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India Glycols Ltd.

BSE: 500201 Sector: Industrials
NSE: INDIAGLYCO ISIN Code: INE560A01015
BSE LIVE 15:43 | 23 Aug 164.05 3.25
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NSE 15:44 | 23 Aug 164.20 3.35
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OPEN 163.40
PREVIOUS CLOSE 160.80
VOLUME 17116
52-Week high 211.00
52-Week low 96.00
P/E 12.47
Mkt Cap.(Rs cr) 508
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 163.40
CLOSE 160.80
VOLUME 17116
52-Week high 211.00
52-Week low 96.00
P/E 12.47
Mkt Cap.(Rs cr) 508
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

India Glycols Ltd. (INDIAGLYCO) - Auditors Report

Company auditors report

TO THE MEMBERS OF INDIA GLYCOLS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of India GlycolsLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions 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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view

in order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating 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.

Basis for Qualified Opinion

Attention is invited to:

(a) Note No. 33 (A)(i) and 33(A)(ii) of the standalone financial statements regardingNon-provision against diminution in the value of investment and inter corporate deposit(including accrued interest Rs950.65 Lacs and total amount as stated in said note) made ina subsidiary M/S Shakumbari Sugar and Allied Industries Limited (SSAIL) and net worth ofSSAIL had been fully eroded where in the opinion of management no provision fordiminution in value is necessary considering the long term nature and the intrinsic valueof the assets of subsidiary company and direction issued by the HonRsble Board forIndustrial and Financial Reconstruction for preparation of revival scheme by the operatingagency as stated in the said note.

Also attention is drawn for Non-provision against advance to SSAIL of amounting to Rs8453.81 Lacs and against corporate guarantee extended of amounting to Rs 10845.38 Lacs(P.Y. 12045.43 Lacs) on behalf of SSAIL for loan facility availed by SSAIL (excludingpenal interest penalty etc.) from Financial Institutions and Banks (as stated in Note no.28 A.(iii)& 33(A) (iii)).

Our Audit Report on the standalone financial statements for the year ended March 312015 was also qualified in respect of the above matters.

(b) Note No. 33 (B) of the standalone financial Statement regarding Non-provisionagainst total exposure of amounting to Rs 14774.64 Lacs (including Investment ofRs 125Lacs) in a subsidiary IGL Finance Limited (IGLFL) where the management is confidentabout its recoverability for the reasons as stated in the said note and our inability tocomment thereon. Our Audit Report on the standalone financial statements for the yearended March 31 2015 was also qualified in respect of the above matter.

Further Attention is drawn to:

Regarding matters stated under para (a) & (b) above read with note no. 33(C) ofthe standalone financial statements regarding reinstatement/suitably rectify the auditedfinancial statements attention is drawn.

Net loss for the year investments loans & advances and reserve & surplus arewithout considering impact of the above which could not be ascertained or otherwise forthe

reason stated in as above. Our opinion was also qualified in respect of mattersreported in para (a) & (b) above on the standalone financial statements for the yearended 31st March 2015.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the "Basisfor Qualified Opinion" paragraph above the aforesaid standalone financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of the affairs of the Company as at 31st March 2016 andits loss and its cash flows for the year ended on that date.

Emphasis of Matters

Attention is drawn to the following:

(a) Note no. 36 (a) of audited standalone financial statements for the year ended 31stMarch 2016 regarding pending receipts of necessary approvals as stated in note forprovision made of amounting to Rs 14167.57 Lacs (including made in earlier yearsof Rs 13421.55 Lacs) for special discount on account of steep fall in prices.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to usduring the course of audit we give in the Annexure RsARs a statement on the mattersspecified in the paragraphs 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) Except for the effect of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have beenkept 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 Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) The matter described in the basis for qualified opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31 stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2016 from being appointed as a director interms of Section 164 (2) of the Act.

