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Indian Metals & Ferro Alloys Ltd.

BSE: 533047 Sector: Metals & Mining
NSE: IMFA ISIN Code: INE919H01018
BSE LIVE 15:58 | 22 Aug 469.10 -10.70
(-2.23%)
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482.50

HIGH

482.50

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NSE 15:43 | 22 Aug 466.45 -11.30
(-2.37%)
OPEN

482.50

HIGH

482.95

LOW

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OPEN 482.50
PREVIOUS CLOSE 479.80
VOLUME 12549
52-Week high 823.00
52-Week low 156.00
P/E 3.33
Mkt Cap.(Rs cr) 1,266
Buy Price 469.10
Buy Qty 42.00
Sell Price 0.00
Sell Qty 0.00
OPEN 482.50
CLOSE 479.80
VOLUME 12549
52-Week high 823.00
52-Week low 156.00
P/E 3.33
Mkt Cap.(Rs cr) 1,266
Buy Price 469.10
Buy Qty 42.00
Sell Price 0.00
Sell Qty 0.00

Indian Metals & Ferro Alloys Ltd. (IMFA) - Auditors Report

Company auditors report

To the Members of Indian Metals and Ferro Alloys Limited

REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of IndianMetals and Ferro Alloys Limited ("the Company") which comprise the BalanceSheet as at 31st March 2017 the

Statement of Profit and Loss (including Other Comprehensive

Income)the Cash Flow Statement and the Statement of Changes in

Equity for the year then ended and a summary of significant accounting policies andother explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS 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 Ind AS financial statements that give a true and fair view of the stateof affairs (financial position)profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind under Section 133 of the Act read with Rule 7 of the AS)specifiedCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls and ensuring their operatingeffectiveness and accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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

We conducted our audit 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 theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditor'S judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany'S preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company'S Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is and appropriate to provide abasis for our audit opinion on the standalone Ind AS financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2017 its profit(financial performance including other comprehensive income) its cash flows and changesin equity for the year ended on that date.

EMPHASIS OF MATTERS

(a) We draw attention to Note No. 6.2 to the standalone Ind

AS financial statements relating to the Company'S equity investment amounting to Rs53.13 crore in Indmet Mining Pte Ltd (RsIndmetRs) a wholly-owned subsidiary incorporatedin Singapore which in turn has investment in its Indonesian subsidiary PT

Sumber Rahayu Indah (RsPT SumberRs). The Company'S carrying value of investment inIndmet is substantially dependent on the latter'S carrying value of investment in PTSumber and the Company has initiated arbitration proceedings for protecting its saidinvestment.

(b) We draw attention to Note Nos. 46 and 47 to the standalone

Ind AS financial statements relating to the Company'S exposure in a subsidiary andnon-recognition of income from interest on unsecured loan given to the subsidiaryrespectively. These matters have arisen out of the cancellation of allotment of the coalblock being held by the subsidiary vide the HonRsble Supreme Court of India'S order dated24th September 2014 and the subsequent events in connection therewith.

Our opinion is not modified in respect of these matters.

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 we give in "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

(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 the Statement of Profit and Loss the

Cash Flow Statement and the Statement of Changes in

Equity 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 theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 theCompanies (Accounts) Rules 2014;

e. The matters described in the Emphasis of Matters paragraph above in our opinionmay have an adverse effect on the functioning of the Company;

f. On the basis of the written representations received from the directors as on 31stMarch 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act;

g. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we giveseparate Report in "Annexure 2".

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 Ind AS financial statements Refer Note Nos. 6.2 38 46 4748 49 50 and 51 to the standalone Ind AS 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;

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

(iv) The Company has provided requisite disclosures in the standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to

30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with the books of accountmaintained by the company and as produced to us by the management (refer Note No.

44 to the standalone Ind AS financial statements).

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W/W100048

Anand Kumar Jhunjhunwala

Partner

Membership No.056613

Bhubaneswar

18th May 2017

ANNEXURE 1

TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under RsReport on Other Legal and Regulatory RequirementS'in our Independent Auditor'S Report of even date to the members of the Company on thestandalone Ind AS financial statements for the year ended 31st March 2017]

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

(b) According to the information and explanations given to us major portion of fixedassets has been physically verified by the Company'S Management ("management")during the year and no material discrepancies were noticed on such verification. In ouropinion the frequency of physical verification is reasonable having regard to the size ofCompany and the nature of its fixed assets.

(c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company.

(ii) According to the information and explanations given to us the inventory has beenphysically verified by the management during the year. In our opinion the frequency ofverification reasonable. As explained to us no material discrepancies were noticed onphysical verification.

(iii) The Company has granted unsecured loan to a Company covered in the registermaintained under Section 189 of the Act.

(a) According to the information and explanations given to us we are of the opinionthat the terms and conditions of the grant of the aforesaid loan are not prejudicial tothe Company'S interest except that the loan and interest thereon is repayable/payableeither on demand or to be adjusted against the supply of coal by the borrower in futurewhich may be prejudicial to the Company'S interest as the borrower'S ability to repay/paysuch loan/interest is contingent on the outcome of certain matters as detailed in Note No.46 to the standalone Ind AS financial statements.

