You are here » Home » Companies » Company Overview » Indian Metals & Ferro Alloys Ltd

Indian Metals & Ferro Alloys Ltd.

BSE: 533047 Sector: Metals & Mining
NSE: IMFA ISIN Code: INE919H01018
BSE 00:00 | 21 Aug 321.50 1.65
(0.52%)
OPEN

321.70

HIGH

324.00

LOW

319.60

NSE 00:00 | 21 Aug 320.60 -0.50
(-0.16%)
OPEN

318.20

HIGH

324.90

LOW

318.20

OPEN 321.70
PREVIOUS CLOSE 319.85
VOLUME 4502
52-Week high 794.80
52-Week low 288.45
P/E 7.49
Mkt Cap.(Rs cr) 867
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 321.70
CLOSE 319.85
VOLUME 4502
52-Week high 794.80
52-Week low 288.45
P/E 7.49
Mkt Cap.(Rs cr) 867
Buy Price 0.00
Buy Qty 0.00
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 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and other explanatoryinformation.

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 AS) specified under Section 133 of the Act read with Rule 7 of theCompanies (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 the 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.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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 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 standalone Ind AS financial statements 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 Board of Directors aswell as evaluating the overall presentation of the standalone Ind AS financial statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the standalone Ind AS financial statements or if suchdisclosures are inadequate to modify the opinion. Our conclusions are based on the auditevidence obtained up to the date of the auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

We believe that the audit evidence we have obtained 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 accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2018 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. 6.1 to the standalone Ind AS financial statementsrelating to the Company's equity investment amounting to Rs. 53.13 crore in Indmet MiningPte Ltd ('Indmet') a wholly-owned subsidiary incorporated in Singapore which in turnhas investment in its Indonesian subsidiary PT Sumber Rahayu Indah ('PT Sumber'). TheCompany's carrying value of investment in Indmet is substantially dependent on thelatter's carrying value of investment in PT Sumber and the Company has initiatedarbitration proceedings for protecting its said investment.

(b) We draw attention to Note Nos. 45 and 46 to the standalone Ind AS financialstatements relating to the Company's exposure in a subsidiary and non-recognition ofincome from interest on unsecured loan given to the subsidiary respectively. Thesematters have arisen out of the cancellation of allotment of the coal block being held bythe subsidiary vide the Hon'ble Supreme Court of India's order dated 24th September 2014and 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 theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof 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 of 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 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 give ourseparate 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.6.1384546474849 and 50 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 longterm 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.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W/W100048

Anand Kumar Jhunjhunwala

Partner

Membership No.056613

Bhubaneswar

21st May 2018

Annexure 1 to the Independent Auditor's Report

[Referred to in paragraph 1 under Rs.Report 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 2018]

(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 ofthe Company 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 is 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.45 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 ofSections 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 goods and services tax cess and any other material statutorydues have generally been regularly 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 2018 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 2018 of income-tax sales tax service tax duty of customs duty of excise valueadded tax and goods and services tax which have not been deposited on account of anydispute are as follows:

Name of the Statute Nature of dues Amount (' in Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 17.45 Assessment Years 1987-88 to 1989-90 Orissa High Court
Income Tax Act 1961 Income Tax 29.43 Assessment Year 2015-16 Commissioner of Income Tax

(Appeals)

Odisha Sales Tax Act 1947 Sales Tax 1.02 1990-91 to 1991-92 Orissa High Court
Odisha Sales Tax Act 1947 Sales Tax 4.19 1994-95 Odisha Sales Tax Tribunal
Central Excise Act 1944 Excise Duty 19.10 1993-2002 Orissa High Court
Central Excise Act 1944 Excise Duty 1.45 2012-2013 Commissioner (Appeals) Central Excise Customs & Service Tax
Central Excise Act 1944 Cenvat Credit reversal 0.11 2011-2012 Assistant Commissioner Central Excise Customs & Service Tax
Central Excise Act 1944 Cenvat Credit reversal 1818.16 2009-2014 Customs Excise & Service Tax Appellate Tribunal
Central Excise Act 1944 Cenvat Credit reversal 7.58 2012-2014 Customs Excise & Service Tax Appellate Tribunal
Central Excise Act 1944 Cenvat Credit reversal 4.64 2012-2013 Commissioner (Appeals) Central Excise Customs & Service Tax
Central Excise Act 1944 Cenvat Credit reversal 126.12 April 2015 to September 2015 Commissioner (Appeals) Central Excise Customs & Service Tax
Central Excise Act 1944 Cenvat Credit reversal 526.04 2014-2015 Customs Excise & Service Tax Appellate Tribunal
Odisha Value Added Tax Act 2004 Value Added Tax 2.76 October 2011 to March 2015 Odisha Sales Tax Tribunal

(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 repayment of loans or borrowings to a financial institution bank orGovernment. The Company 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 wereraised. 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 noticedor reported during the year nor have we been 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 standaloneInd AS financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.

(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

21st May 2018.

Annexure 2 to the Independent Auditor's Report

[Referred to in paragraph (2)g under Rs.Report 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 2018]

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 the Companyas of 31st March 2018 in conjunction with our audit of the standalone Ind AS financialstatements 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 effectively forensuring 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) ofthe Act to the extent applicable to an audit of internal financial controls both issuedby the 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 were 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 controlsover 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 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 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W/W100048

Anand Kumar Jhunjhunwala

Partner

Membership No.056613

Bhubaneswar

21st May 2018.