(g) As required by section 143(3)(i) of the Companies Act 2013 and based on thechecking of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us our separate report withrespect to the adequacy of the Internal Financial Controls over Financial Reporting of theCompany and the operating effectiveness of such controls is as per Annexure RsBRs.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its standalone financial statements - Refer Note No. 28A(i) 31 32 &33(A)(iii) to the standalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts. Refer Note No. 50(C)(b) & 50(C)(c) to the standalone financialstatements.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For LODHA & CO.
Chartered Accountants
Firm's Registration No. 301051E
(N.K. LODHA)
Place: Noida Partner
Date: 26th May 2016 Membership No. 85155

Annexure - A to the Auditors' Report Annexure referred to in paragraph 1 under theheading "Report on other legal and regulatory requirements" of our report ofeven date on the Standalone Financial Statements of India Glycols Ltd. for the year ended31st March 2016

1. (a) The Company has maintained proper records

showing full particulars including quantitative details and situation of fixed assetsexcept in case of certain locations where records are in process of updation/compilation.

(b) As per information & explanation given to us the fixed assets have beenphysically verified by the Management. As explained to us there is regular programme ofphysical verification once in every three years in phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its fixed assets.The discrepancies noticed on such physical verification were not material.

(c) As per the records and information and explanations given to us title deeds ofimmovable properties (fixed assets) are held in the name of the Company (read withfootnote of note no 11).

2. The inventory of the Company (except stock in transit which have been verified basedon subsequent receipt/reconciliation) has been physically verified by the management atreasonable intervals and the procedures of physical verification of inventory followed bythe Management are reasonable and adequate in relation to the size of the Company andnature of its business. The company is maintaining proper records of inventory. Thediscrepancies noticed on such physical verification of inventory as compared to bookrecords were not material.

3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Accordingly we are not offering any comment onthe provisions of Clause 3(iii) (a) (b) & (c) of the Order. (This is to be read withnote no. 45(iv)(j))

4. According to the information explanations and representations provided by themanagement and based upon audit procedures performed we are of the opinion that inrespect of loans investments guarantees and security the Company has complied

with the provisions of the Section 185 and 186 of the Companies Act 2013.

5. In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 of the Act or any other relevant provisions of the Act andthe rules framed there under (to the extent applicable) with regard to deposits acceptedfrom the public. According to the information and explanation given to us no order hasbeen passed by the Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any Court or other Tribunal in this regard.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules specified by the Central Government for the maintenance of cost records underSection 148(1) of the Act in respect of the Company's products to which the said rules aremade applicable and are of the opinion that prima facie the prescribed records have beenmade and maintained. We have however not made a detailed examination of the said recordswith a view to determine whether they are accurate or complete.

7. (a) According to the records of the Company the

Company is generally regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax duty of custom duty of excise value added tax cess and other materialstatutory dues to the appropriate authorities to the extent applicable and there are noundisputed statutory dues payable for a period of more than six months from the date theybecome payable as at 31 st March 2016.

(b) According to the records and information and explanations given to us there are nomaterial dues in respect of Income Tax or cess that have not been deposited with theappropriate authorities to the extent applicable on account of any dispute and dues inrespect of Duty of Custom Service Tax Duty of Excise VAT & Sales Tax that have notbeen deposited with appropriate authority on account of dispute and the forum where thedispute is pending are given below:-

Nature of Statue Nature of Dues Amount (Rs In Lacs) Period Forum
Custom Custom Duty 11.42 1992-93 U.T High Court
Custom Duty 193.05 2004-05 2009-10 Assistant Commissioner Customs
Custom Duty 196.85 2005-06 CESTAT
Custom Duty 763.77 2004-05 2010-11 Commissioner Customs (Appeals)
Duty Drawback 15.86 2006-07 Joint Secretary Department of Revenue
Finance Act ServiceTax 172.66 2010-11 to 2015-16 Commissioner LTU - KSP
1994 ServiceTax 2.20 2010-11 to 2015-16 Assistant Commissioner LTU -Ahmedabad
ServiceTax 8.09 2005-06 to 2008-09 2010-11 Assistant/Deputy Commissioner LTU - GKP
ServiceTax 36.31 2004- 08 CESTAT

 

