Mar 31, 2023
GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Gujarat State Fertilizers & Chemicals Limited (âthe Companyâ), which comprise the balance sheet as at March 31,2023, and the statement of Profit and Loss (including Other Comprehensive Income), statement of changes in equity and statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âstandalone financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act,2013 (âthe Actâ) Act in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards ) Rules, 2015, as amended, (âInd Asâ) and the other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023 profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report:
Key Audit Matter |
Auditor''s Response |
Evaluation of uncertain tax positions: The company has material uncertain tax positions for liability of '' 23,713.53 Lakhs including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes 38 to the Standalone Financial Statements. |
Principal Audit Procedures Our audit procedure included: ⢠Evaluated the related accounting policy for provisioning for tax exposures and obtained details of completed tax assessments and demands upto the year ended March 31,2023 from the management. ⢠Evaluated auditee''s response /opinion taken from various tax experts by auditee to challenge the underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We also considered legal precedence and other rulings in evaluating management''s position on these uncertain tax positions. ⢠Additionally, we considered the effect of new information in respect of uncertain tax positions as at March 31,2023 to evaluate whether any change was required to management''s position on these uncertainties. We evaluated the adequacy of disclosures in the financial statements. Based on the above procedures performed, the results of management''s assessment were considered to be consistent with the outcome of our procedures. |
Key Audit Matter |
Auditor''s Response |
Impairment of property, plant and equipment: The Company has discontinued its operations at Fiber & Polymer unit due to non-viability of its products. Carrying Value of the assets of the Fiber & Polymer unit as on March 31,2023 works out to '' 4,988.51 Lakhs & '' 142.63 Lakhs respectively. We have considered this issue to be a key audit matter because the analysis performed by management requires the use of complex estimates and judgments regarding the future earnings performances \ recoverable amount of the CGUs to which the aforementioned assets belong. |
Principal Audit Procedures Our audit procedure included: ⢠Evaluated the management''s various viable proposals, impairment calculations, assessing the net recoverable value of the CGU used in the models, and the process by which they were drawn up, including comparing them to the latest circle rates of the Land, and testing the underlying calculations. Based on our audit procedures, we found management''s assessment in determining the carrying value of the property, plant and equipment of Fiber and Polymer unit to be reasonable. Refer Notes 48(i) to the Standalone Financial Statements. |
Assessment of implications of Government policies/notifications on recognition of subsidy revenue and its recoverability: During the year, the company has recognised subsidy revenue amounting to '' 5,81,031.69 Lakhs and the aggregate amount of subsidy receivable as at March 31, 2023 is '' 1,76,029.18 Lakhs. The amount of subsidy income and the balance receivable are significant to the Financial Statements. We focused on this area since the recognition of subsidy revenue and the assessment of recoverability of the related subsidy receivables is subject to significant judgments of the management. The areas of subjectivity and judgment include interpretation and satisfaction of conditions specified in the notifications / policies in the estimation of timing and amount of recognition of subsidy revenue, likelihood of recoverability and allowance if any in relation to the outstanding subsidy receivables. |
Principal Audit Procedures Our audit procedure included: ⢠Understood and evaluated the design and tested the operating effectiveness of controls as established by the management in recognition of subsidy revenue and assessment of the recoverability of outstanding subsidy. ⢠Evaluated the management''s assessment regarding reasonable certainty of complying with the relevant conditions as specified in the notifications / policies. We also reviewed the calculation of urea concession income including escalation / de-escalation adjustments as per relevant policy parameters in this regard. ⢠We assessed the reasonableness of the recoverability of subsidy receivable by reviewing the management''s analysis and information used to determine the recoverability of subsidy receivable, ageing of receivables and historical collection trends and evaluated adequacy of disclosures in the Standalone Financial Statements. Based on the above procedures performed, the management''s assessment of implications of government notifications / policies on recognition of subsidy revenue and its recoverability was considered to be reasonable. |
Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers": The company primarily manufactures and sells a number of fertilizer and chemical products to its customers, mainly through its own distribution network. Sales contracts specifically w.r.t. Bill and Hold transaction contains constructive obligation for transfer of control to the buyer. As per the terms of the contract with the customers, the company used to recognize the sale based on the invoicing and considering the transfer of control and other criteria set out in para B81 of Ind AS 115. Refer Notes 45 to the Standalone Financial Statements. |
Principal Audit Procedures Our audit procedure: ⢠Focused on transactions occurring within proximity of the year end in the Fertilizer segment, obtaining evidence to support the appropriate timing of revenue recognition based on terms and conditions set out in sales contracts, delivery documents and dealers'' confirmation. Based on the above procedures performed, we found management''s assessment in recognizing the revenue for Bill & Hold transactions are to be reasonable. |
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Board''s Report and Annexure to Board''s Report, Management Discussion and Analysis, Corporate Governance Report and Shareholder''s Information but does not include the standalone financial statements and our auditor''s report thereon. The other information is expected to be made available to us after the date of this auditor''s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Other Information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 (Revised) ''The Auditor''s Responsibilities Related to Other Information''.
Management''s Responsibility for the Standalone Financial Statement
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act, with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matters or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The standalone financial statements of the Company, for the year ended March 31, 2022 have been audited by the predecessor auditors. The report of the predecessor auditors dated May 26, 2022 expressed an unmodified opinion. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in paragraphs 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 best of 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 the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive income, the statement of changes in equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, as amended.
e) On the basis of the written representations received from the directors as on March 31,2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration has been paid by the company to its directors during the year is in accordance with provisions of Section 197 of the Act.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and 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 financial position in its standalone financial statements - Refer Note no 38 to the financial statements;
ii. Provision has been made in the financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor''s Education and Protection Fund by the company.
iv. (a) The management has represented that, to the best of their knowledge and belief, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented, that, to the best of their knowledge and belief, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material mis-statement.
v. The final dividend proposed in the previous year, declared and paid by the company during the year, is in compliance with section 123 of the Act.
