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INEOS Styrolution India Ltd.

BSE: 506222 Sector: Industrials
NSE: INEOSSTYRO ISIN Code: INE189B01011
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504.90

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502.10

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OPEN 504.80
PREVIOUS CLOSE 498.75
VOLUME 1299
52-Week high 920.00
52-Week low 460.10
P/E
Mkt Cap.(Rs cr) 888
Buy Price 502.85
Buy Qty 76.00
Sell Price 504.40
Sell Qty 22.00
OPEN 504.80
CLOSE 498.75
VOLUME 1299
52-Week high 920.00
52-Week low 460.10
P/E
Mkt Cap.(Rs cr) 888
Buy Price 502.85
Buy Qty 76.00
Sell Price 504.40
Sell Qty 22.00

INEOS Styrolution India Ltd. (INEOSSTYRO) - Auditors Report

Company auditors report

To the Members of

INEOS Styrolution India Limited

Report on the audit of the financial statements

Opinion

1. We have audited the accompanying financial statements of INEOSStyrolution India Limited ("the Company") which comprise the balance sheet asat March 31 2020 and the statement of Profit and Loss (including Other ComprehensiveIncome) statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2O2O and totalcomprehensive income (comprising of loss and other comprehensive income) changes inequity and its cash flows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Emphasis of Matter

4. We draw your attention to note 47 of the financial statement whichdescribes the management's assessment of the impact of the outbreak of Coronavirus(Covid-19) on the business operations of the Company. The management believes that noadjustments are required in the financial statements as it does not impact the currentfinancial year however in view of the various preventive measures taken (such ascomplete lock-down restrictions by the Government of India travel restrictions etc.) andhighly uncertain economic environment a definitive assessment of the impact on thesubsequent periods is highly dependent upon circumstances as they evolve. Our opinion isnot modified in respect of this matter.

Key audit matters

5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Key audit matter How our audit addressed the key audit matter
Assessment of litigation in respect of an Indirect Tax Matter We have performed following procedures:
(Refer note 1 (s) and 38 to the Financial Statements) - Obtained an understanding from the management evaluated the design and tested the operating effectiveness of the controls and the procedures adopted by the management in respect of assessment and quantification of likely outcome of the tax matters.
Key audit matter How our audit addressed the key audit matter
During the period from January 2005 to December 2011 the Company had paid Countervailing Duty and Special Additional Duty through Duty Entitlement Pass-book (DEPB) in respect of import of raw materials and had availed CENvAt credit for the same. - Obtained details on the status of the litigation and updates during the current year and the Management's evaluation of the likely outcome.
- Assessed the objectivity and independence of the external tax expert engaged by the management.
The Principal Commissioner of Central Excise Customs and Service Tax department disallowed part of the credit availed by the Company. The Company had filed an appeal to the Customs Excise and Service Tax Appellate Tribunal (CESTAT) against the said disallowance and the matter is currently pending at CESTAT. - Obtained independent confirmation from the management's tax expert to confirm facts and circumstances of the matter and their assessment on the probability of the case settling in favour of the Company.
The Management in consultation with tax expert engaged by them believes that the Company's contention has strong merits and in its Judgement material outflow of economic resources is unlikely. Accordingly no provision has been recognised in the books and the same has been disclosed as a contingent liability in the financial statements. - With the involvement of auditors' experts assessed the management expert's views on the case in light of the relevant provisions of law and obtained their independent assessment on the likely outcome.
- Assessed the adequacy of the disclosures made by the Company in the financial statements.
The above matter has been considered as key audit matter due to involvement of significant management Judgment to assess the probability of any material outflow of economic resources and whether a provision should be recognised. Based on the above audit procedures performed we did not find any significant exceptions in the Management's assessment of litigation.

Other Information

6. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Director'sreport Report on Corporate Governance and Management discussion and analysis report butdoes not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance forthe financial statements

7. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity 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. This responsibility also includes

maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding of the assets of the Company and for preventing anddetecting frauds and other irregularities; selection and application of appropriateaccounting policies; making Judgments and estimates that are reasonable and prudent; anddesign implementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

8. In preparing the 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the financial statements

9. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

10. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances; UnderSection 143(3)(l) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

11. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

12. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

13. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

14. 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 of the Act we give in the "Annexure B" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

15. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (includingother comprehensive income) the Statement of Changes in Equity and Cash Flow Statementdealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlswith reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure A".

(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 38 to the financialstatements.

ii. The Company has long-term contracts as at March 31 2020 for whichthere were no material foreseeable losses. The Company did not have any long-termderivative contracts as at March 312020.

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

iv. The reporting on disclosures relating to Specified Bank Notes isnot applicable to the Company for the year ended March 312020.

16. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
PankaJ Khandelia
Partner
Place: Mumbai Membership Number: 102022
Date: June 25 2020 UDIN: 20102022AAAABC8858d>

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 15 (f) of the Independent Auditors' Report ofeven date to the members of

INEOS Styrolution India Limited on the financial statements for theyear ended March 31 2020 Page 1 of 2

Report on the Internal Financial Controls with reference to financialstatements under Clause (i) of Sub-section 3

of Section 143 of the Act

1. We have audited the internal financial controls with reference tofinancial statements of INEOS Styrolution India Limited ("the Company") as ofMarch 31 2020 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls 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 (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial 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.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

6. A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at March 312020 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 issued by the Institute of Chartered Accountants of India. Also refer paragraph4 of our main audit report.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Pankaj Khandelia
Partner
Place: Mumbai Membership Number: 102022
Date: June 25 2020 UDIN: 20102022AAAABC8858

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 14 of the Independent Auditors' Report of evendate to the members of

INEOS Styrolution India Limited on the financial statements as of andfor the year ended March 31 2020

i. (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation

of fixed assets.

(b) The fixed assets are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of two yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the programme a portion of the fixed assets has beenphysically verified by the Management during the year and no material discrepancies havebeen noticed on such verification.

(c) The title deeds of immovable properties other than seif-constructedimmovable properties (buildings) as disclosed in Note 2 on Property Plant and Equipmentand Note 14 on Assets classified as held for Sale to the financial statements are held inthe name or erstwhile name of the Company.

ii. The physical verification of inventory excluding stocks with thirdparties have been conducted at reasonable intervals by the Management during the year. Inrespect of inventory lying with third parties these have substantially been confirmed bythem. The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material.

iii. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 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. The Company has not granted any loans or made any investments orprovided any guarantees or security to the parties covered under Section 185 and 186 ofthe Act. Therefore the provisions of Clause 3(iv) of the said Order are not applicable tothe Company.

v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.

vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

vii. (a) According to the information and explanations given to us andthe records of the Company examined by us in

our opinion the Company is regular in depositing undisputed statutorydues including provident fund employees' state insurance income tax sales taxservice tax duty of customs duty of excise value added tax cess goods and service taxand other material statutory dues as applicable with the appropriate authorities. Alsorefer note 38 to the financial statements regarding management's assessment on certainmatters relating to provident fund.

Further for the month of March 2020 the Company has paid Goods andService Tax and filed Form GSTR 3B after the due date but within the timelines allowed byCentral Board of Indirect Taxes and Customs under the Notification Number 31/2020 -Central Tax dated April 3 2020 on fulfilment of conditions specified therein.

(b) According to the information and explanations given to us and therecords of the Company examined by us there are no dues of goods and service tax whichhave not been deposited on account of any dispute. The particulars of dues of income taxsales tax service tax duty of customs duty of excise and value added tax as at March312020 which have not been deposited on account 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 Income Tax Act 1961 Income Tax 1497.80 AY 2010-11 to AY 2015-16 Commissioner of Income Tax (Appeals)
The Income Tax Act 1961 Income Tax 24.52 AY 2018-19 Deputy Commissioner of Income Tax
The Central Sales Tax Act 1956 Sales Tax 79.17 FY 2002-04 Joint Commissioner Commercial Tax GuJ.
The Central Sales Tax Act 1956 Sales Tax 5.35 FY 2013-14 Appellate Tribunal Commercial Tax GuJ.
Value Added Tax Act 2005 vat 49.06 FY 1999-00 FY 2001-02 and FY 2015-16 Commissioner of Sales Tax (Appeals)
Value Added Tax Act 2005 vat 2.61 2014-15 Commissioner Sales Tax Maharashtra
Value Added Tax Act 2005 vat 131.92 FY 2014-15 and FY 2015-16 Commissioner Sales Tax Gujarat
The Central Excise Act 1944 CVD Claimed as credit as per exemption under depb 8022.17 January 2005 to December 2011 cestat
Finance Act 1994 Service Tax 2196.84 August 2008 to June 2016 cestat
Finance Act 1994 Service Tax 6.51 December 2010 to June 2016 Commissioner Central Excise (Appeals)
The Customs Tariff Act 1975 Customs duty 37.35 FY 2011-12 cestat

viii. According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any bank as at the balance sheet date. The Company did not have anyoutstanding loans or borrowing to any financial institution or Government or dues todebenture holders as at the balance sheet date.

ix. In our opinion and according to the information and explanationgiven to us the moneys raised by way of term loans have been applied for the purpose ofwhich they were obtained. The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments).

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

xi. The Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act. Also refer paragraph 16 of our main audit report.

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

xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the financial statements as requiredunder Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specified underSection 133 of the Act.

xiv. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of Clause 3(xiv) of the Order are not applicable tothe Company.

xv. The Company has not entered into non-cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
PankaJ Khandelia
Partner
Place: Mumbai Membership Number: 102022
Date: June 25 2020 UDIN: 20102022AAAABC8858