Nature of Statue Nature of Dues Amount (Rs In Lacs) Period Forum
Central Excise Cenvat Credit 11.75 2007-08 to 2012-13 Commissioner Appeal LTU - KSP
Act Cenvat Credit 7.50 2011-12 to 2013-14 Additional Commissioner LTU - KSP
Cenvat Credit 15.82 2010-11 to 2013-14 Additional Commissioner LTU- GKP
Cenvat Credit 8.68 2013-14 2014-15 Assistant/Deputy Commissioner LTU - GKP
Cenvat Credit 36.53 2010-11 to 2013-14 Commissioner Appeals LTU - GKP
Cenvat Credit 6.39 2010-11 to 2011-12 Commissioner Appeals Allahabad
Cenvat Credit 10.86 2011-12 2012-13 Commissioner LTU - GKP
Cenvat Credit 66.97 2006-07 to 2008-09 Commissioner LTU - KSP
Cenvat Credit 0.22 2013-14 Superintendent - LTU- GKP
Excise Duty 19.60 2008-09 to 2013-14 Additional Commissioner LTU - KSP
Excise Duty 922.57 2007-08 to 2011-12 CESTAT
Excise Duty 4183.63 2010 - 2011 Commissioner LTU - KSP
Excise Duty 2.56 2013-14 Joint/Additional Commissioner LTU - KSP
Excise Duty 53.07 2005-06 to 2008-09 Joint Secretary GOI New Delhi
UP VAT Act Sales Tax 8.39 2008-09 2009-10 2011-12 Additional Commissioner

8. I n our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loans orborrowings to financial institutions banks government (both State and Central) or duesto debenture holders.

9. On the basis of information and explanations given to us the Company did not raiseany money by way of public offer or further public offer (including debt instruments)during the year and term loans raised were applied for the purposes for which the loanswere obtained except pending utilization have been temporarily parked in the currentassets/deposits with banks.

10. Based on the audit procedure performed and on the basis of information andexplanations provided by the management no material fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the course of theaudit.

11. On the basis of records and information and explanations made available and basedon the examination of the records of the Company managerial remuneration which has beenpaid or provided is in accordance with the requisite approvals mandated by Section 197read with Schedule V to the Act.

12. The Company is not a chit fund or a nidhi /mutual benefit fund /society andtherefore the provisions of clause 3 (xii) of the said Order are not applicable to theCompany.

13. As per the information and explanations and records made available by themanagement of the Company and audit procedure performed for the related parties

transactions entered during the year the Company has complied with the provisions ofSection 177 and 188 of the Act where applicable. As explained and as per records /details of such related parties transactions have been disclosed in the financialstatements as required by the applicable accounting standards.

14. According to the information and explanations given to us and based on theexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully / partly convertible debentures duringthe year in terms of provisions of Section 42 of the Act.

15. On the basis of records made available to us and according to information andexplanations given to us and based on the examination of the records of the Company theCompany has not entered into non-cash transactions with the directors or persons connectedwith him. Accordingly paragraph 3(xv) of the order is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 as the provision of section is not applicable to the Company.

For LODHA & CO.
Chartered Accountants
Firm's Registration No. 301051E
(N.K. LODHA)
Place: Noida Partner
Date: 26th May 2016 Membership No. 85155

ANNEXURE RsBRs TO THE INDEPENDENT AUDITOR's REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF INDIA GLYCOLS LIMITED

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 IndiaGlycols Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (RsICAIRs). 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 Company'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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'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 ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively 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 auditor's judgement 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 Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 limitations of internal financial controls over financialreporting 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 reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion read with the matters described below under Emphasis of MatterstheCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2016 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

Emphasis of Matter

Attention is drawn to:

According to the information and explanations given to us the company has adequateinternal financial controls system over financial reporting however the company needs tofurther strengthen its internal control system over financial reporting regarding balanceconfirmation (Read with note no. 36) to be made the same commensurate with size and natureof business and our comments under RsBasis of QualificationRs in our main report.

Our opinion is not modified in respect of matter stated above.

We have considered the weaknesses identified and reported above in determining thenature timing and extent of audit tests applied in our audit of the March 31st 2016financial statements of the Company and these weaknesses do not affect our opinion on the2016 financial statements of the Company.

For LODHA & CO.
Chartered Accountants
Firm's Registration No. 301051E
(N.K. LODHA)
Place: Noida Partner
Date: 26.05.2016 Membership No. 85155