As stated in note 20 to the standalone financial statement, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
For Parikh Mehta & Associates Chartered Accountants Firm Reg. No.: 112832W
Sd/-Tejal Parikh Partner
Place : Vadodara Membership No. 10960
Date : May 25, 2023 UDIN : 23109600BGUHZW4942
Mar 31, 2022
Auditor''s Opinion
We have audited the accompanying standalone financial statements of Gujarat State Fertilizers & Chemicals Limited ("the Company"), which comprise the balance sheet as at 31st March 2022, and the statement of Profit and Loss (including Other Comprehensive income), statement of changes in equity and statement of cash flows for the year then ended, on that date and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") Act in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind As") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, profit, total comprehensive Income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter |
Auditor''s Response |
Evaluation of uncertain tax positions: The Group has material uncertain tax positions for liability of '' 21,875.95 Lakhs including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes 38 to the Consolidated Financial Statements. |
Principal Audit Procedures We evaluated the related accounting policy for provisioning for tax exposures. We have obtained details of completed tax assessments and demands upto the year ended March 31, 2022 from management. We evaluated auditee''s response / opinion taken from various tax experts by auditee to challenge the underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We also considered legal precedence and other rulings in evaluating management''s position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions as at March 31, 2022 to evaluate whether any change was required to management''s position on these uncertainties. We evaluated the adequacy of disclosures in the financial statements. Based on the above procedures performed, the results of management''s assessment were considered to be consistent with the outcome of our procedures. |
Key Audit Matter |
Auditor''s Response |
Impairment of property, plant and equipment: Group has discontinued its operations at Fiber & Polymer unit due to non-viability of its products. Carrying Value of the assets of the Fiber & Polymer unit as on 31st March 2022 works out to '' 5,290.36 Lakhs & '' 150.16 Lakhs respectively. We have considered this issue to be a key audit matter because the analysis performed by management requires the use of complex estimates and judgments regarding the future earnings performances \ recoverable amount of the CGUs to which the aforementioned assets belong. |
Principal Audit Procedures We evaluated the management''s various viable proposals, impairment calculations, assessing the net recoverable value of the CGU used in the models, and the process by which they were drawn up, including comparing them to the latest circle rates of the Land, and testing the underlying calculations. Based on our audit procedures, we found management''s assessment in determining the carrying value of the property, plant and equipment of Fiber and Polymer unit to be reasonable. Refer Notes 49(i) to the Consolidated Financial Statements. |
Assessment of implications of Government policies/notifications on recognition of subsidy revenue and its recoverability: During the year, Group has recognised subsidy revenue amounting to '' 3,26,033.42 Lakhs and the aggregate amount of subsidy receivable as at March 31, 2022 is '' 67,586.64 Lakhs. The amount of subsidy income and the balance receivable are significant to the Financial Statements. We focused on this area since the recognition of subsidy revenue and the assessment of recoverability of the related subsidy receivables is subject to significant judgements of the management. The areas of subjectivity and judgement include interpretation and satisfaction of conditions specified in the notifications / policies in the estimation of timing and amount of recognition of subsidy revenue, likelihood of recoverability and allowance if any in relation to the outstanding subsidy receivables. |
Principal Audit Procedures ⢠We understood and evaluated the design and tested the operating effectiveness of controls as established by management in recognition of subsidy revenue and assessment of the recoverability of outstanding subsidy. ⢠We evaluated the management''s assessment regarding reasonable certainty of complying with the relevant conditions as specified in the notifications / policies. We also reviewed the calculation of urea concession income including escalation / de-escalation adjustments as per relevant policy parameters in this regard. ⢠We assessed the reasonableness of the recoverability of subsidy receivable by reviewing the management''s analysis and information used to determine the recoverability of subsidy receivable, ageing of receivables and historical collection trends and evaluated adequacy of disclosures in the Consolidated Financial Statements. Based on the above procedures performed, the management''s assessment of implications of government notifications / policies on recognition of subsidy revenue and its recoverability was considered to be reasonable. |
Accuracy of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers": Group primarily manufactures and sells a number of fertilizer and chemical products to its customers, mainly through its own distribution network. Sales contracts specifically w.r.t Bill and Hold transaction contains constructive obligation for transfer of control to the buyer. As per the terms of the contract with the customers, Group use to recognize the sale based on the invoicing and considering the transfer of control and other criteria set out in para B81 of Ind AS 115. Refer Notes 46 to the Consolidated Financial Statements. |
Principal Audit Procedures Our audit procedure focused on transactions occurring within proximity of the year end in the Fertilizer segment, obtaining evidence to support the appropriate timing of revenue recognition based on terms and conditions set out in sales contracts, delivery documents and dealers'' confirmation. Based on the above procedures performed, we found management''s assessment in recognizing the revenue for Bill & Hold transactions are to be reasonable. |
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Board''s Report and Annexure to Board''s Report, but does not include the financial statements and our auditor''s report thereon. The other information is expected to be made available to us after the date of this auditor''s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated
Management''s Responsibility for the Standalone Financial Statement
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act, with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 1 43(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("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 Aâ, a statement on the matters specified in paragraphs 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 best of 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 the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive income, the statement of changes in equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Bâ.
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 1 97(1 6) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration has been paid by the company to its directors during the year is in accordance with provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and 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 financial position in its financial statements - Refer Note no 38 to the financial statements;
ii. Provision has been made in the financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There were no amounts which were required to be transferred to the investor''s education and protection fund by the company.
iv. (i) The Management has represented that, to the best of their knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person(s) or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(ii) the management has represented, that, to the best of their knowledge and belief, no funds have been received by the company from any person(s) or entity (ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(iii) Based on such audit procedures, nothing has come to our notice that has caused them to believe that the representations under sub-clause (i) and (ii) contain any material mis-statement.
v. The dividend declared or paid during the year by the company is in compliance with section 1 23 of the Companies Act, 2013.
