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Impex Ferro Tech Ltd.

BSE: 532614 Sector: Metals & Mining
NSE: IMPEXFERRO ISIN Code: INE691G01015
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VOLUME 4610
52-Week high 2.50
52-Week low 1.06
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.20
CLOSE 1.22
VOLUME 4610
52-Week high 2.50
52-Week low 1.06
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Impex Ferro Tech Ltd. (IMPEXFERRO) - Auditors Report

Company auditors report

To

The Members of Impex Ferro Tech Limited

Report on the Financial Statements

We have audited the accompanying financial statements of M/S IMPEX FERRO TECH LIMITED("the Company") which comprises the Balance Sheet as at March 31 2016Statement of Profit and Loss and the Cash Flow Statement for the year ended on that dateand a summary of significant accounting policies and other explanatory information.

ManagementRs s Responsibility for the Financial Statements

The CompanyRs s Board of Directors is responsible for the matters stated in section134(5) of Companies Act 2013 (Rs Rs the ActRs Rs ) with respect to the preparation ofthese financial statements that give a true and fair view of the financial position financial performance and cash flow of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specifiedunder section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; select! on and applicati on ofappropriate account! ng policies; making judgments and esti mates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrol that were operating effectively for ensuring that accuracy and completeness ofthe accounting records relevant to the preparation and presentati on of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

AuditorRs s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provision of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovision of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditorRs sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments; the auditorconsiders internal control relevant to the CompanyRs s preparation and fair presentationof the financial statements in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by CompanyRs sDirectors as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India

(a) In the case of Balance Sheet of the state of affairs of the Company as at March 312016;

(b) In the case of statement of Profit & Loss of the loss of the Company for theyear ended on that date and

(c) In the case of Cash Flow Statement of the cash flows of the Company for the yearended on that date.

Emphasis of Matter

(a) We draw your attention to Note No. 39 of the Financial Statements which indicatethat as at March 31 2016 the accumulated losses amounting to Rs 14486.45 lacs haseroded the entire net worth of the Company indicating the existence of a materialuncertainty about the CompanyRs s ability to conti nue as a going concern. These financialstatements have been prepared on a going concern basis for the reasons stated in the saidnote.

(b) Pending confirmations of certain secured loans and advances trade receivablestrade payables and other liabilities as referred in Note No. 33 of accompanyingstatements are subject to confirmations and reconciliation.

Our report is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (AuditorRs s Report) Order 2016 (Rs the OrderRs )issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we enclose in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of written representations received from the Directors as on March 312016 and taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2016 from being appointed as a Director in terms of section 164 (2) ofthe Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"; and

(g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditorRs s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:

i. The Company has disclosed the impact of pending litigations on the financialposition in the Financial Statements - Refer Note - 29 (b) to (f) to its FinancialStatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred by the Company to theInvestor Education and Protection Fund.

For R. Kothari & Company
Chartered Accountants
FRN : 307069E
Manoj Kumar Sethia
Place : Kolkata Partner
Date : May 30 2016 Membership No. 064308

Annexure to the Independent Auditors Report

The Annexure referred to in paragraph 1 under the heading Rs Report on Other Legal& Regulatory RequirementRs of our report of even date to the financial statements ofthe Company for the year ended March 31 2016 we report that:

i. In respect of its fixed assets:

(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of the fixed assets.

(b) The fixed asset has been physically verified by the management during the year andno material discrepancies were noticed on such verification and the same have beenproperly dealt with in the books of accounts.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

ii. The inventories have been physically verified during the year by the management andthe discrepancies noticed on physical verification of stocks as compared to book recordswere not material and have been properly dealt with in the books of account.

iii. According to the information and explanations given to us the Company has notgranted loans to companies firms or other parties covered in the Register maintainedunder Section 189 of the Companies Act 2013; and therefore reporting under paragraph3(iii) of the Order is not applicable.

iv. In our opinion and according to the information and explanati on given to us theCompany has complied with provisions of section 185 and 186 of the Companies Act 2013 inrespect of loans and investments made.

v. The Company has not accepted any deposits from the public and consequently thedirectives issued by Reserve Bank of India and provisions of Section 73 to Section 76 orany other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules2015 with regard to the deposits accepted from the public are not applicable.

vi. We have broadly reviewed the books of accounts maintained by the Company in respectof manufacture of iron and Steel product and power generation unit pursuant to the rulesmade by the Central Government for the maintenance of cost records under section 148(1) ofthe Companies Act 2013 and we are of the opinion that prima facie the records have beenmaintained. We have not however made a detailed examination for the records with a view todetermine whether they are accurate & complete.

vii. In respect of statutory dues:

(a) According to the information & explanation given to us and on the basis ofexamination of the books of account the Company has generally been irregular indepositing undisputed statutory dues in respect of Provident Fund EmployeeRs s StateInsurance Income-tax Tax deducted at sources Professional Tax Service Tax Cess andother material statutory dues applicable to it with the appropriate authoriti es.Moreover the following statutory dues remain overdue as at March 31 2016:

SI. No. Nature of Dues Rs /Lacs
1 SERVICE TAX 40.42
2 TDS 19.77
3 PF ESI & OTHER DUES 5.27
TOTAL 65.46

According to the informati on and explanati ons given to us there were no undisputedamounts payable in respect of Income-tax Cess and other material statutory dues inarrears/were outstanding as at March 31 2016 for a period of more than six months fromthe date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Wealth tax Sales tax Value added tax Service tax Customs duty Excise dutyand Cess which have not been deposited with the appropriate authorities on account of anydispute except the following :-

Name of the statute Nature of Dues Financial Year Rs /Lacs Forum where Dispute is Pending
2005-06 12.36 Commissioner of Central Excise (Appeals) (III)
Central Excise Act 1994 Excise Duty 2005-06 and 2006-07 8.26 CESTAT Calcutta Bench
2006-07 0.50 Commissioner of Central Excise (Appeals) (IV)
2007-08 15.55 CESTAT Calcutta Bench
Total 36.67 Rs 20.92 Lacs paid under protest
Central Sales Tax and Local Sales Tax Act 2005-06 304.13 WBCT Appellate and Revisional Board
2006-07 479.91 WBCT Appellate and Revisional Board
VAT 2008-09 748.45 WBCT Appellate and Revisional Board
2009-10 211.18 Sr. Joint Commissioner of Commercial Taxes
Total 1743.67 Rs 104.56 Lacs paid under protest
W.B. Entry Tax Act Entry Tax 2012- 13 and 2013- 14 272.51 HonRs ble High Court of Calcutta
Total 272.51 Rs NIL paid under protest
Income Tax Act 1961 Income Tax 2011-12 1606.46 Commissioner of Income Tax (Appeals) Kolkata
Total 1606.46 Rs NIL paid under protest

viii. Based upon the audit procedures performed and according to the records of theCompany examined by us and the information and explanation given to us the Company hasdefaulted in payment of interest on borrowings to banks as follows

Particulars Amount of default as at 31st March 2016 (Rs in Lacs) Period of default Nature of Loan
Union Bank of India 12.09 January 2016 to March 2016 FITL
State Bank of India 10.75 March 2016 FITL
State Bank of Travancore 9.18 February 2016 & March 2016 FITL
Bank of Baroda 4.40 February 2016 & March 2016 FITL
Punjab National Bank 6.48 January 2016 to March 2016 FITL
State Bank of India 66.96 February 2016 & March 2016 CC
State Bank of Travancore 18.38 March 2016 CC
Bank of Baroda 38.39 February 2016 & March 2016 CC
Pubjab National Bank 19.81 January 2016 to March 2016 CC

ix. Based upon the audit procedures performed and the informati on and explanati onsgiven by the management the Company has not raised moneys during the year by way ofinitial public issue/follow-on offer (including debt instruments) and term loans.

x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that managerial remuneration has been paid/provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith schedule V to the Companies Act 2013.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore reporting under Paragraph 3 (xii) of the Orderare not applicable to the Company.

xiii. Based upon the audit procedures performed and the information and explanationsgiven by the management all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable account! ng standards and CompaniesAct 2013.

xiv. The Company has made preferential allotment of 63.35 lacs shares during the yearunder review. Based upon the audit procedures performed and the information andexplanations given by the management the requirement of Section 42 of the Companies Act2013 have been complied and the amount raised have been used for the purposes for whichthe funds were raised.

xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withDirectors or persons connected with him. Accordingly the reporting under Paragraph 3 (xv)of the Order is not applicable to the Company and hence not commented upon.

xvi. In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly reporting under Paragraph 3 (xvi)of the Order is not applicable to the Company and hence not commented upon.

For R. Kothari & Company
Chartered Accountants
FRN : 307069E
Manoj Kumar Sethia
Place : Kolkata Partner
Date : May 30 2016 Membership No. 064308

Annexure to the Independent Auditors Report

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofsub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s. IMPEXFERRO TECH LIMITED ("the Company") as of March 31 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

ManagementRs s Responsibility for Internal Financial Controls

The CompanyRs s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial report! ng criteriaestablished by the Company considering the essenti al components of internal controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (Rs ICAIRs ). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to CompanyRs s policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

AuditorsRs Responsibility

Our responsibility is to express an opinion on the CompanyRs s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by the Institute ofChartered Accountants of India and the Standards on Auditing prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditorRs s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the CompanyRs s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A CompanyRs s internal financial control over financial reporti ng is a processdesigned to provide reasonable assurance regarding the reliability of financial reporti ngand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companyRs s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transacti ons are recorded as necessary to permit preparati on of FinancialStatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorizati on ofmanagement and Directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompanyRs s assets that could have a material effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitati ons of internal financial controls over financialreport! ng including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporti ng may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For R. Kothari & Company
Chartered Accountants
FRN : 307069E
Manoj Kumar Sethia
Place : Kolkata Partner
Date : May 30 2016 Membership No. 064308