1. We have audited the attached Balance Sheet of IFGL Refractoriness
Limited (the Company) as at 31st March 2012, the Statement of Profit
and Loss and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto. These Financial Statements are the
responsibility of the Company''s Management. Our responsibility is to
express an opinion on these Financial Statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
Financial Statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall Financial
Statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor''s Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, they said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
(ii) in the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March 2012 taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March 2012 from being appointed as a Director in terms of Section
274(1)(g) of the Companies Act, 1956.
(REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE)
(i) Having regard to the nature of the Company''s business/activities,
clauses (vi), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of
CARO are not applicable.
(ii) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the Fixed Assets.
(b) The Fixed Assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
Fixed Assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
(c) The Fixed Assets disposed off during the year, in our opinion, do
not constitute a substantial part of the Fixed Assets of the Company
and such disposal has, in our opinion, not affected the Going Concern
status of the Company.
(iii) In respect of its inventory :
(a) As explained to us, the inventories except material lying with
third parties (which have substantially been confirmed) were physically
verified during the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
(iv) The Company has neither granted nor taken any loans, secured and
unsecured, to/from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and Fixed Assets and the sale of Goods and Services. During
the course of our audit, we have not observed any major weakness in
such Internal Control System.
(vi) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us :
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs 5 lakhs in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time except in respect of sale of certain goods for which
comparable quotations are not available and in respect of which we are
unable to comment.
(vii) In our opinion, the Internal Audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) According to the information and explanations given to us in
respect of Statutory Dues :
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material Statutory Dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income Tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material Statutory
Dues in arrears as at 31st March 2012 for a period of more than six
months from the date they became payable.
(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March 2012 on account of disputes are given below :
Statute Nature of Dues Forum where Period to which Amount
pending the amount
relates (net of
(Rs in lacs)
Act, 1956 Sales Tax Sales Tax
Tribunal 1995-1996 1.14
Sales Tax Additional
of 1997-1998 0.47
Sales Tax Orissa High
Court 1999-2000 2.17
Sales Tax Assistant
of 2003-2004 0.25
Act,1947 Sales Tax Orissa Sales
Tax Tribunal 1996-1997 39.91
Sales Tax Orissa High
Court 1999-2000 0.11
Act,1961 Income Tax Income Tax
Appellate Assessment Year 15.88
Benefit Tax Deputy
Commissioner Assessment Year 0.51
Income Tax Deputy
of Assessment Year 61.25
Income Tax 2008-2009
1994 Service Tax Joint Commis
sioner of 2006-2007 1.54
(x) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
any banks. The Company has neither any outstanding dues to any
Financial Institutions or Debenture Holders at the beginning of the
year nor has it obtained any loans from such parties during the year.
(xi) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from Banks and Financial Institutions
are not prima facie prejudicial to the interests of the Company.
(xii) In our opinion and according to the information and explanations
given to us, the Term Loans have been applied for the purposes for
which they were obtained.
(xiii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that Funds raised on short-term basis have not been used during
the year for long-term investment.
(xiv) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no fraud on the
Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
(Registration No. 302009E)
19th May 2012 (Membership No. 054110)