Steel Authority of India : Statement of Standalone Audited Financial Results for the Quarter and Year ended 31st March, 2022

STEEL AUTHORITY OF INDIA LIMITED

CIN: L27109DL1973GO1006454

REGISTERED OFFICE: ISPAT BHAWAN, LODI ROAD, NEW DELHI - 110 003

Tel: [phone], Fax: [phone], E-mail: [e-mail], Website: www.sail.co.in

STANDALONE STATEMENT OF ASSETS AND LIABILITIES

		(₹ crore)
	STANDALONE
	As at	As at
Particulars	31.03.2022	31.03.2021
	Audited	Audited
ASSETS
(1) Non-current assets
(a) Property, plant and equipment	68362.72	64115.26
(b) Capital work-in-progress	4016.72	8878.48
(c) Right of use assets	3834.04	2054.13
(d) Investment property	1.06	1.09
(e) Intangible assets	1459.35	1429.28
(f) Inventories	4559.16	4236.26
(g) Financial assets
(i) Investments	1624.49	1595.01
(ii) Loans	559.54	636.45
(iii) Other financial assets	239.00	453.99
(h) Current tax assets (net)	294.19	216.78
(i) Other non-current assets	4117.13	1566.81
Total non-current assets	89067.40	85183.54
(2) Current assets
(a) Inventories	19569.31	15272.04
(b) Financial assets
(i) Trade receivables	4736.83	8138.84
(ii) Cash and cash equivalents	59.76	468.40
(iii) Bank balances other than (ii) above	588.07	212.12
(iv) Loans	43.10	36.42
(v) Other financial assets	1340.51	1477.32
(c) Other current assets	2322.16	4926.74
	28659.74	30531.88
Assets classified as held for sale	14.00	17.01
Total current assets	28673.74	30548.89
TOTAL ASSETS	117741.14	115732.43
EQUITY AND LIABILITIES
(1) Equity
(a) Equity share capital	4130.53	4130.53
(b) Other equity	47886.61	39364.35
Total equity	52017.14	43494.88
(2) Non-current liabilities
(a) Financial liabilities
(i) Borrowings	8135.81	17906.57
(ia) Lease liabilities	3606.41	1819.39
(ii) Trade payables
(a) total outstanding dues of micro and small enterprises	-	-
(b) total outstanding dues of creditors other than micro
and small enterprises	-	-
(iii) Other financial liabilities	1390.28	1231.07
(b) Provisions	5331.02	4525.89
(c) Deferred tax liabilities (net)	5259.93	1253.16
(d) Other non-current liabilities	2682.82	439.97
Total non-current liabilities	26406.27	27176.05
(3) Current liabilities
(a) Financial liabilities
(i) Borrowings	5249.84	17701.46
(ia) Lease liabilities	292.04	249.16
(ii) Trade payables
(a) total outstanding dues of micro and small enterprises	140.65	103.57
(b) total outstanding dues of creditors other than micro
and small enterprises	16777.36	7938.49
(iii) Other financial liabilities	11610.62	10889.11
(b) Other current liabilities	4076.75	6127.81
(c) Provisions	1170.47	2039.84
(d) Current tax liabilities (net)	-	12.06
Total current liabilities	39317.73	45061.50
TOTAL EQUITY AND LIABILITIES	117741.14	115732.43

