TO THE MEMBERS OF
IFGL REFRACTORIES LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of IFGL Refractories
Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2016,
the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and
a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Standalone Financial Statements that give a true and fair view of the Financial
Position, Financial Performance and Cash Flows of the Company in accordance with the
accounting principles generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate Internal Financial Controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the Financial Statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these Standalone Financial Statements
based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the Audit Report under the
provisions of the Act and the Rules made thereunder and the Order under Section 143(11) of
the Act.
We conducted our audit of the Standalone Financial Statements in accordance with the
Standards on Auditing specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the Financial Statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the Financial Statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
Financial Statements, whether due to fraud or error. In making those risk assessments, the
auditor considers Internal Financial Control relevant to the Companys preparation of the
Financial Statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness of the accounting
estimates made by the Companys Directors, as well as evaluating the overall presentation
of the Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Standalone Financial Statements.
Opinion
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 Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of affairs of the Company
as at 31st March 2016, and its Profit and its Cash Flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Financial Statements comply with the Accounting
Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the Directors as on 31st
March 2016 taken on record by the Board of Directors, none of the Directors is
disqualified as on 31st March 2016 from being appointed as a Director in terms of Section
164 (2) of the Act.
f) With respect to the adequacy of the Internal Financial Controls over Financial
Reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure A". Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Companys Internal Financial Controls over
financial reporting.
g) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our information and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its financial
position in its Financial Statements - Refer Notes 11.2 and 32(a) to the Financial
Statements.
ii. The Company did not have any long term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government in terms of Section 143(11) of the Act, we give in
"Annexure B" a Statement on the matters specified in paragraphs 3 and 4 of the
Order.
|
For DELOITTE HASKINS & SELLS |
|
Chartered Accountants |
|
(Firms Registration No. 302009E) |
|
A Bhattacharya |
| Kolkata |
Partner |
| 14th May 2016 |
(Membership No. 054110) |
Annexure A to the Independent Auditors Report
(Referred to in Paragraph 1(f) under Report on Other Legal and Regulatory
Requirements of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of
sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the Internal Financial Controls over Financial Reporting of IFGL
Refractories Limited ("the Company") as of 31st March 2016 in conjunction with
our audit of the Standalone Financial Statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Companys Management is responsible for establishing and maintaining Internal
Financial Controls based on the Internal Control over Financial Reporting criteria
established by the Company considering the essential components of Internal Control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the
"Guidance Note") issued by The Institute of Chartered Accountants of India.
These responsibilities include the design, implementation and maintenance of adequate
Internal Financial Controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to Companys Policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable Financial information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys Internal Financial
Controls over Financial Reporting based on our audit. We conducted our audit in accordance
with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of
the Companies Act, 2013, to the extent applicable to an audit of Internal Financial
Controls. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate Internal Financial Controls over Financial Reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the Internal Financial Controls system over Financial Reporting and their operating
effectiveness. Our audit of Internal Financial Controls over Financial Reporting included
obtaining an understanding of Internal Financial Controls over Financial Reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of Internal Control based on the assessed risk. The procedures
selected depend on the auditors judgement, including the assessment of the risks of
material misstatement of the Financial Statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide basis for our audit opinion on the Companys Internal Financial Controls System
over Financial Reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys Internal Financial Control over Financial Reporting is a process designed
to provide reasonable assurance regarding the reliability of Financial Reporting and the
preparation of Financial Statements for external purposes in accordance with generally
accepted accounting principles. A Companys Internal Financial Control over Financial
Reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of Financial Statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with authorisations of
Management and Directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
Companys Assets that could have a material effect on the Financial Statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of Internal Financial Controls over Financial
Reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the Internal Financial Controls over Financial
Reporting to future periods are subject to the risk that the Internal Financial Control
over Financial Reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the Company has, in all material respects, an adequate Internal Financial
Controls system over Financial Reporting and such Internal Financial Controls over
Financial
Reporting were operating effectively as at 31st March 2016, based on the Internal
Control over Financial Reporting criteria established by the Company considering the
essential components of Internal Control stated in the Guidance Note.
|
For DELOITTE HASKINS & SELLS |
|
Chartered Accountants |
|
(Firms Registration No. 302009E) |
|
A Bhattacharya |
| Kolkata |
Partner |
| 14th May 2016 |
(Membership No. 054110) |
Annexure B to the Independent Auditors Report
(Referred to in Paragraph 2 under Report on Other Legal and Regulatory Requirements
Section of our Report of even date)
i) a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of Fixed Assets.
b) The Company has a program of verification of Fixed Assets to cover all the items in
a phased manner over a period of 3 years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. Pursuant to the program,
certain Fixed Assets were physically verified by the Management during the year. According
to the information and explanations given to us, no material discrepancies were noticed on
such verification.
c) According to the information and explanations given to us and the records examined
by us and based on the examination of the registered conveyance deed provided to us, we
report that with respect to immovable properties of acquired Land that are Freehold, the
title deeds of such immovable properties are held in the name of the Company as at the
Balance Sheet date. In respect of immovable properties of Land that have been taken on
lease and disclosed as Fixed Asset in the Financial Statements, the lease agreements are
in the name of the Company, where the Company is the lessee in the agreement.
ii) As explained to us, the Inventories other than material lying with third parties
(which have substantially been confirmed) were physically verified during the year by the
Management at reasonable intervals and no material discrepancies were noticed on physical
verification.
