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, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of
Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of material accounting policies and
other explanatory information (hereinafter referred to as the "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, 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 31,2026 and its losses, total comprehensive income, changes in equity and its cash flows for the year
ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Ind AS
Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us
is sufficient and appropriate to provide a basis for our opinion on the standalone IND AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone IND AS
financial statements of the current period. These matters were addressed in the context of our audit of the standalone IND AS financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters:
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Description of Key audit Matter
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Our response and results
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REVENUE (Refer note 23) to the standalone Ind AS
financial statements)
Revenue of the company comprises of sale of Sponge Iron
& Ferro alloys. The company sells its products directly to the
end use customers.
Revenue recognition is a significant audit risk across the company.
Specifically, there is a risk that revenue is recognized on sale of
goods before the control in the goods is transferred.
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Our key audit procedures to assess the recognition of revenue on
sale of goods included the following:
• We assessed the appropriateness of the Company's revenue
recognition policies, including those related to discounts
and incentives;
• We obtained an understanding of process and assessed
the design, implementation and operating effectiveness
of management's key internal controls in relation to
revenue recognition from sale of goods. We also tested the
Company's controls over timing of revenue recognition;
• We also tested, on a sample basis, whether specific revenue
transactions around the year end had been recognized
in the appropriate period on the basis of the terms of sale
of the contract, particularly with reference to the transfer
of control in the goods in question with regard to the year
end transactions.
We inspected key customer contracts/ purchase orders to identify
terms and conditions related to acceptance of goods and the
right to return and assessing the Company's revenue recognition
policies with reference to the requirements of the prevailing
accounting standards;
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Litigations and claims
(Refer note 31A) to the standalone Ind AS financial statements)
The cases are pending with multiple tax authorities like Service
tax, VAT, Income Tax, Excise, Goods and Service Tax & customs
and there are claims against the company which have not been
acknowledged as debt by the company.
In normal course of business, financial exposures may arise from
pending proceedings and from claims of the customers not
acknowledged as debt by the company. Whether a claim needs to
be recognized as liability or disclosed as contingent liability in the
standalone Ind AS financial statements is dependent on a number
of significant assumptions and judgments. The amounts involved
are potentially significant and determining the amount, if any,
to be recognized or disclosed in the standalone Ind AS financial
statements, is inherently subjective.
We have considered Litigations and claims; a Key Audit Matter
as it requires significant management judgement, including
accounting estimates that involves high estimation uncertainty.
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Our audit procedures, inter alia, included following:
- Discussed disputed litigation matters with the
company's management.
- Evaluated the management's judgment of tax risks,
estimates of tax exposures, other claims and contingencies.
Past and current experience with the tax authorities and
management's correspondence/response including on
the claims lodged by customers were used to assess the
appropriateness of management's best estimate of the most
likely outcome of each uncertain contingent liability.
- Critically assessed the entity's assumptions and estimates
in respect of claims, included in the contingent liabilities
disclosed in the standalone Ind AS financial statements. Also,
assessed the probability of negative result of litigation and
the reliability of estimates of related obligations.
Conclusion:
Based on the procedures described above, we did not find
any material exceptions to the management's assertions and
treatment, presentation & disclosure of the subject matter in the
standalone Ind AS financial statements.
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Emphasis of Matter
1. The balance confirmation from the suppliers, Non-Moving Banks and customers have been called for, but the same are
awaited till the date of audit. Thus, the balances of receivables, advance from customers, Non-Moving Banks and trade
payables have been taken as per the books of accounts submitted by the company and are subject to confirmation from
the respective parties. (Refer to Note No. 36 of Standalone IND AS Financial Statements).
2. During the year under review, the company has taken the stock of by-products lying at shop floor as part of Inventories
and consequently during the year under review, the company has written back consumption of by-products worth
' 1609.16 lakhs on the basis of physical verification of stock of by-products lying at the shop floor, and the same has been
shown as exceptional item in the profit and loss statement for the year ended on 31st March, 2026. (Refer to Note No. 42
of Standalone IND AS Financial Statements).
Our opinion is not modified on the above matter.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included
in the Annual Report, but does not include the standalone IND AS financial statements and our auditor's report thereon.
Our opinion on the standalone IND AS financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone IND AS financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone IND AS Financial Statements
The Company's management and Board of Directors are responsible for the matter stated in Section 134(5) of the act with respect to
the preparation and presentation of these Standalone Ind AS Financial Statements that gives a true and fair view of the state of affairs,
profit/loss and other comprehensive income, changes in Equity and cash flows of the Company in accordance with the applicable
Indian accounting standards (Ind AS) specified under Section 133 of the Act read with relevant rules issued thereunder and other
accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind
AS financial statements that give a true and fair view and are free from material misstatement, whether due. to fraud or error.
In preparing the standalone Ind AS financial statements, Board of Directors is responsible for assessing the Company's ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone IND AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone IND AS financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone IND
AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company
has adequate internal financial controls system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone IND AS financial statements, including the disclosures,
and whether the standalone IND AS financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by section 197(16) of the Act as amended, in our Opinion and to the best our information and according to the
explanations given to us, the remuneration paid by the company to its directors during the year is in accordance with the provisions
of section 197 of the Act read with Schedule V of the Act.
2. As required by the Companies (Auditor's Report) Order, 2020 (the "Order") issued by the Central Government in terms of Section
143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.
3. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit.
b) Except for the matter stated in Paragraph 3(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014, In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books.
c) The standalone Balance Sheet, the standalone Statement of Profit and Loss including Other Comprehensive Income,
standalone Statement of Changes in Equity and the standalone Statement of Cash Flows dealt with by this Report are in
agreement with the books of account.
d) In our opinion, the aforesaid standalone IND AS Financial statements comply with the Indian Accounting Standards specified
under section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2026 taken on record by the Board
of Directors, none of the directors is disqualified as on March 31,2026 from being appointed as a director in terms of Section
164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone IND AS Financial Statements
of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report
expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls
with reference to standalone Financial Statements.
g) The modification relating to the maintenance of accounts & other matters connected therewith, are stated at paragraph
3(b) above on reporting under section 143(3)(b) of the Act and paragraph 3(h)(vi) below on reporting under Rule 11(g) of the
companies (Audit and Auditors) Rules, 2014.
h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the
explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in the standalone Ind AS Financial
Statements (Refer Note No. 31-A to the Standalone Ind AS Financial Statements.)
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses.
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company.
(iv) (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Company to or in any other person or entity,
including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been received by the Company from any person or entity, including
foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii)
of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
(v) The company has not declared and paid any Interim divided nor has proposed any final dividend during the previous
year, and hence the question of Compliance and applicability of Section 123 of the Companies Act does not arise.
(vi) Based on our examination, which included test checks, the Company has used accounting software for maintaining
its books of accounts which has a feature of recording audit trail (edit log) facility and the same operated throughout
the year for all relevant transaction recorded in the software. Further, during the course of our audit, we did not come
across any instances of audit trail feature being tampered. The audit trail has been preserved by the Company as per the
statutory requirements for record retention.
However, in respect of Books of Accounts maintained at factory, the accounting software does not have the feature
of edit log and the same was not operated throughout the year for all relevant transactions recorded in the software,
hence question of preservation of back up of audit trail does not arise.
For, Parikh & Majmudar
Chartered Accountants
FRN-107525W
[CA SATWIK DURKAL]
PARTNER
Place: Ahmedabad Membership No. 107628
Date:29-05-2026 UDIN: 26107628WMNHMH4994
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