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IFGL Refractories Ltd.

BSE: 540774 Sector: Engineering
NSE: IFGLEXPOR ISIN Code: INE133Y01011
BSE 12:24 | 18 Sep 163.95 3.95
(2.47%)
OPEN

161.30

HIGH

164.55

LOW

161.30

NSE 12:24 | 18 Sep 163.45 3.40
(2.12%)
OPEN

161.95

HIGH

165.50

LOW

161.95

OPEN 161.30
PREVIOUS CLOSE 160.00
VOLUME 369
52-Week high 271.50
52-Week low 125.00
P/E 21.77
Mkt Cap.(Rs cr) 591
Buy Price 162.55
Buy Qty 5.00
Sell Price 163.95
Sell Qty 19.00
OPEN 161.30
CLOSE 160.00
VOLUME 369
52-Week high 271.50
52-Week low 125.00
P/E 21.77
Mkt Cap.(Rs cr) 591
Buy Price 162.55
Buy Qty 5.00
Sell Price 163.95
Sell Qty 19.00

IFGL Refractories Ltd. (IFGLEXPOR) - Auditors Report

Company auditors report

Independent Auditors' Report

TO THE MEMBERS OF

IFGL REFRACTORIES LIMITED (Formerly known as IFGL EXPORTS LIMITED)

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of IFGLRefractories Limited (Formerly known as IFGL Exports Limited)(tithe Companyti) whichcomprise the Balance Sheet as at March 31 2018 the Statement of Profit and Loss(including Other Comprehensive Income) the Cash Flow Statement and the Statement ofchanges in Equity for the year then ended and a summary of the significant accountingpolicies and other 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 (tithe Actti) with respect to the preparation of theseStandalone Ind AS Financial Statements that give a true and fair view of the FinancialPosition Financial Performance including Other Comprehensive Income Cash Flows andchanges in Equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate Internal FinancialControls that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS 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 Ind AS FinancialStatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the orderissued under Section 143(11) of the Act.

We conducted our audit of the Standalone Ind AS Financial Statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS Financial Statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS Financial Statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS Financial Statements whether due to fraud or error.In making those risk assessments the auditor considers Internal Financial Controlrelevant to the Company's preparation of the Standalone Ind AS Financial Statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASFinancial Statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis 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 Ind AS and other accoun#ng principles generally accepted in India of the stateof affairs of the Company as at March 31 2018 and its Profit Total Comprehensive Incomeits Cash Flows and the changes in Equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note 38 to the Standalone Ind AS Financial Statements relating toamalgamation of the erstwhile IFGL Refractories Limited with the Company with effect fromApril 1 2016 following Scheme of Amalgamation approved by the Hon'ble National CompanyLaw Tribunal Kolkata Bench (NCLT) vide its Order dated August 3 2017 pursuant toSections 230 and 232 of the Companies Act 2013 which has been accounted under the'Purchase Method' as per Accounting Standard 14 - Accounting for Amalgamations (AS- 14).Accordingly the Company has recognised goodwill on amalgamation aggregating to Rs. 26699lacs which is being amortised over a period of 10 years. This accounting treatment isdifferent from that prescribed under Indian Accounting Standard (Ind AS) 103 - 'Business

Combinations' for business combination of entities under common control.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit we report to theextent applicable 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 Statement of changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the Directors of theCompany as on March 31 2018 taken on record by the Board of Directors none of theDirectors is disqualified as on March 31 2018 from being appointed as a Director in termsof Section 164 (2) of the 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 tiAnnexure Ati. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's Internal Financial Controls overFinancial Reporting.

g) 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 as amended inour opinion and to the best of our information and according to the explanations given tous :

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements - Refer Note 32 to the FinancialStatements.

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

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

2. As required by the Companies (Auditor's Report) Order 2016 (tithe Orderti) issuedby the Central Government in terms of Section 143(11) of the Act we give in tiAnnexureBti a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 302009E)
Abhijit Bandyopadhyay
Kolkata Partner
May 19 2018 (Membership No. 054785)

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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 IFGLRefractories Limited (Formerly known as IFGL Exports Limited) ('the Company') as of March31 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements ofthe Company for the year ended on that date.