iii) The Company has not granted any loans, secured or unsecured, to Companies, Firms,
Limited Liability Partnerships or other parties covered in the register maintained under
Section 189 of the Companies Act, 2013.
iv) In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the Companies Act,
2013 in respect of grant of loans, making investments and providing guarantees and
securities, as applicable.
v) According to the information and explanations given to us, the Company has not
accepted any deposit during the year and had no unclaimed deposits at the beginning of the
year as per the provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act, 2013.
vi) The maintenance of cost records has been specified by the Central Government under
Section 148(1) of the Companies Act, 2013 (for manufacture and sale of certain castable
materials).We have broadly reviewed the cost records maintained by the Company pursuant to
the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the
Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and
are of the opinion that, prima facie, the prescribed cost records have been made and
maintained. We have, however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
vii) According to the information and explanations given to us, in respect of Statutory
Dues :
a) The Company has generally been regular in depositing undisputed statutory dues,
including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues
applicable to it to the appropriate authorities.
b) There were no undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, Cess and other material statutory dues in arrears as at 31st March 2016 for a
period of more than six months from the date they became payable.
c) Details of dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty,
Value Added Tax and Cess which have not been deposited as on 31st March 2016 on account of
disputes are given below :
| Name of Statute |
Nature of Dues |
Forum where Dispute is pending |
Period to which the amount relates |
Amount involved (Rs in lacs) |
Amount unpaid (Rs in lacs) |
| Sales Tax Central Sales Tax Act, 1956 |
Sales Tax |
Sales Tax Tribunal |
1995-1996 |
5.14 |
1.14 |
|
Sales Tax |
Additional Commissioner of Sales Tax |
1997-1998 |
1.97 |
0.47 |
|
Sales Tax |
Orissa High Court |
1999-2000 |
2.17 |
2.17 |
|
Sales Tax |
Assistant Commissioner of Sales Tax |
2003-2004 |
0.25 |
0.25 |
|
Sales Tax |
Additional Commissioner of Sales Tax |
1st July 2006 to 31st March 2011 |
24.04 |
8.49 |
| Orissa Sales Tax Act, 1947 |
Sales Tax |
Orissa Sales Tax Tribunal |
1996-1997 and 1997-1998 |
39.91 |
39.91 |
|
Sales Tax |
Orissa High Court |
1999-2000 |
0.11 |
0.11 |
|
Total |
|
|
73.59 |
52.54 |
| Excise Duty and Service Tax Service Tax Rules,1994 |
Service Tax |
Joint Commissioner of Central Excise, Customs & Service Tax |
2006-2007 |
1.54 |
1.54 |
| Service Tax Rules,1994 |
Service Tax |
Commissioner of Central Excise (Appeals) |
2007-2008 |
1.66 |
1.66 |
|
Total |
|
|
3.20 |
3.20 |
| Income Tax The Income Tax Act, 1962 |
Income Tax Dues |
Commissioner of Income Tax (Appeals) |
Assessment Year 2012-2013 |
9.99 |
9.99 |
|
Total |
|
|
9.99 |
9.99 |
viii) In our opinion and according to the information and explanations given to us, the
Company has not defaulted in the repayment of loans and borrowings to any banks. The
Company has not taken any loans or borrowings from any financial institutions or
Government. The Company has not taken any loans or borrowings from Government or has
issued any debentures.
ix) The Company has not raised moneys by way of initial public offer or further public
offer (including debt instruments). In our opinion and according to the information and
explanations given to us, the Term Loans were applied for the purposes for which they were
raised.
x) To the best of our knowledge and according to the information and explanations given
to us, no fraud by the Company and no fraud on the Company by its officers or employees
has been noticed or reported during the year.
xi) In our opinion and according to the information and explanations given to us, the
Company has paid/provided Managerial Remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197 read with Schedule V to the Companies
Act, 2013 to the Chairman of the Company. In respect of the Managing Director of the
Company, the Company has paid/provided Managerial Remuneration in excess of the limits and
approvals prescribed under Section 197 read with Schedule V to the Companies Act, 2013 :
| Managerial Position |
Excess amount of Remuneration paid/provided (Rs in lacs) |
Financial Year ended |
Treatment of the excess Remuneration in the respective year Financial Statements |
Steps taken by the Company for securing refund |
| Managing Director |
17.48 |
31st March 2016 |
Shown as recoverable from the Managing Director [Note 21 - Short Term Loans and
Advances] |
The amount has been refunded back to the Company on 12th May 2016 |
xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the
Order is not applicable.
xiii) In our opinion and according to the information and explanations given to us the
Company is in compliance with Section 188 and Section 177 of the Companies Act, 2013,
where applicable, for all transactions with the related parties and the details of related
party transactions have been disclosed in the Financial Statements etc. as required by the
applicable accounting standards.
xiv) During the year the Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures and hence reporting under
clause (xiv) of the order is not applicable to the Company.
xv) In our opinion and according to the information and explanations given to us,
during the year the Company has not entered into any non cash transactions with its
directors or persons connected with them and hence provisions of Section 192 of the
Companies Act, 2013 are not applicable.
xvi) The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934.
|
For DELOITTE HASKINS & SELLS |
|
Chartered Accountants |
|
(Firms Registration No. 302009E) |
|
A Bhattacharya |
| Kolkata |
Partner |
| 14th May 2016 |
(Membership No. 054110) |
+91-9892691696
