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Ion Exchange (India) Ltd.

BSE: 500214 Sector: Engineering
NSE: IONEXCHANG ISIN Code: INE570A01014
BSE 00:00 | 22 Feb 374.20 -0.70
(-0.19%)
OPEN

380.50

HIGH

393.50

LOW

373.25

NSE 05:30 | 01 Jan Ion Exchange (India) Ltd
OPEN 380.50
PREVIOUS CLOSE 374.90
VOLUME 3560
52-Week high 520.90
52-Week low 335.00
P/E 9.23
Mkt Cap.(Rs cr) 549
Buy Price 374.50
Buy Qty 7.00
Sell Price 379.60
Sell Qty 9.00
OPEN 380.50
CLOSE 374.90
VOLUME 3560
52-Week high 520.90
52-Week low 335.00
P/E 9.23
Mkt Cap.(Rs cr) 549
Buy Price 374.50
Buy Qty 7.00
Sell Price 379.60
Sell Qty 9.00

Ion Exchange (India) Ltd. (IONEXCHANG) - Auditors Report

Company auditors report

To

The Members of

Ion Exchange (India) Limited

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of Ion Exchange(India) Limited ("the Company") which comprise the Balance Sheet as at 31 March2018 the Statement of Profit and Loss (including other comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand and other summary of the significant explanatory information in which areincorporated the return for the year ended on that date audited by the branch auditor ofthe Company's branch at Bengaluru and IEI Shareholding (Staff Welfare) Trusts (SixtyTrusts) audited by respective auditor of the Trusts (herein after referred to as"Standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(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 incomestate of affairs profit/loss changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards ("Ind AS") prescribed under Section 133 of the Actread with the Companies (Indian Accounting Standard) Rules 2015 as amended.

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 of theaccounting records relevant to the preparation and presentation of the Standalone Ind ASfinancial 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.

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 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 controlsrelevant 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 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 of the state of affairs of theCompany as at 31 March 2018 its profit other comprehensive income changes in equity andits cash flows for the year ended on that date.

Other matter

We did not audit the financial statements/information of one branch and sixty trustsincluded in the Standalone Ind AS financial statements of the Company whose financialstatements / financial information reflect total assets of Rs 803645190 as at 31 March2018 as well as total revenues is Rs 997795887 total profit after tax of Rs.90760969 and total comprehensive income of Rs 91769716 for the year then ended on 31March 2018 as considered in the Standalone Ind AS financial statements. The financialstatements/information of this branch have been audited by the branch auditor whosereports have been furnished to us and our opinion in so far as it relates to the amountsincluded in respect of this branch and IEI Shareholding Trusts (Sixty Trusts) is basedsolely on the report of such branch auditor and auditor of Trusts.

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 in terms of Section 143 (11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 reports on the accounts of the branch office of the Company audited underSection 143 (8) of the Act by the branch auditor and report on accounts of the IEIShareholding Trusts (Sixty Trusts) have been sent to us and have been properly dealt withby us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

(e) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standard) Rules 2015 as amended.

(f) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors aredisqualified as on 31 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 with reference tofinancial statement of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B".

(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:

1. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements Refer Note 49 to the Standalone IndAS financial statements.

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

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

4. The disclosures in this Standalone Ind AS financial statements regarding details ofspecified bank notes held and transacted during 8 November 2016 to 30 December 2016 havenot been made since the requirement does not pertain to financial year ended 31 March2018.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Bhavesh Dhupelia
Mumbai Partner
23 May 2018 Membership No: 042070

Annexure A to the Independent Auditor's Report - 31 March 2018 on the

Standalone Ind AS financial statements

(Referred to in 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 Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme a portion of the fixed assets has been physically verifiedby the management during the year and no material discrepancies have been noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us the title deeds ofimmovable properties as disclosed in Note 2 to the Standalone Ind AS financialstatements are held in the name of the Company except for the following:

(Amount in Rupees)

Particulars Freehold Land Buildings
Gross block as at 31 March 2018 1844060 Nil
Net block as at 31 March 2018 1844060 Nil

(ii) The inventory except goods-in-transit and stock lying with third parties hasbeen physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. In respect of inventory lyingwith third parties these have substantially been confirmed by them. The discrepanciesnoticed on verification between the physical stocks and the book records were notmaterial.

(iii) The Company has granted unsecured loans to eleven companies covered in theregister maintained under Section 189 of the Companies Act 2013 (‘the Act').

a. In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the companies listed in the register maintained under Section189 of the Act were not prima facie prejudicial to the interest of the Company.

b. The loans granted are repayable on demand. We are informed that the Company has notdemanded repayment of such loan from four such companies during the year and othercompanies has paid the loan as per demand and thus there has been no default on the partof the companies covered in the register maintained under section 189 of the Act. Thepayment of interest has not been regular in case of three subsidiaries.

c. There are no overdue amounts in respect of the loan granted to companies listed inthe register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us inrespect of investments loans guarantee and security the Company has complied with theprovisions of Section 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to usduring the year the Company has not accepted any new deposits. The Company has compliedwith the provisions of Section 73 to 76 of the Act or other relevant provisions of the Actand the rules framed thereunder/the directives issued by the Reserve Bank of India (asapplicable) with regard to deposits accepted from the public. No order has been passed bythe Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank ofIndia or any Court or any other Tribunal.