For T R Chadha & Co LLP Firm''s Reg. No-: 006711N/N500028 Chartered AccountantsSd/-Brijesh Thakkar (Partner)Place : Ahmedabad Membership No-135556Date : 26/05/2022 UDIN: 22135556AJRFCM2359
Mar 31, 2018
Independent Auditorsâ Report
TO THE MEMBERS OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED (âthe Companyâ), which comprise 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 of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as âStandalone Ind AS Financial Statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with relevant rules issued there under.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matter in the notes to the standalone Ind AS financial statements:
Note 12 which describes the companyâs past subsidy claims matter and the eligibility of claims for the period from March 18, 2013 to March 5, 2017 amounting to - 662.95 Crores pending examination by Fertilizer Industry Coordination Committee. The company is reasonably certain that its subsidy claims for the aforesaid period, which are in line with the claims recently agreed for period from April 01, 2010 to March 17, 2013, will be agreed by the Department of Fertilizers.
Our opinion is not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
1. 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 best of 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 the company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued there under.
(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and 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 financial position in its standalone Ind AS financial statements. Refer Note no 39 to the standalone Ind AS financial statement.
II. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
III. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in Paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our Report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Gujarat State Fertilizers & Chemicals Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on, the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs audit opinion on the companyâs internal financial control system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the 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 give to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
(Referred to in Paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our Report of even date)
(i) In respect of its Fixed Assets
a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.
c) According to the information and explanations given to us and the records examined by us and based on the examination of register sales deed / transfer deed / letter of award provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date
In respect of immovable properties of land and buildings that have been taken on lease and disclosed as Property, Plant and Equipment (fixed asset) in the financial statements, the lease agreements are in the name of the company, where the company is the lessee in the agreement, except as stated in table below.
Particulars of the land |
Amount f lacs (Carrying amount as at the balance sheet date) |
Remarks |
Leasehold land at Nandesari admeasuring to 82,383 square meters |
29.39 |
The title deeds are in the name of Polymer Corporation of Gujarat Limited, erstwhile company that was merged with the Company under Section 391 to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court(s) of judicature. |
(ii) Inventories
As explained to us, the inventories, except goods-in-transit, were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) Loans given
According to the information & explanations given to us, the Company has not granted any loans, Secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence reporting under clause (iii) (a), (b) and (c) of Paragraph 3 of the order is not applicable.
(iv) Compliance of Sec. 185 & 186
In our opinion and according to the information and explanations given to us, the compnay has complied with the provisions of sections 185 & 186 of the companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities.
(v) Public Deposit
According to the information and explanations given to us, the company has not accepted any deposits during the year. In respect of unclaimed deposits, the company has complied with the proviso of section 73 to 76 or any other relevant provisions of the Companies Act, 2013.
(vi) Cost Records
We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, prescribed by the Central Government under section 148(1 )(d) of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed accounts and cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) Statutory Dues
According to the information and explanations given to us, in respect of statutory dues:
a) The Company has generally been regular in depositing its undisputed statutory dues including Provident Fund, Income-tax, Sales Tax, Service tax, Customs duty, Excise duty, Value Added Tax, GST, cess and other material statutory dues applicable to it to the appropriate authorities.
b) No undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 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, Service Tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on March 31, 2018 on account of disputes are given below:
Name of Statute |
Nature of Dues |
Forum where dispute is pending |
Period/between various periods to which the amount relates |
Amount involved excluding interest and penalty ('' in Lakhs) |
Amount unpaid excluding interest and penalty ('' in Lakhs) |
Income Tax Act, 1961 |
Income Tax |
Assessing Officer |
FY 2016-17 |
1.68 |
1.68 |
Commissioner (Appeals) |
FY 2012-13 |
1,133.90 |
904.90 |
||
Central Excise Act, 1994 |
Excise Duty |
High Court- Ahmadabad |
FY 1986 to 1989 FY 1997-2001 |
3,486.77 |
1,768.47 |
CESTAT |
FY 2007 to 2009 FY 2011 to 2015 |
7,259.96 |
7,243.96 |
||
Superintendent / Assistance / Deputy / Joint commissioner of Central Excise |
FY1991-1992 FY 1991-1993 FY 1993-1995 FY 2000-2001 FY 2010-2014 |
146.98 |
146.98 |
||
Finance Act, 1994 |
Service Tax |
Supreme court |
Jul-2010 to Mar- 2013 |
11.51 |
10.36 |
CESTAT |
FY 2012-2014 |
159.75 |
147.5 |
||
CESTAT |
Sept-2005 to Jun- 2012 |
134.95 |
67.95 |
||
Commissioner (Appeals) |
FY 2015-2017 |
2.50 |
2.50 |
||
Commissioner (Appeals) |
Apr 2013 to Sept 2016 |
47.01 |
43.81 |
||
Asst. / Deputy / Joint Commissioner |
FY 2012-2013 |
2.11 |
2.11 |
||
Asst. / Deputy / Joint Commissioner |
Apr-1998 to Aug-1999 Apr-2005 to Sept-2016 |
14.67 |
14.67 |
||
Gujarat Value added tax Act, 2003 |
Gujarat Value Added Tax |
Joint / Dy. Commissioner of Commercial Tax |
FY 2006-07 to 2012-13 |
2,886.83 |
2,586.83 |
Central Sales Tax Act, 1956 |
Central Sales Tax |
Additional Commissioner of Sales Tax, Delhi |
FY 1998-99 |
0.14 |
0.14 |
Central Sales Tax |
Assistance Commissioner of Sales Tax, West Bengal |
FY 1995-96 |
2.21 |
2.21 |
|
Central Sales Tax |
Joint / Dy. Commissioner of Commercial Tax |
FY 2006-07 to 2010-11 |
2,754.92 |
2,579.92 |
(viii) In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of loans or borrowings to the financial institutions & banks. The Company has not taken any loans or borrowings from Government and has not issued any debentures.