Steel Authority of India Limited
Standalone Cash Flow Statement		(₹ crore)
		For the year ended	For the year ended
		31st March, 2022	31st March, 2021
A. CASH FLOW FROM OPERATING ACTIVITIES
	Profit before tax	16038.72	6879.03
	Adjustments for:
	Depreciation and amortisation expenses	4274.17	4102.00
	Loss on disposal of fixed assets (net)	21.71	37.74
	Interest income	(279.11)	(267.97)
	Dividend income	(192.99)	(160.81)
	Finance costs	1606.92	2822.61
	Unrealised loss/(gain) on foreign exchange fluctuations	90.96	(5.47)
	Gain on sale of non-current investments	(0.08)	(4.47)
	Allowance for doubtful debts, loans and advances	98.24	92.69
	Other allowances	258.60	169.26
	Unclaimed balances and excess allowances written back	(351.50)	(283.10)
	Operating Profit before working capital changes	21565.64	13381.51
	Changes in assets and liabilities:
	Trade receivables	3315.92	1617.86
	Loans, other financial assets and other assets	288.22	746.40
	Trade payable	8875.95	1715.02
	Other financial liabilities and other liabilities	2046.07	1760.83
	Provisions	(176.33)	102.00
	Inventories	(4868.26)	4094.62
	Cash flow from operating activities post working capital changes	31047.21	23418.24
	Income tax paid (net)	(83.61)	(22.36)
	Net cash flow from operating activities (A)	30963.60	23395.88
B CASH FLOWS FROM INVESTING ACTIVITIES
	Purchase of property, plant & equipment (including capital	(3852.18)	(3709.63)
	work-in-progress) and intangibles
	Proceeds from sale/disposal of property, plant & equipment	235.71	143.11
	Purchase of current and non-current investments	(4.53)	9.53
	Movement in fixed deposits (net)	(737.40)	(2.30)
	Interest received	190.75	125.45
	Dividend received	192.99	160.81
	Net cash used in investing activities (B)	(3974.66)	(3273.03)
C CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from long-term borrowings (net)	(9770.76)	(14793.27)
	Lease liabilities	(186.23)	(115.48)
	Proceeds from short-term borrowings (net)	(12451.62)	(1541.72)
	Finance cost paid	(1922.09)	(2944.36)
	Dividend paid	(3066.88)	(413.05)
	Net cash used in financing activities (C)	(27397.58)	(19807.88)
D
Net change in cash and cash equivalents (A+B+C)	(408.64)	314.97
	Cash and cash equivalents at the beginning of the year	468.40	153.43
	Cash and cash equivalents at the end of the year	59.76	468.40

The cash flow statement has been prepared using the Indirect Method as set out in Ind AS-7, Statement of Cash Flows. The accompanying notes are an integral part of these standalone financial statements.

STEEL AUTHORITY OF INDIA LIMITED

CIN: L27109DL1973GO1006454

REGISTERED OFFICE: ISPAT BHAWAN, LODI ROAD, NEW DELHI - 110 003

Tel: [phone], Fax: [phone], E-mail: [e-mail], Website: www.sail.co.in

Statement of Standalone Audited Financial Results for the Quarter and Year ended 31st March, 2022

