04			Kolkata	Kolkata Metropolitan Development Authority			09-10-2009
Leasehold Land	0.38			Kolkata	Paradip Port Trust			17-08-2019

(d) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets during the year.

(e) No proceedings have been initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property TransactionsAct, 1988 (as amended) and rules made thereunder. (ii) (a) The management has conducted physical veri_cation of inventory at reasonable intervals during the year, except for goods-in-transit and inventory lying with third parties. In our opinion, the coverage and procedure of such veri_cation by the management is appropriate and no discrepancies of 10% or more in the aggregate for each class of inventory were noticed as compared to book records. I n respect of inventory lying with third parties, these have substantially been con_rmed by the third parties and in respect of goods-in-transit, these have been con_rmed from corresponding receipt and/or dispatch inventory records. (b) A s disclosed in Note 51.5 to the standalone _nancial statements, the Company has been sanctioned a working capital limit in excess of _ 5 crores by banks based on the security of current assets. The quarterly statements, in respect of the working capital limits have been _led by the Company with such banks and such statements are in agreement with the books of account of the Company for the respective periods which were subject to review, except for the following:

Name of the Bank / _nancial institu- tion	Working capital limit sanc- tioned	Nature of current assets offered as security	Quarter	Infor- mation disclosed as per return	Infor- mation as per books of ac- counts	Differ - ence	Remarks
Consor- tium of banks led by State Bank of India	10,000	Stock and Trade Re- ceivables	30th June 2023	37,586	33,794	3,792	As in- formed to us by the manage- ment, the informa- tion to the banks was provided based on provisional numbers
			30th Sep- tember 2023	33,008	31,521	1487
			31st Decem- ber 2023	34,560	36,073	(1513)
			31st March 2024	40,272	40,955	(683)

(iii) The Company has not made any investment in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, _rms, Limited Liability Partnerships (LLPs) or any other parties during the year. A ccordingly, reporting under clause 3(iii) of the Order is not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act in respect of investments made and guarantees and security provided by it, as applicable. Further, the Company has not entered into any transaction covered under section 185 of the Act.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there are no amounts which have been deemed to be deposits within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

(vi) The Central Government has speci_ed maintenance of cost records under sub-section (1) of section 148 of the Act in respect of the products of the Company. 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 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii)(a) In our opinion, and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities by the Company, though there have been slight delays in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues referred in sub-clause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following: (_ crore)

Name of the statute	Nature of Dues	Gross Amount	Amount Paid under protest	Period to which the amount relates	Forum where dispute is pending
Central Excise Act 1944	Excise Duty	250.39	1.5	2000-2002 2011-2016 2019-2020	Supreme Court
		38.43	-	1997-1998 2000-2012	High Court
		2,601.75	43.50	1999-2019	Tribunal
		52.00	0.59	1988-2018	Commis- sioner (Appeal)
		2,761.91 1.56	1.19 -	1993-1994 2004-2018 2001-04	Commis- sioner Assistant Commis- sioner
CG Municipal Corpora- tion Act, 1956	Consolidated tax	0.72	0.72	2001-2010	High Court
Chat- tisgarh Upkar (San- sodhan) Adhini- yam, 2004	Consolidated tax	2.77	0.15	2021-2022	High Court
	Entry devel- opment Cess	254.45	-	2006-2007	Supreme Court
		235.71	235.71	2006-2023	High Court
Employee provided fund act	Employees Provident Fund	2.3	-	1966-2019	Tribunal
Employee State In- surance	Employees State Insur- ance	67.85	-	1990 1999-2007	Employees State I nsur- ance Court
Entry Tax Laws	Entry tax	2,653.85	1,538.81	2008-2018	High Court
		164.92	108.16	2004-2017	Tribunal

 

		99.79	-	2010-11 2014-15	Additional Commis- sioner Appeals
		115.02	21.35	2006-2008 2010 2013-14	Additional commissioner
Finance Act	Service tax	19.94	-	2004-2005	High Court
		92.90 18.31	1.41 0.21	2011-2022 2002-2023	Tribunal Commis- sioner (Appeal)
		0.25	-	2014-2018	Commis- sioner
Forest Conserva- sion Act 1980	Royalty	96.28	96.28	2017-18	High Court
		36.77	0.95	2017-2018	High Court
		32.26	1.49	2017-2022	Commis- sioner(Ap- peal)
		0.72	-	2017-2018	Commis- sioner
		5.48	-	2017-2023	Additional commis- sioner
		4.68	-	2017-2018	Assistant Commis- sioner
		0.04	-	2022-23	AO
		4.64	-	2019-20	To be _led
HP Entry Tax Act, 2010	Entry tax	2.47	0.25	2010-11	Commis- sioner (Appeal)
Income tax Act, 1961	Income tax	1,45.92	-	1988-2012	High Court
		7,24.31	38.35	2010-2013	ITAT
		9,73.23	-	2014-2021	Commis- sioner (Appeal)
		60.81	-	2013-14	CIT
		40.94	-	2005-06, 2013-14, 2017-18	AO
Jharkand Entry Tax	Entry tax	98.83	-	2001-2002, 2012-2018	High Court
Odhisa Entry tax, 1999	Entry tax	18.97	-	2005-2010	Commis- sioner of Sales tax
Others	Arbitration	0.26	-	2013	Civil Court
	Civil case	9.41	-	2009-2010	High Court
		2.39	-	2001-2016	Department