(ix) In our opinion and according to the information and explanations given to us, the money raised by way of debt instruments & term loans during the year have been applied by the Company for the purpose for which they were raised. During the year, the Company has not raised moneys by way of public offer
(x) In our opinion and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information & explanations given to us, the company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Companies Act, 2013.
(xii) The company is not a Nidhi Company and hence reporting under clause (xii) of the paragraph 3 of the order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us, all the transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable, and the details of related party transactions have been disclosed in the standalone Ind AS financial statements etc., as required by the applicable accounting standards.
(xiv) During the year company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of paragraph 3 of the order is not applicable.
(xv) In our opinion and according to the information and explanations given to us, during the year, the company has not entered into any non-cash transaction with its directors or persons connected with him and hence reporting under clause (xv) of paragraph 3 of the order is not applicable.
(xvi) In our opinion and according to the information and explanations given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For T R Chadha & Co LLP
Firmâs Reg. No-: 006711N/N500028
Chartered Accountants
Brijesh Thakkar
Place: Gandhinagar Partner
Date: 16/05/2018 Membership No 135556
Mar 31, 2017
Independent Auditorsâ Report
TO THE MEMBERS OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs 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 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide 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 explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to the following matter in the Notes to the standalone Ind AS financial statements:
Note 45 which describes the Company''s past subsidy claims matter and the eligibility of claims for the period from 18th March, 2013 to 5th March, 2017 amounting to Rs. 66,287 lakhs pending examination by Fertilizer Industry Coordination Committee. The Company is reasonably certain that its subsidy claims for the aforesaid period, which are in line with the claims recently agreed for period from 01st April 2010 to 17th March 2013, will be agreed by the Department of Fertilizers.
Our opinion is not modified in respect of the above 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 the extent applicable that:
a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and 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 financial position in its standalone Ind AS financial statements. Refer Note 39 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.
2. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 1 (f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(Referred to in paragraph 1 (f) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Gujarat State Fertilizers and Chemicals Limited (âthe Companyâ) as of 31st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the 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 given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of 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 explanations given to us, the management is in process of reconciling fixed assets physically verified during the year with the fixed assets as per register maintained and does not expect any material discrepancy.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / Letter of Award provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.
In respect of immovable properties of land and buildings that have been taken on lease and disclosed as Property, Plant and Equipment (fixed asset) in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement, except as stated in table below.
Particulars of the land |
Amount Rs, lacs (Carrying amount as at the balance sheet date) |
Remarks |
Leasehold land at Nandesari admeasuring to 82,383 square meters |
29.39 |
The title deeds are in the name of Polymer Corporation of Gujarat Limited, erstwhile company that was merged with the Company under Section 391 to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court(s) of judicature. |
(ii) As explained to us, the inventories, except goods-in-transit, were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposits during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on 31st March, 2017 on account of disputes are given below:
Name of statute |
Nature of dues |
Forum where dispute is pending |
Period / between various periods to which the amount relates |
Amount involved (excluding interest and penalty Rs, in lacs) |
Amount unpaid (excluding interest and penalty Rs, in lacs) |
Income Tax Act, 1961 |
Income Tax |
Income Tax Appellate Tribunal |
FY 1991-92; FY 2006-07; & FY 2009-10 |
2,796.96 |
122.52 |
Income Tax |
Assessing Officer |
FY 1998-99 |
107.17 |
Nil |
|
Income Tax |
Commissioner (Appeals) |
FY 2003-04 & FY 2011-12 |
1,531.24 |
455.38 |
|
Central Excise Act, 1944 |
Excise Duty |
High Court - Ahmadabad |
FY 1997-98 & FY 2008-09 |
3,486.77 |
1,768.47 |
CESTAT |
Mar 2007 to Mar 2012 |
397.27 |
381.27 |
||
Asst. Commissioner / Dy. Commissioner |
FY 1991-92; FY 1993-94; FY 1994-95 & Feb 2000 to Feb 2001 |
146.98 |
146.98 |
||
Superintend-ent |
Oct 2015 to Sep 2016 |
9.76 |
9.76 |
||
Finance Act, |
Service Tax |
Supreme Court |
Jul 2010 to Mar 2013 |
11.51 |
10.36 |
1994 |
CESTAT |
Jun 2005 to Dec 2014 |
338.22 |
254.83 |
|
Commissioner (Appeals) |
Apr 2013 to Mar 2016 |
20.45 |
18.92 |
||
Commissioner (Service Tax) |
Apr 1998 to Dec 2014 |
54.03 |
50.38 |
||
Asst. Commissioner / Deputy Commissioner |
Apr 2005 to Feb 2016 |
29.74 |
29.74 |
||
Superintend-ent |
Oct 2015 to Aug 2016 |
2.37 |
2.37 |
Customs Act, 1962 |
Custom Duty |
Assistant Commissioner of Customs |
FY 2013-14 |
3.19 |
3.19 |
Gujarat Value added tax Act, 2003 |
Gujarat Value Added Tax |
Joint / Dy. Commissioner of Commercial Tax |
FY 2006-07 to FY 2011-12 |
2,216.14 |
2,216.14 |
Central Sales Tax Act, 1956 |
Central Sales Tax |
Additional Commissioner of Sales Tax, Delhi |
FY 1998-99 |
0.14 |
0.14 |
Central Sales Tax |
Gujarat Commercial Tax Tribunal |
FY 2006-07 to FY 2010-11 |
2,754.92 |
2,754.92 |
|
Central Sales Tax |
Asst./ Addl. Commissioner of Sales Tax, Kolkata |
FY 1998-99 |
2.21 |
2.21 |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks. The Company has not taken any loans or borrowings from Government and has not issued any debentures.