₹ crore unless stated otherwise

				STANDALONE
			Quarter ended		Year ended
Sl. No.	Particulars	31st March,	31st December,	31st March,	31st March,	31st March,
2022	2021	2021	2022	2021
		Audited	Unaudited	Audited	Audited	Audited
1	Income
	(a) Revenue from operations	30758.10	25245.92	23286.00	103473.32	69110.02
	(b) Other income	452.07	248.97	320.06	1042.03	1011.69
	Total Income	31210.17	25494.89	23606.06	104515.35	70121.71
2	Expenses
	a) Cost of materials consumed	14537.41	13283.76	6496.86	42776.46	23136.17
	b) Changes in inventories of finished goods, work-in-progress	2011.91	(2065.87)	642.48	(284.99)	4268.58
	and by-products
	c) Employee benefits expense	3030.08	3712.34	4070.84	12846.24	10445.94
	d) Finance costs	440.11	315.80	540.40	1697.88	2817.14
	e) Depreciation and amortisation expenses	1143.77	1048.71	1157.65	4274.17	4102.00
	f) Other expenses	6847.44	6905.25	5922.93	26813.46	18531.28
	Total Expenses	28010.72	23199.99	18831.16	88123.22	63301.11
3	Profit before Exceptional items and Tax	3199.45	2294.90	4774.90	16392.13	6820.60
	Add / (Less): Exceptional items	10.51	(363.92)	(166.44)	(353.41)	58.43
4	Profit before Tax	3209.96	1930.98	4608.46	16038.72	6879.03
	Less: Tax expense
	Current tax	-	-	11.57	-	12.05
	Deferred tax	791.66	487.88	1153.09	4023.68	3016.96
	Total tax expense	791.66	487.88	1164.66	4023.68	3029.01
5	Net Profit for the period	2418.30	1443.10	3443.80	12015.04	3850.02
	Other Comprehensive Income (OCI)
A	(i) Items that will not be reclassified to profit or loss	50.90	(173.62)	357.44	(87.22)	374.16
	(ii) Income tax relating to items that will not be reclassified to	(12.58)	43.92	(89.73)	22.77	(93.63)
	profit or loss
6	Total Comprehensive Income for the period	2456.62	1313.40	3711.51	11950.59	4130.55
7	Paid-up Equity Share Capital (face value of ₹ 10/- each)	4130.53	4130.53	4130.53	4130.53	4130.53
8	Reserves excluding revaluation reserve				47886.61	39364.35
9	Earnings per equity share (of ₹10/- each) (not annualised)
	1. Basic (₹)	5.85	3.49	8.34	29.09	9.32
	2. Diluted (₹)	5.85	3.49	8.34	29.09	9.32
10	Debt Equity Ratio				0.33	0.87
11	Debt Service Coverage Ratio (number of times)				1.53	0.36
12	Interest Service Coverage Ratio (number of times)				9.56	2.86
Note:	Refer accompanying notes to the financial results.

Notes to Standalone Financial Results:

1. The above results have been reviewed and recommended by the Audit Committee and approved by the Board of Directors in their meetings held on 23rd May, 2022.

2. The financial results have been audited by the Statutory Auditors as required under Regulation 33 and 52 read with regulation 63 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. The Audited Accounts are subject to review by the Comptroller and Auditor General of India under section 143(6) of the Companies Act, 2013.

3. The figures for the quarter ended 31st March, 2022 and 31st March, 2021, represent the derived figures between the audited figures in respect of the full Financial Year and the published year to date figures up to the 3rd quarter of the Financial Years ended 31st March, 2022 and 31st March, 2021 respectively.

4. The Company is in the business of manufacturing of steel products and hence has only one

reportable operating segment as per Ind AS 108 "Operating segments".

5. As per the terms of sales with certain Government agencies, the invoicing to these agencies is done at provisional prices, till a final price is subsequently agreed. The revenue recognized on aforementioned provisional prices basis is as under :

					₹ in crore
Quarter	Financial	Cumulative	Quarter	Financial	Cumulative
ended 31st	Year ended	till 31st	ended 31st	Year ended	till 31st
March,	31st March,	March,	March,	31st March,	March,
2022	2022	2022	2021	2021	2021
1808.94	6237.41	21163.29	1566.75	6902.50	14952.22

6. During the year ended 31st March, 2022, the Company has implemented the Salaries & wages revision effective from 1st April, 2020 after the expiry of long term wage agreement on 31st December, 2016. Accordingly, Employees Benefit Expenses charged to Statement of Profit and Loss and Expenditure during Construction (net off of provision for wage revision) for the Year ended 31st March, 2022 are ₹837.25 crore and ₹4.24 crore respectively. Further, an amount of ₹567.66 Crore has been charged to the statement of profit and loss on account of revised actuarial valuation of employees related liabilities owing to implementation of wage revision.

7. (A). In relation to a case pending before the Hon‟ble Delhi High Court in respect of an award by Arbitral Tribunal, the Company is now contemplating out of court settlement. Accordingly an amount of ₹353.41 crore has been charged under exceptional item in the Statement of Profit and Loss for the year ended 31st March, 2022.

(B) Exceptional items during the previous year ended 31st March, 2021 include :

(i) Compensation on Voluntary Retirement of employees paid as per the Scheme amounting to ₹103.70 crore.