 

	Chennai Metropolitan Development Authority dues	1.17	-	1986-2018	High Court
	Employee perks	6.01	-	2007-2008	High Court
	Forest Development tax	5.01	-	2010-2011	Supreme Court
		2.5	-	2003-2004	Tribunal
	Municipal corporation	2.20	-	2008	High Court
	Octroi	21.77	-	F.Y. 1992-93 to 1999-2000	High Court
	Miscella- neous	3.14	-	Various	Civil Court
	Royalty	0.17	-	2003	Civil Court
	Stamp Duty	2,320.4	-	1990-2013	High Court
	Terminal tax	1.99	-	2001-02	High Court
	Transit Pass	154.15	128.52	2001-02, 2022-23	High Court
Property tax	Property tax	1,289.97	-	2015-2023	High Court
Sales tax laws	Sales tax and VAT	3.09	-	1989-1992	Supreme Court
		338.01	13.13	1989-1993, 1996-1998, 2008-2016	High Court
		624.97	56.00	1987-2017	Tribunal
		114.05	53.88	1984-1985, 1987-1994, 1998-1999, 2000-2001, 2005-2014	Commissioner (Appeal)
		3.82	2.46	1994-1996 2005-2007 2009-2013 2016-2018	Additional Commissioner Appeals
		10.44	1.40	1987-1988 2008-2020	Commissioner
		11.94	1.64	Various Years	Joint commissioner
		1.62	0.22	1998-2000	Additional commissioner
		0.08	-	2017-2018	Assessing o_cer
The Customs Act 1962	Custom Duty	1.65	-	2008	High Court
		8.89	-	2009-2010 2017-2021	Tribunal
		11.18	-	2023-2024	Commissioner (Appeal)

 

U ttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007	Entry tax	0.71	-	2008-2014	High Court
		10.31	-	2009-2013	Tribunal
		0.83	-	2013-2014	Commissioner (Appeal)

(viii) According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been previously recorded in the books of accounts. (ix) (a) According to the information and explanations given to us, the Company has not defaulted in repayment of its loans or borrowings or in the payment of interest thereon to any lender. (b) According to the information and explanations given to us including con_rmations received from banks/_nancial institution and other lenders and representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaulter by any bank or _nancial institution or government or any government authority. (c) In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained. (d) I n our opinion and according to the information and explanations given to us, and on an overall examination of the _nancial statements of the Company, funds raised by the Company on short term basis have, prima facie, not been utilised for long term purposes. (e) According to the information and explanations given to us and on an overall examination of the _nancial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. (f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

(x) (a) The Company has not raised any money by way of initial public o_er or further public o_er (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(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 (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company. (xi) (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no fraud on the Company has been noticed or reported during the period covered by our audit. (b) According to the information and explanations given to us including the representation made to us by the management of the Company, no report under sub-section 12 of section 143 of the Act has been _led by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014, with the Central Government for the period covered by our audit. (c)A ccording to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year. (xii) The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) I n our opinion and according to the information and explanations given to us, all transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. Further, the details of such related party transactions have been disclosed in the standalone _nancial statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures speci_ed in Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system which is commensurate with the size and nature of its business as required under the provisions of section 138 of the Act except that the documentation of the testing performed by the internal audit function needs to be enhanced.

(b) We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

(xv) According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and accordingly, reporting under clause 3(xv) of the Order with respect to compliance with the provisions of section 192 of the Act are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the R eserve Bank of

India Act, 1934. Accordingly, reporting under clauses 3(xvi)(a), (b) and (c) of the Order are not applicable to the Company.

(xvii) The Company has not incurred any cash losses in the current _nancial year as well as the immediately preceding _nancial year.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3(xviii) of the O rder is not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of the _nancial ratios, ageing and expected dates of realisation of _nancial assets and payment of _nancial liabilities, other information in the standalone _nancial statements, our knowledge of the plans of the Board of Directors and management and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

(xx) (a) A ccording to the information and explanations given to us, there are no unspent amounts towards Corporate Social Responsibility pertaining to other than ongoing projects as at end of the current _nancial year. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable to the Company.

(b) A ccording to the information and explanations given to us, the Company has transferred the remaining unspent amounts towards Corporate Social R esponsibility (CSR) under sub-section

(5) of section 135 of the Act, in respect of ongoing project, within a period of 30 days from the end of _nancial year to a special account in compliance with the provision of sub-section (6) of section 135 of the Act, (xxi) The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone _nancial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

Date: 20th May 2024

Place: New Delhi

Annexure 2 to the Independent Auditors Report on Standalone Financial Statements of Steel Authority of India Limited for the year ended 31^st March 2024

Independent auditors report on the internal _nancial controls with reference to the _nancial statements under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (‘the Act)

1. In conjunction with our audit of the standalone _nancial statements of Steel Authority of India Limited (‘the Company) as at and for the year ended 31 March 2024, we have audited the internal _nancial controls with reference to _nancial statements of the Company as at that date.