(ix) In our opinion and according to the information and explanations given to us, the money raised by way of term loan have been applied by the Company during the year for the purposes for which it was raised. During the year, the Company has not raised moneys by way of public offer.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) According to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable Indian accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm''s Registration No. 117364W)
(Gaurav J Shah)
Place : Gandhinagar (Partner)
Date : 29th May, 2017 (Membership No. 35701)
Mar 31, 2016
We have audited the accompanying standalone financial statements of
GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED ("the Company"), which
comprise the Balance Sheet as at 31st March, 2016, the Statement of
Profit and Loss and the Cash Flow Statement for the year then ended,
and a summary of the significant accounting policies and other
explanatory information.
Management''s Responsibility for the Standalone 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 of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2016, and its profit and its cash flows for the year
ended on that date.
Emphasis of Matter
We draw attention to Note 37 to the standalone financial statements
regarding the basis on which the Company has continued to recognise
revenue of Rs. 18,836 lakhs for the current year (Previous year Rs.
17,853 lakhs) and trade receivables of Rs. 84,375 lakhs as at March 31,
2016 (as at March 31, 2015 Rs. 65,490 lakhs) in respect of subsidy on
Ammonium Sulphate as stated in the note, till ultimate outcome of the
matter, which is pending with the Department of Fertilizers to examine
the Company''s representations as per the orders of the Honourable Delhi
High Court.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 best of 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 the Company so far as it appears from our examination of those
books.
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 aforesaid standalone financial statements comply
with the Accounting Standards prescribed under section 133 of the Act,
as applicable.
e) On the basis of the written representations received from the
directors as on 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
f) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting.
g) With respect to the other matters to be included in the Auditor''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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 29 to the
financial statements
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. 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 B" a statement on the matters specified
in paragraphs 3 and 4 of the Order.
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, including quantitative details and situation of 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
verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deed / transfer deed provided to us, we report that, the title
deeds, comprising all the immovable properties of land and buildings
which are freehold, are held in the name of the Company as at the
balance sheet date. In respect of immovable properties of land and
buildings that have been taken on lease and disclosed as fixed asset in
the financial statements, the lease agreements are in the name of the
Company, where the Company is the lessee in the agreement.
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals and no
material discrepancies were noticed on physical verification
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the register maintained under section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73 to 76 or any other relevant provisions of the Companies Act, 2013
and the Companies (Acceptance of Deposits) Rules, 2014, as amended,
with regard to the deposits accepted. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal.
(vi) The maintenance of cost records has been specified by the Central
Government under section 148(1) of the Companies Act, 2013. We have
broadly reviewed the cost records maintained by the Company pursuant to
the Companies (Cost Records and Audit) Rules, 2014, as amended
prescribed by the Central Government under sub-section (1) of Section
148 of the Companies Act, 2013, and are of the opinion that, prima
facie, the prescribed cost records have been made and maintained. We
have, however, not made a detailed examination of the cost records with
a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Income-tax, Sales Tax,
Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other
material statutory dues applicable to it to the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty,
Value Added Tax, cess and other material statutory dues in arrears as
at March 31, 2016 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on March 31, 2016 on account of disputes are given below:
(Rs. in Lakhs)
Name of Nature of Forum where
Statute Dues Dispute is Pending
Income Tax Act, 1961 Income Tax Upto Income Tax Appellate
Tribunal
Central Excise Act, 1944 Excise Duty Supreme Court
High Court
Upto CESTAT
Gujarat Value Gujarat Value Jt/DyCommissioner
Added Tax Act, 2003 Added Tax of Commercial Tax
Central Sales Tax Central Sales Tax Gujarat Commercial
Act, 1956 Tax Tribunal
Central Sales Tax Central Sales Tax Assistant/Additional
Act, 1956 Commissioner of
Sales Tax, Kolkata
Name of Statute Period to which Amount
the Amount (excluding
interest
Relates & penalty)
Income Tax Act,1961 F.Y. 1991-92 & 122.52^
FY 2006-07
Central Excise Act,1944 12.55#
Various years from 1718.30#
1985-86 to 2014-15
1,718.30#
855.12#
Gujarat Value Added
Tax Act, 2003 Various years 1,414.25#
from 2006-07 to 2010-11
Central Sales Tax Act,1956 Various years from 2,539.92**
2006-07 to 2010-11
Central Sales Tax Act,1956 1995-96 & 1997-98 2.21***
^ Net of Rs. Nil paid under potest
# Net of Rs. 1832.30 lakhs paid under protest
* Net of Rs. 140 lakhs paid under protest
** Net of Rs. 215 lakhs paid under protest
*** Net of Rs. Nil paid under protest
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to banks. The Company has not issued any debentures.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments) or term loans and
hence reporting under clause (ix) of the CARO 2016 Order is not
applicable.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or directors of its holding,
subsidiary or associate company or persons connected with them and
hence provisions of section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under section 45-I
of the Reserve Bank of India Act, 1934.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm''s Registration No. 117364W)
(Gaurav J Shah)
Place : Gandhinagar (Partner)
Date : May 24,2016 (Membership No. 35701)
Mar 31, 2015
We have audited the accompanying standalone financial statements of
GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED ("the Company"), which
comprise the Balance Sheet as at 31st March, 2015, the Statement of
Profit and Loss, the Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and other explanatory
information.
Management''s Responsibility for the Standalone 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 of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies(Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, 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
audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) To the best of our information and according to the explanations
given to us, there are no financial transactions or matters which have
any adverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors
as on 31st March, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2015, from
being appointed as a director in terms of Section 164 (2) of the Act.
g) With respect to the other matters to be included in the Auditor''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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 29 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditors Report
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) 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
verification.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
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
verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the Register maintained
under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services and during the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
system.