(ii) Deposit under the Settlement of Dispute, 2020 Scheme brought by Directorate of Commercial Taxes, Government of West Bengal for settling entry tax and sales tax disputes in the State of West Bengal amounting to ₹167.54 crore.

(iii) Reversal of write down due to Covid-19 impact on inventory of sub grade iron ore fines amounting to ₹329.67 crore recorded during the year ended 31st March, 2020 under "Exceptional Items‟.

8. The inventory of sub-grade iron ore fines generated at the captive mines of the Company were not assigned any value in the books of accounts of the Company till the financial year ended 31st march 2019, since, the Government of India Notification dated 19 September 2012 prohibited all captive miners from selling such sub-grade fines.

Following the Government of India Order no. F.No.16/30/2019-M.VI dated 16 September 2019allowing sale of sub-grade iron ore fines, the inventories of sub-grade fines held by the Company gained economic value. In this regard, the Company also obtained opinions from the Additional Solicitor General of India as well as the Expert Advisory Committee (EAC) of Institute of Chartered Accountants of India (ICAI). Based on the aforesaid opinions, the Company recognized these inventories as by-product inventory as at 31st march 2020. Since, these inventories were generated over many years, hence, making it impracticable to ascertain the actual valuation, the Company assigned a valuation to such inventories basis average selling price of similar sub-grade fines over the last 36 months as declared by Indian Bureau of Mines (IBM), a Government of India organisation and as adjusted for royalty and other selling costs.

The Company has obtained all clearances including environmental clearance and clearance from Director General of Mines Safety, Government of India. Further, procedural clearances have been obtained from the State Government of Odisha. With respect to the State of Jharkhand, the delay in the clearances is procedural and the management expects to receive the clearances soon. This is also supported by the legal opinion taken by the Company in this regard.

As a result, the management has been able to sell off such inventories in certain locations. While, on an overall basis during the current and the previous year, there has been insignificant movement (1.04 million tonnes) in the volume of such inventories, there is significant market demand for sub- grade fines and the recent sales price trends are indicative of considerable margins over and above the carrying value of such inventories. The management also has plans to set up a beneficiation plant in future that will consume significant volume of sub-grade fines annually. Accordingly, in view of the management, there is no adjustment required in the carrying value of these inventories at this stage.

Considering the substantial volume of inventories, the quantity estimated to be sold / consumed within the next one year has been recognized as current and the balance has been classified as non- current inventory (refer notes 7A and 15).

As at 31st March 2022, the Company is carrying sub-gradeiron-ore fines inventory of 41.94 Mt (as at 31st march 2021: 42.60 Mt) valuing ₹4034.95 crores (as at 31st march 2021 valuing ₹4089.03 crores) which includes 39.24 Mt valued at ₹3786.62 crores classified as non-current inventory at its various mines.

Likewise, the Company at its Barsua and Dalli Mines is also carrying inventory of tailings of 7.44 Mt (as at 31st March 2021: 8.68 Mt) valuing ₹382.66 crores (as at 31st March 2021 valuing ₹492.41 crores) which includes 6.41 Mt valued at ₹331.25 crores classified as non-current inventory as at 31st march 2022. Further, the Company at its Bhilai, Bokaro, Rourkela and Durgapur Steel Plants is also carrying inventory of extractable iron and steel scrap embedded in BF Slag and LD Slag of 0.49 Mt (as at 31st March 2021 : 0.57 Mt) valuing ₹ 507.10 crores (as at 31st March 2021 valuing ₹438.63 crores) which includes 0.44 Mt valued at ₹ 441.29 crores classified as non-current inventory as at 31st march 2022. The Company is formulating a detailed plan for disposal / consumption of these inventories.

Considering the market volatility, steel market dynamics, possibility of future additions to steel and pellet making capacity in the country which may augment the demand of these materials, the carrying value of the non-current inventories need not be adjusted for any unforeseeable changes