Responsibilities of management and those charged with governance for internal _nancial controls

2. The Companys Board of Directors is responsible for establishing and maintaining internal _nancial controls based on the internal _nancial controls with reference to _nancial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of I nternal 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 _nancial controls that were operating e_ectively for ensuring the orderly and e_cient conduct of the Companys business, including adherence to the 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 _nancial information, as required under the Act.

Auditors responsibility for the audit of the internal _nancial controls with reference to _nancial statements

3. Our responsibility is to express an opinion on the Companys internal _nancial controls with reference to _nancial statements based on our audit. We conducted our audit in accordance with the Standards on A uditing issued by the I nstitute of Chartered Accountants of India (‘ICAI) prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal _nancial controls with reference to _nancial statements, and the Guidance Note on Audit of Internal Financial Controls O ver Financial Reporting (‘the Guidance Note) issued by the IC AI. 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 _nancial controls with reference to _nancial statements were established and maintained and if such controls operated e_ectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal _nancial controls with reference to _nancial statements and their operating e_ectiveness. Our audit of internal _nancial controls with reference to _nancial statements includes obtaining an understanding of such internal _nancial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating e_ectiveness 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 _nancial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained and the audit evidence obtained by the branch auditors in terms of their reports referred to in the Other matter paragraph below, is su_cient and appropriate to provide a basis for our audit opinion on the Companys internal _nancial controls with reference to _nancial statements .

Meaning of internal _nancial controls with reference to _nancial statements

6. A companys internal _nancial controls with reference to _nancial statements is a process designed to provide reasonable assurance regarding the reliability of _nancial reporting and the preparation of _nancial statements for external purposes in accordance with generally accepted accounting principles. A companys internal _nancial controls with reference to _nancial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly re_ect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of _nancial 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 e_ect on the _nancial statements.

Inherent limitations of internal _nancial controls with reference to _nancial statements

7. Because of the inherent limitations of internal _nancial controls with reference to _nancial 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.A lso, projections of any evaluation of the internal _nancial controls with reference to _nancial statements to future periods are subject to the risk that the internal _nancial controls with reference to _nancial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal _nancial controls with reference to _nancial statements and such controls were operating e_ectively as at 31 March 2024, based on the internal _nancial controls with reference to _nancial statements 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 I ndia.

Other matter

9. We did not audit the internal _nancial controls with reference to _nancial statements in so far as it relates to 11(eleven) branches/units/marketing regions whose _nancial statements/_nancial information re_ect total assets of _ 64,560.81 crore as at 31 March 2024, and total revenues of _ 40,094.16 crore, total net loss after tax of _ 49.65 crore, and total comprehensive loss of _ 109.03 crore and cash _ows(net) of _ 4.29 crore for the year then ended, as considered in the standalone _nancial statements. The internal _nancial controls with reference to _nancial statements in so far as it relates to such branches/ units/ marketing regions have been audited by the branch auditors, whose reports have been furnished to us by the management, and our report on the adequacy and operating e_ectiveness of the internal _nancial controls with reference to _nancial statements for the Company under section 143(3)(i) of the Act, in so far as it relates to these branches/units/marketing regions, is based solely on the audit report of such branch auditors.

O ur opinion is not modi_ed in respect of the this matter with respect to our reliance on the work done by and the reports of the branch auditors.

Date: 20th May 2024

Place: New Delhi

Annexure 3 to the Independent Auditors Report On Standalone Financial Statements of Steel Authority of India Limited for the year ended 31^st March 2024

Matters as required to be reported as per the directions issued by the Comptroller and Auditor General of India under sub section 5 of section 143 of the Companies Act, 2013.

Based on the veri_cation of records of the company and information and explanations given to us by the branch auditors, we report that:

Direction under section 143(5) of the Companies Act 2013

Matters	Auditors Comment
1. Whether the Company has a system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the _nancial implications, if any, may be stated.	The Company has installed SAP software for processing accounting transactions at _ve integrated plants, Central marketing Organization and Corporate o_ce. In respect of other plants/units/mines etc, the company uses legacy software systems.
	Further, based on our audit and on audit reports received from the auditors of branch o_ces, wherever the accounting transactions are processed through IT systems based on workings outside IT system, no instances of lack of integrity of accounts and no _nancial implications has been noted/ reported.
2. Whether there is any restructuring of an existing loan or cases of waiver/write-o_ of debts/loans/ interest etc., made by a lender to the Company due to the Companys inability to repay the loan? If yes, the _nancial impact may be stated	As per information and explanations given to us by the management, there was no restructuring of an existing loan or cases of waiver/ write o_ of debts/loans/interest etc., made by a lender to the company due to the Companys inability to repay the loan.
3. Whether funds received/ receivable for speci_c schemes from Central/State agencies were properly accounted for/utilised as per its terms and conditions? List the cases of deviation.	No funds were received or are receivable for speci_c schemes from the Central/State agencies during the year.
Date: 20th May 2024
Place: New Delhi