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 Reporting (the'Guidance Note') issued by the Institute of Chartered Accountants of India (ICAI). 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 of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofInternal Financial Controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate Internal Financial Controls over Financial Reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 to the best of our information and according to the explanations givento us the Company has in all material respects an

adequate Internal Financial Controls system over Financial Reporting and such InternalFinancial Controls over Financial Reporting were operating effectively as at March 312018 based on the Internal Control over Financial Reporting criteria established by theCompany considering the essential components of Internal Control stated in the GuidanceNote.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 302009E)
Abhijit Bandyopadhyay
Kolkata Partner
May 19 2018 (Membership No. 054785)

Annexure 'B' to the Independent Auditor's Report

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our Report of even date)

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed

Assets.

b) The Property Plant and Equipment were physically verified during the year by themanagement in accordance with a regular programme of verification which in our opinionprovides for physical verification of all the Property Plant and Equipment at reasonableintervals. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

c) With respect to immovable properties of acquired Land and Building that arefreehold according to the information and explanations given to us and the recordsexamined by us and based on the examination of the registered conveyance deed/ ordersapproving schemes of arrangements provided to us we report that the title deeds of suchimmovable properties are held in the name of the Company as at the Balance Sheet date.

ii) As explained to us the Inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on suchphysical verification.

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 Companies Act 2013.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of Loans making Investments and providing Guarantees andSecurities as applicable.

v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and has no unclaimed deposits at the beginning of theyear as per the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 (for manufacture and sale of certain castablematerials).We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013 and areof the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

vii) According to the information and explanations given to us in respect of StatutoryDues :

a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax Goods andService Tax Customs Duty Excise Duty Value Added Tax Cess and other material statutorydues applicable to it to the appropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Goods and Service Tax Customs DutyExcise Duty Value Added Tax Cess and other material statutory dues in arrears as atMarch 31 2018 for a period of more than six months from the date they became payable.

c) Details of dues of Income Tax Sales Tax and Service Tax which have not beendeposited as on March 31 2018 on account of disputes are given below :

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount involved (' in lacs) Amount unpaid (' in lacs)
Sales Tax Central Sales Tax Act 1956 Sales Tax Sales Tax Tribunal 1995-1996 5.14 1.14
Sales Tax Additional Commissioner of Sales Tax 1997-1998 1.97 0.47
Sales Tax Assistant Commissioner of Sales Tax 2003-2004 0.25 0.25
Sales Tax Additional Commissioner of Sales Tax July 1 2006 to March 31 2011 24.04 8.49
Sales Tax Additional Commissioner of Sales Tax 2014-2015 0.85 0.85
Orissa Sales Tax Act 1947 Sales Tax Orissa Sales Tax Tribunal 1996-1997 and 1997-1998 39.91 39.91
Sales Tax Orissa High Court 1999-2000 0.11 0.11
Total 72.27 51.22
Service Tax Service Tax Rules1994 Service Tax Joint Commissioner of Central Excise Customs & Service Tax 2006-2007 1.54 1.54
Total 1.54 1.54
Income Tax The Income Tax Act 1961 Income Tax Dues Commissioner of Income Tax (Appeals) AY 2012-2013 AY 2013-2014 AY 2014-2015 212.32 212.32
Total 212.32 212.32

There are no disputed dues with respect to Custom Duty Excise Duty Value Added Taxand Cess.

viii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans and borrowings to any banks. TheCompany has not taken any loans or borrowings from any Financial Institutions orGovernment. The Company has not issued any debentures.

ix) The Company has not raised moneys by way of Initial Public Offer or further PublicOffer (including Debt Instruments). In our opinion and according to the information andexplanations given to us the term loans were applied for the purposes for which they wereraised.

x) To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no fraud on the Company by its officers or employeeshas been noticed or reported during the year.

xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided Managerial Remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards.

xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company. Also refer Note 38 to theFinancial Statements.

xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non cash transactions with itsdirectors or persons connected with him and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration No. 302009E)
Abhijit Bandyopadhyay
Kolkata Partner
May 19 2018 (Membership No. 054785)