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INEOS Styrolution India Ltd.

BSE: 506222 Sector: Industrials
NSE: INEOSSTYRO ISIN Code: INE189B01011
BSE LIVE 15:40 | 19 Sep 935.30 -10.85
(-1.15%)
OPEN

957.00

HIGH

957.00

LOW

929.55

NSE 15:31 | 19 Sep 934.40 -18.15
(-1.91%)
OPEN

948.05

HIGH

954.50

LOW

930.00

OPEN 957.00
PREVIOUS CLOSE 946.15
VOLUME 870
52-Week high 1138.90
52-Week low 550.00
P/E 28.84
Mkt Cap.(Rs cr) 1,645
Buy Price 0.00
Buy Qty 0.00
Sell Price 935.30
Sell Qty 51.00
OPEN 957.00
CLOSE 946.15
VOLUME 870
52-Week high 1138.90
52-Week low 550.00
P/E 28.84
Mkt Cap.(Rs cr) 1,645
Buy Price 0.00
Buy Qty 0.00
Sell Price 935.30
Sell Qty 51.00

INEOS Styrolution India Ltd. (INEOSSTYRO) - Auditors Report

Company auditors report

Independent Auditors' Report

To the Members of

INEOS Styrolution India Limited

(Formerly known as Styrolution ABS (India) Limited)

Report on the Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying Ind AS financial statements of INEOS StyrolutionIndia Limited ("the Company") which comprise the Balance Sheet as at March31 2017 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement the Statement of Changes in Equity for the year then ended and a summaryof the significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Financial Statements

2. 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 Ind AS financial statements to give a true and fair view of the financial positionfinancial performance (including other comprehensive income) cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified in the Companies (IndianAccounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesignimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these Ind AS financial statementsbased on our audit.

4. We have taken into account the provisions of the Act and the Rules made there underincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the Ind AS financial statements. The procedures selected depend onthe auditors' judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 and its profit (including other comprehensive income) its cashflows and the changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information of the company for the year ended March 312016 and the transition date opening balance sheet as at April 1 2015 prepared inaccordance with Ind AS included in these Ind AS financial statements have been audited bythe predecessor auditor who had audited the statutory financial statements for the yearsended March 31 2016 and March 31 2015. The predecessor auditor has expressed anunmodified opinion on the comparative financial information and the opening balance sheetvide report dated May 26 2017.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of Section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

11. 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 (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 A.

(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March 312017on its financial position in its Ind AS financial statements – Refer Note 35;

ii. The Company did not have any long-term contracts including derivative contracts asat March 31 2017.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312017.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the management – Refer Note 42.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N / N500016
Uday Shah
Place: Mumbai Partner
Date: May 26 2017 Membership Number: 046061

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internal financial controls over financial reporting of INEOSStyrolution India Limited ("the Company") as of March 31 2017 in conjunctionwith our audit of the Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

2. 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

3. 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 deemed to be prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe ICAI. 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.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.

5. 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

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company'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 transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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

7. 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

8. 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 2017 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 Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Uday Shah
Place: Mumbai Partner
Date: May 26 2017 Membership Number: 046061

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

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of two years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties other than self-constructed immovableproperties (buildings) as disclosed in Note 2 on fixed assets to the Ind AS financialstatements are held in the name of the Company (INEOS

Styrolution India Limited) except for the following:

Name of entity on the title deed Category of Asset Total Number of Agreements Net Block Value (in INR Lakhs)
INEOS ABS (India) Limited (*) Freehold Land 1 24.87
ABS (Industries) Limited (*) Building 1 13.59
ABS Plastics Limited (**) Building 2 5.79
Lanxess ABS Limited (***) Building 3 21.94
Lanxess ABS Limited Leasehold Land 1 131.96
Styrolution India Private Limited Leasehold Land 1 76.46
Total 9 274.61

(*) The Company is in process of transferring property in their name.

(**) Out of two buildings above for one building the Company is in process oftransferring it on their name and for the other building the Company is in the process ofcomplying with the terms of the lease cum sale agreement so as to execute the final saleagreement and obtain the right to ownership.

(***) Out of three buildings the Company is in process of transferring one building iton their name.

ii. The physical verification of inventory excluding goods-in-transit and stocks lyingwith third parties have been conducted at reasonable intervals by the Management duringthe year. In respect of inventory lying with third parties these have substantially beenconfirmed by them. The discrepancies noticed on physical verification of inventory ascompared to book records were not material.

iii. 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 Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security in respect of anyloans to any party covered under Section 185 of the Act.

In respect of investments made in body corporates by the Company the provisions ofSection 186 of the Act has been complied with.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of Sales Tax Service Tax value added tax thoughthere has been a slight delay in a few cases and is regular in depositing undisputedstatutory dues including provident fund employees' state insurance Income Tax duty ofcustoms duty of excise cess and other material statutory dues as applicable with theappropriate authorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of value added tax which have not been depositedon account of any dispute. The particulars of dues of income tax sales tax service taxduty of customs duty of excise as at March 31 2017 which have not been deposited onaccount of a dispute are as follows:

Name of the statute Nature of dues Amount (INR in Lakhs) Period to which the amount relates Forum where the dispute is pending
The Central Sales Tax Act 1956 Sales Tax 57.39 2001-02 Commissioner of Sales Tax
(Appeals)
The Central Sales Tax Act 1956 Sales Tax 121.39 2002-03 2003-04 Joint Commissioner Commercial
Tax and 2011-12 Tax
The Central Excise Act 1944 Service Tax 147.21 Nov-2015 to CESTAT Ahmedabad
June-2016
The Central Excise Act 1944 Service Tax 8.97 March-2014 to Asst. Commissioner
January-2015 Central Excise (A) Surat
The Central Excise Act 1944 Service Tax 198.89 January-2006 to Commissioner of Central Excise
June-2016 (A) Surat
The Central Excise Act 1944 Service Tax 8.28 September-2004 Joint Commissioner Excise Surat
to December 2004
The Central Excise Act 1944 Service Tax 683.77 April-2011 to CESTAT Mumbai
October-2015
The Central Excise Act 1944 Excise Duty 18.81 October-2005 to CESTAT Ahmedabad
June-2015
The Central Excise Act 1944 Excise Duty 48.34 August-2010 to Joint Commissioner Excise
June-2015 Ahmedabad
The Customs Tariff Act 1975 Customs Duty 7776.06 January-2005 to CESTAT Ahmedabad
claimed as credit December-2011
as per exemption
under DEPB
Scheme
The Customs Tariff Act 1975 Customs duty 39.28 2011-12 CESTAT Ahmedabad
The Income Tax Act 1961 Income Tax 7.68 2005-06 to ITAT Ahmedabad
2009-10
The Income Tax Act 1961 Income Tax 316.10 2008-09 2011-12 Commissioner (Appeals)
and 2012-13 Vadodara
The Income Tax Act 1961 Income Tax 452.79 2008-09 to Commissioner (Appeals)
2011-12 Mumbai

viii. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank or Government or dues to debenture holdersas at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid / provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the Ind AS financial statements as required underAccounting Standard (Ind AS) 24 Related Party Disclosures specified under Section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N / N500016
Uday Shah
Place: Mumbai Partner
Date: May 26 2017 Membership Number: 046061