(b) According to the information and explanations given to us the aforesaid loan andinterest thereon is repayable/ payable either on demand or to be adjusted against thesupply of coal by the borrower in future. As no such demand has been raised by the Companytill date clause (b) is not applicable in this case.

(c) As explained in (b) aforesaid there is no amount which is overdue.

(iv) According to the information and explanations given to us in respect of loansinvestments guarantees and security the

Company has complied with the provisions of Sections 185 and 186 of the Act.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public.

(vi) The maintenance of cost records has been specified by the Central Government undersub-section (1) of Section 148 of the Act. We have broadly reviewed such records and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.

(vii) (a) According to the records of the Company amounts deducted/accrued in thebooks of account in respect of undisputed statutory dues including provident fundemployeeS' state insurance income-tax sales tax service tax duty of customs duty ofexcise value added tax cess and any other material statutory dues have generally beenregularly deposited with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at 31st March 2017 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us the dues as at 31stMarch 2017 of income-tax sales tax service tax duty of customs duty of excise andvalue added tax which have not been deposited on account of any dispute are as follows:

(viii) Based on our audit procedures and as per the information and explanations givento us by the management we are of the opinion that during the year the Company has notdefaulted in

Name of the Statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
(Rs in Lakhs)
Central Excise Act 1944 Excise Duty 19.10 1993-2002 Orissa High Court
Central Excise Act 1944 Cenvat Credit reversal 13.75 2002-2009 Central Excise & Service Tax
Appellate Tribunal
Central Excise Act 1944 Cenvat Credit reversal 0.11 2011-12 Assistant Commissioner of Central
Excise (Appeals)
Central Excise Act 1944 Cenvat Credit reversal 1845.73 2009-2014 Central Excise & Service Tax
Appellate Tribunal
Central Excise Act 1944 Cenvat Credit reversal 7.58 2012-2014 Central Excise & Service Tax
Appellate Tribunal
Income Tax Act 1961 Income Tax 17.45 Assessment Years 1987-88 and Orissa High Court
1989-90
Orissa Sales Tax Act 1947 Sales Tax 1.02 1990-91 to 1991-92 Orissa High Court
Orissa Sales Tax Act 1947 Sales Tax 7.04 2002-03 Addl. Commissioner of Sales Tax
Orissa Sales Tax Act 1947 Sales Tax 4.19 1994-95 Orissa Sales Tax Tribunal
Orissa Value Added Tax Act 2004 Value Added Tax 2.76 October 2011 to March 2015 Addl. Commissioner of Sales Tax

repayment of loans or borrowings to a financial institution bank or Government. TheCompany has not issued any debentures as at the balance sheet date.

(ix) In our opinion and according to the information and explanations given to us termloans were prima facie applied during the year for the purposes for which those wasraised. The Company has not raised any money during the year by way of initial publicoffer or further public offer (including debt instruments).

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the standalone Ind AS financial statements and as per the information andexplanations given to us by the management we report that we have neither come across anyinstance of fraud by the Company or on the

Company by its officers or employees noticed or reported during the year nor have webeen informed of any such case by the management

(xi) According to the information and explanations given to us managerial remunerationhas been paid / provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company.

(xiii) According to the information and explanations given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of the

Act where applicable and the details have been disclosed in the standalone Ind ASfinancial statements as required by the applicable accounting standards.

(xiv) The Company has made preferential allotment of fully convertible equity warrantsduring the year under review and such warrants were converted into fully paid-up equityshares during the said year. According to the information and explanations given to usthe requirements of Section 42 of the Act have been complied with and the amounts raisedhave been used for the purposes for which the funds were raised.

(xv) As per the information and explanations given to us the Company has not enteredinto any non-cash transactions during the year with directors or persons connected withthem.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W/W100048

Anand Kumar Jhunjhunwala

Partner

Membership No.056613

Bhubaneswar

18th May 2017

ANNEXURE 2

TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph (2)g under RsReport on Other Legal and RegulatoryRequirementS' in the Independent Auditor'S Report of even date to the members of theCompany on the standalone Ind AS financial statements for the year ended 31st March 2017]

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")

In conjunction with our audit of the consolidated Ind AS financial statements of theHolding Company as of and for the year ended

31st March 2017 we have audited the internal financial controls over financialreporting of the Company as of 31st March 2017 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company'S Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectivelyensuring the orderly and efficient conduct of its business including adherence tocompany'S policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

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 and the

Standards on Auditing specified under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor'S judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is and appropriate to provide abasis for our audit opinion on the

Company'S internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company'S internal financial control over financial process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generally acceptedaccounting principles. A company'S internal financial control over financial reportingincludes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company'S assets that could have amaterial effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial controls overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 operating effectively as at 31st March 2017 based on the internal control overfinancialreporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.103523W/W100048

Anand Kumar Jhunjhunwala

Partner

Membership No. 056613

Bhubaneswar

18th May 2017