(vi) We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by Central Government for maintenance of cost records under Section 148(1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofsuch records.

(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 depositingthe undisputed statutory dues including provident fund employees state insurance incometax sales tax service tax goods and services tax duty of customs duty of excisevalue added tax cess professional tax and other material statutory dues as applicablewith the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax sales taxservice tax goods and services tax duty of customs duty of excise value added taxcess professional tax and other material statutory dues were in arrears as at 31 March2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Value added tax Service tax goods and services tax duty ofcustoms duty of excise which have not been deposited with the appropriate authorities onaccount of any dispute other than those mentioned in Annexure I to this report.

(viii) According to the information and explanations given to us the Company has notdefaulted in repayments of loans or borrowings to financial institutions or banks. TheCompany neither have any loans or borrowings from Government nor has it issued anydebentures as at the balance sheet date.

(ix) According to the information and explanations given to us the term loans havebeen applied by the Company for the purpose for which they were obtained. The Company didnot raise money by way of initial public offer or further public offer (including debtinstruments) during the year.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid or provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3 (xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanations given to us transactions with therelated parties are in compliance with provisions of sections 177 and 188 of the Actwhere applicable and the details have been disclosed in the Standlone Ind AS financialstatements as required by the applicable Indian accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3 (xv) of the Order is notapplicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Bhavesh Dhupelia
Mumbai Partner
23 May 2018 Membership No: 042070

Annexure B to the Independent Auditor's Report - 31 March 2018 on the Standalone Ind ASfinancial statements

(Referred to in our report of even date)

Report on the Internal Financial Controls under Section 143 (3) (i) of the CompaniesAct 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementof Ion Exchange (India) Limited ("the Company") as of 31 March 2018 inconjunction with our audit of the Standalone Ind AS financial statements of the Companyfor 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 controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation 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 with reference to financial statement based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143 (10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatement was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statement and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statement included obtaining an understanding of internal financial controlswith reference to financial statement assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlsbased on the assessed risk. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the Standalone Ind ASfinancial 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 control systemwith respect to financial statement.

Meaning of Internal Financial Controls with reference to financial statement

A company's internal financial controls with reference to financial statement is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Ind AS financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrols with reference to financial statement includes those policies and procedures that(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatement

Because of the inherent limitations of internal financial controls with reference tofinancial statement including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial reporting of to future periods are subject to the risk that theinternal financial controls with respect to financial statement may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control system with reference to financial statement and such internal financialcontrols with reference to financial statement were operating effectively as at 31 March2018 based on the internal controls with reference to financial statement criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note issued by ICAI.

Other Matters

We did not audit the internal financial controls over financial reporting of theCompany's branch at Bengaluru. The internal financial control over financial reporting ofthis branch have been audited by the branch auditor whose report have been furnished tous and our opinion in so far as it relates to such internal financial controls withreference to financial statement included in respect of this branch is based solely onthe report of such branch auditor.

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No: 101248W/W-100022

Bhavesh Dhupelia
Mumbai Partner
23 May 2018 Membership No: 042070

Annexure I to the Independent Auditors' Report - 31 March 2018

(Referred to in our report of even date)

Name of the Statute Nature of the dues Demand including interest in Rupees Amount paid under protest in Rupees Financial year to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty and penalty 1678600 - 2004-2005 Customs Excise and Service Tax Appellate Tribunal
Sales Tax/CST/ VAT Act for Maharashtra Gujarat Uttar Pradesh Andhra Pradesh Delhi and Goa states Disallowance on account of non- submission of required forms 12040964 2400000 1993-1994 Joint Commissioner Appeals
1995-1996
2006-2007
2009-2010
24362659 2782028 2001-2003 Assistant Commissioner Appeals
2004-2005
2006-2008
2009-2010
2011-2014
6248241 - 2010-2011 Commercial tax appeals
16679413 60000 2010-2011 Objection Hearing Authority
8173216 3777883 2008-2009 Deputy Commissioner of Commercial Taxes
2010-2013
14655854 929852 2008-2009 Deputy Commissioner of Sales Tax Appeals
2010-2012
2013-2014
2014-2015
420427 - 2008-2009 Additional Commissioner of Commercial Taxes
2478901 500000 2004-2005 Senior Joint Commissioner of Commercial
2007-2008 Tax Appeal
Finance Act 1994 Service Tax Disallowance of service tax taken on input services 1278596 448114 2006-2013 Assistant Commissioner of Central Excise
The Customs Act1962 Liability on account of additional duty interest and difference in valuation (to the extent ascertainable) 2258117 - 2003-2004 Joint Director General of Foreign Trade
Income Tax act 1961 Income Tax Demand 26107302 - 2008-2009 Income Tax Appellate Tribunal
2010-2011
Income Tax act 1961 Income Tax Demand 38036866 1990550 2009-2010 Commissioner of Income Tax (Appeal)
2012-2013 to
2014-2015
Income Tax act 1961 Income Tax Demand 9735030 - 2015-2016 Deputy Commissioner of Income Tax