(v) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73 to 76 or any other relevant provisions of the Companies Act, 2013
and the Companies (Acceptance of Deposits) Rules, 2014, as amended,
with regard to the deposits accepted. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended and prescribed by the Central Government under sub-section
(1) of Section 148 of the Companies Act, 2013, and are of the opinion
that, prima facie, the prescribed cost records have been made and
maintained. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
(vii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Income-tax, Sales Tax,
Service Tax, Customs Duty, Excise Duty, Value Added Tax and other
material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty,
Value Added Tax and other material statutory dues in arrears as at 31st
March, 2015 for a period of more than six months from the date they
became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax and Excise
Duty which have not been deposited as on 31st March, 2015 on account of
disputes are given below:
Name of Nature of Forum where
Statute Dues Dispute is
Pending
Income Tax Act, 1961 Income Tax Upto Income Tax
Appellate Tribunal
Gujarat Value Gujarat Value Jt/DyCommissioner
Added Tax Act, 2003 Added Tax of Commercial Tax
Central Sales Tax Central Sales Tax Gujarat Commercial
Act, 1956 Tax Tribunal
Central Excise Act, 1944 Excise Duty High Court
UptoCESTAT
Name of Period to which Amount
Statute the Amount Involved
Relates (Rs. in Lakhs)#
Income Tax Act, 1961 F.Y. 1991-92 & 122.52
FY 2006- 07
Gujarat Value Various years 1,318.75
Added Tax Act, 2003 from 2006-07 to 2010-11
Central Sales Tax Various years from 2,579.92
Act, 1956 2006-07 to 2010-11
Central Excise Act, 1944 Various years from 1,721.06
1985-86 to 2014-15 853.69
# excluding interest & penalty
(d) The Company has been generally regular in transferring amounts to
the Investor Education and Protection Fund in accordance with the
relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules
made thereunder within time.
(viii) The Company does not have accumulated losses at the end of the
financial year and the Company has not incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institution. The Company has not issued any
debentures.
(x) 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.
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
Firm''s Registration No. 117364W
Gaurav J Shah
Place : New Delhi Partner
Date : May 14,2015 Membership No. 35701
Mar 31, 2014
We have audited the accompanying financial statements of GUJARAT STATE
FERTILIZERS & CHEMICALS LIMITED ("the Company"), which comprise the
Balance Sheet as at 31st March , 2014, the Statement of Profit and Loss
and the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 ("the Act") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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
audit.
(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
those books.
(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 comply with the Accounting Standards
notified under the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs).
(e) On the basis of the written representations received from the
directors as on 31st March, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2014
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Annexure to the Auditors'' Report
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date on the accounts of
Gujarat State Fertilizers & Chemicals Limited for the year ended on
31st March, 2014)
Having regard to the nature of the Company''s
business/activities/results during the year, clauses (xii), (xiii),
(xiv), (xviii), (xix) and (xx) of paragraph 4 of the Order are not
applicable to the Company.
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified 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 explanations
given to us, no material discrepancies were noticed on such
verification.
(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.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at regular intervals.
(b) In our opinion and according to the information and explanations
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 inventory and
no material discrepancies were noticed on physical verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services and during the course of our audit we have not observed any
continuing failure to correct major weaknesses in such internal control
system.
(v) 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, there are no contracts or arrangements
that need to be entered in the Register maintained under the said
section.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A, 58AA or any other relevant provisions of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
the deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal.
(vii) In our opinion, the internal audit functions carried out during
the year by firms of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(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 protection fund,
employees'' state insurance, income tax, sales tax, wealth tax, service
tax, custom duty, excise duty and other material statutory dues
applicable to it with appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident
fund, income tax, sales tax, wealth tax, service tax, customs duty,
excise duty and other material statutory dues in arrears, as at 31st
March, 2014 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,
customs duty, excise duty and cess which have not been deposited as on
31st March, 2014 on account of any dispute are given below:
Name of Nature of Forum where
Statute Dues Dispute is
Pending
Central Excise Act,1944 Excise & Up to CESTAT
& Customs Act, 1962 Custom Duties High Court
Central Sales Tax Act Sales Tax Up to Joint
and Sales Tax Act of Commissioner
various states.
Income Tax Act, 1956 Income Tax ITAT (Appeals)
C.I.T.(Appeals)
Name of Statue Period to which Amount
the Amount Involved
Relates (Rs. in Lakhs)*
Central Excise Act, 194-
& Customs Act, 1962 Various years from 1016.89
1986-87 to 2013-14 3436.60
Central Sales Tax Act
and Sales Tax Act of
various states. Various years from 3075.68
1995-96 to 2008-09
Income Tax Act, 1956 Various years from 266.78
1991-92 to 2010-11 453.80
* excluding interest and penalty
(x) The Company does not have any accumulated losses of the Company at
the end of the financial year and it has not incurred cash losses in
the current and immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to bank
or financial institution.
(xii) 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.
(xiii) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
(xiv) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, we report that the funds raised on short-term basis have,
prima facie, not been used for long-term investment.
(xv) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
Firm''s Registration No. 117364W
Gaurav J Shah
Place : Gandhinagar Partner
Date : May 13, 2014 Membership No. 35701
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of GUJARAT STATE
FERTILIZERS & CHEMICALS LIMITED ("the Company"), which comprise the
Balance Sheet as at 31st March , 2013, the Statement of Profit and Loss
and the Cash Flow Statement for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211
(3C) of the Companies Act, 1956 ("the Act") and in accordance with
the accounting principles generally accepted in India. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Company''s internal control. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
("the Order") issued by the Central Government in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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
audit.
(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
those books.
(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 comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on 31st March, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
(Referred to in paragraph 1 under ''Report on Other Legal and
Regulatory Requirements'' section of our report of even date on the
accounts of Gujarat State Fertilizers & Chemicals Limited for the year
ended on 31st March, 2013)
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified 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 explanations
given to us, no material discrepancies were noticed on such
verification.
(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.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at regular intervals.
(b) In our opinion and according to the information and explanations
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 inventory and
no material discrepancies were noticed on physical verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services and during the course of our audit we have not observed any
continuing failure to correct major weaknesses in such internal control
system.
(v) 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, there are no contracts or arrangements
that need to be entered in the Register maintained under the said
section.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A , 58AA or any other relevant provisions of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules, 1975 with regard to
the deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal.
(vii) In our opinion, the internal audit functions carried out during
the year by firms of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(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 protection fund,
employees'' state insurance, income tax, sales tax, wealth tax,
service tax, custom duty, excise duty and other material statutory dues
applicable to it with appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident
fund, income tax, sales tax, wealth tax, service tax, customs duty,
excise duty and other material statutory dues in arrears, as at 31st
March, 2013 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,
customs duty, excise duty and cess which have not been deposited as on
31st March, 2013 on account of any dispute are given below:
Name of Nature of Forum where Period to which Amount
Statute Dues Dispute is the Amount Involved
Pending Relates (Rs. in
Lakhs)*
Central
Excise
Act, 1944 Excise & Up to CESTAT Various years
from 4656.22
& Customs
Act,1962 Custom Duties High Court 1986-87 to 2012-13 2.76
Central
Sales Tax
Act Sales Tax Up to Joint Various Years From 3232.63
and Sales
Tax Act of Commissioner 1995-96 to 2008-09
various
States.
Income
Tax Act,
1956 Income Tax ITAT (Appeals) Various years from 366.78
C.I.T
(Appeals) 1991-92 to 2009-10 616.65
* excluding interest and penalty
(x) The Company does not have any accumulated losses of the Company at
the end of the financial year and it has not incurred cash losses in
the current and immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to bank
or financial institution.
(xii) Based on our examination of records and the information and
explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the Company.
(xv) 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.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
(xvii) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, we report that the funds raised on short-term basis have,
prima facie, not been used for long-term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
the Companies Act, 1956 during the year.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has not issued any
debentures.
(xx) According to the information and explanations given to us, during
the period covered by our audit report, the Company has not raised any
money by way of public issues.
(xxi) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
Firm Registration No. 117364W
Gaurav J Shah
Place : Vadodara Partner
Date : 16th May, 2013 Membership No. 35701
Mar 31, 2012
1. We have audited the attached Balance Sheet of Gujarat State
Fertilizers & Chemicals Limited as at 31st March, 2012 and Statement of
Profit and Loss and the Cash Flow Statement for the year ended on that
date. 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by 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 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Government of India in terms of sub-section (4A) of
section 227 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 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 audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) the Balance Sheet, 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, Statement of Profit and Loss and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
(e) On the basis of written representations received from certain
directors of the Company and from the management in respect of other
directors exempted vide General Circular No. 8/2001-CLV dated
22/03/2002 issued by Ministry of Law, Justice and Company Affairs,
Department of Company Affairs and 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 clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(f) 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 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 for the
year ended on that date.
Annexure to the Auditors Report (Referred to in paragraph 3 of our
Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation, of its fixed
assets.
(b) As explained to us, all major items of fixed assets were physically
verified by the Management at the end of the year, in accordance with
the regular programme of verification which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. No material discrepancy was noticed on such physical
verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year as would affect its going concern status.
(ii) (a) In our opinion, physical verification of inventory has been
conducted by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the Management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
(iii) (a) As per the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956.
(b) As per the information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory, fixed assets and with regard to the sale of
goods and services.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the Register maintained under that Section;
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
58A and 58AA or any other relevant provision of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules 1975 with regard to
the deposits accepted from the public. We are informed by the
management that, no order has been passed by the Company Law Board or
National Company Law Tribunal, Reserve Bank of India or any court or
any other tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records.
(ix) (a) According to the information given to us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues and the Company had no arrears of such outstanding
statutory dues as at 31st March, 2012 for a period more than six months
from the date they became payable.
(b) According to the information and explanations given to us, the
Company had no disputed outstanding statutory dues as at 31st March,
2012, except as enumerated here under :
Nature of the Dues Amount (Rs. in Lakhs) Forum where dispute
is pending
Excise & Custom
Duties 5323.46 Up to CESTAT
2.76 High Court
Sales Tax 3555.86 Up to Tribunal
Income Tax 130.81 C.I.T. (Appeals)
268.29 ITAT (Appeals)
(x) The Company does not have any accumulated losses as at 31st March,
2012 and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
(xi) As per the information and explanations given to us, the Company
has not defaulted in the repayment of dues to financial institutions,
banks or debenture holders during the year.
(xii) As per the information and explanations given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company does not deal or trade in shares, securities,
debentures and other investments.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by other from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, no term loans were availed by the Company.
(xvii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short-term basis have been
utilized for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures during the year under
review.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For Prakash Chandra Jain & Co.
Chartered Accountants
Firm Registration No. 002438C
P. C. Nalwaya
Place : Gandhinagar Partner
Date : 30-05-2012 Membership No. 33710
Mar 31, 2011
1. We have audited the attached Balance Sheet of Gujarat State
Fertilizers & Chemicals Limited as at 31st March, 2011 and the Profit
and Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto in which are incorporated the accounts of the
Polymers Unit and Fibre Unit of the Company, audited by another firm of
Chartered Accountants. 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by 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 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Government of India in terms of sub-section (4A) of
section 227 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. Attention is drawn to Note No. 12 of Schedule 22 regarding non
provision of wage revision.
5. Further to our comments in the Annexure referred to 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 audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) the Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
(e) On the basis of written representations received from certain
directors of the Company and from the management in respect of other
directors exempted vide General Circular No. 8/2001-CLV dated
22/03/2002 issued by Ministry of Law, Justice and Company Affairs,
Department of Company Affairs and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with para 4 above
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 2011;
(ii) in the case of the Profit and Loss Account, 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 for the
year ended on that date.
Annexure to the Auditors' Report
(Referred to in paragraph 3 of our Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation, of its fixed
assets.
(b) As explained to us, all major items of fixed assets were physically
verified by the Management at the end of the year, in accordance with
the regular programme of verification which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. No material discrepancy was noticed on such physical
verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year as would affect its going concern status.
(ii) (a) In our opinion, physical verification of inventory has been
conducted by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the Management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
(iii) (a) As per the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. (b) As per the information and
explanations given to us, the Company has not taken any loans, secured
or unsecured, from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory, fixed assets and with regard to the sale of
goods and services. During the course of audit, we have not observed
any continuing failure to correct major weakness in Internal Control
System.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the Register maintained under that Section;
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
58A and 58AA or any other relevant provision of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules 1975 with regard to
the deposits accepted from the public. We are informed by the
management that, no order has been passed by the Company Law Board or
National Company Law Tribunal, Reserve Bank of India or any court or
any other tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records.
(ix) (a) According to the information given to us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues and the Company had no arrears of such outstanding
statutory dues as at 31st March, 2011 for a period more than six months
from the date they became payable.
(b) According to the information and explanations given to us, the
Company had no disputed outstanding statutory dues as at 31st March,
2011, except as enumerated here under :
Nature of the Dues Amount
(Rs. in Lakhs) Forum where dispute is
pending
Excise & Custom Duties 4513.45 Up to Tribunal
2.76 High Court
Sales Tax 461.51 Up to Tribunal
Income Tax 160.35 C.I.T. (Appeals)
1.51 ITAT
(x) The Company does not have any accumulated losses as at 31st March,
2011 and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
(xi) As per the information and explanations given to us, the Company
has not defaulted in the repayment of dues to financial institutions,
banks or debenture holders during the year.
(xii) As per the information and explanations given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company does not deal or trade in shares, securities,
debentures and other investments.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by other from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, no term loans were availed by the Company.
(xvii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short-term basis have been
utilized for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures during the year under
review.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For Prakash Chandra Jain & Co.
Chartered Accountants
Firm Registration No. 002438C
Prakash Chandra Nalwaya
Place : Gandhinagar Partner
Date : 27-05-2011 Membership No. 33710
Mar 31, 2010
1. We have audited the attached Balance Sheet of Gujarat State
Fertilizers & Chemicals Limited as at 31st March, 2010 and the Profit
and Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto in which are incorporated the accounts of the
Polymers Unit and Fibre Unit of the Company, audited by another firm of
Chartered Accountants. These financial statements are the
responsibility of the Companys 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by 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 (AuditorÃs Report) Order, 2003 as
amended by the Companies (Auditors Report) (Amendment) Order, 2004,
issued by the Government of India in terms of sub-section (4A) of
section 227 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. Attention is drawn to Note No. 9 of Schedule 22 regarding providing
of the difference between the estimated rate and the base rate of
concession on DAP and Complex fertilizers of Rs. 5389 lacs pending
notification of final rate of concession by Government of India.
5. Further to our comments in the Annexure referred to 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 audit;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) the Balance Sheet, the Profit and Loss Account 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 Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
(e) On the basis of written representations received from certain
directors of the Company and from the management in respect of other
directors exempted vide General Circular No. 8/2001-CLV dated
22/03/2002 issued by Ministry of Law, Justice and Company Affairs,
Department of Company Affairs and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with para 4 above
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 2010;
(ii) in the case of the Profit and Loss Account, 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 for the
year ended on that date.
Annexure to the Auditors Report
(Referred to in paragraph 3 of our Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation, of its fixed
assets.
(b) As explained to us, all major items of fixed assets were physically
verified by the Management at the end of the year, in accordance with
the regular programme of verification which in our opinion is
reasonable, having regard to the size of the Company and nature of its
assets. No material discrepancy was noticed on such physical
verification.
(c) The Company has not disposed off any substantial part of its fixed
assets during the year as would affect its going concern status.
(ii) (a) In our opinion, physical verification of inventory has been
conducted by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedure of physical verification of inventory
followed by the Management is reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company is maintaining proper records of inventory. No
material discrepancy was noticed on physical verification of the
inventory.
(iii) (a) As per the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956.
(b) As per the information and explanations given to us, the Company
has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory, fixed assets and with regard to the sale of
goods and services.
During the course of audit, we have not observed any continuing failure
to correct major weakness in Internal Control System.
(v) (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the Register maintained under that Section;
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
58A and 58AA or any other relevant provision of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules 1975 with regard to
the deposits accepted from the public. We are informed by the
management that, no order has been passed by the Company Law Board or
National Company Law Tribunal, Reserve Bank of India or any court or
any other tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. However, we have
not made a detailed examination of the records.
(ix) (a) According to the information given to us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues and the Company had no arrears of such outstanding
statutory dues as at 31st March, 2010 for a period more than six months
from the date they became payable.
(b) According to the information and explanations given to us, the
Company had no disputed outstanding statutory dues as at 31st March,
2010, except as enumerated here under :
Nature of the Dues Amount (Rs. in Lakhs) Forum where dispute is pending
Excise & Custom
Duties 478.65 Up to Tribunal
8.36 High Court
Sales Tax 1580.16 Up to Tribunal
Income Tax 3736.73 C.I.T. (Appeals)
1.51 ITAT
(x) The Company does not have any accumulated losses as at 31st March,
2010 and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
(xi) As per the information and explanations given to us, the Company
has not defaulted in the repayment of dues to financial institutions,
banks or debenture holders during the year.
(xii) As per the information and explanations given to us, the Company
has not granted any loans or advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company does not deal or trade in shares, securities,
debentures and other investments.
(xv) In our opinion, the terms and conditions on which the Company has
given guarantees for loans taken by other from banks or financial
institutions are not prejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
(xvii) In our opinion and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet of the
Company, we report that no funds raised on short-term basis have been
utilized for long-term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures during the year under
review.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the year
under review.
For S. C. BAPNA & ASSOCIATES
Chartered Accountants
Firm Registration No. 115649W
Jaiprakash Gupta
Place:Gandhinagar Partner
Date :27-05-2010 Membership No. 088903