Mar 31, 2023
Gujarat Narmada Valley Fertilizers & Chemicals Limited Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited (the "Company"), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss, including Other Comprehensive Income, the Statement of Changes in Equity and the 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 "the 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, as amended (the "Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standard prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules 2015 as amended ("Ind AS") and the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, the profit and 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), as 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'' i ssued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the 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 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.
Emphasis of Matter
We draw attention to note 43(B) to the standalone financial statements regarding a matter relating to demand of '' 21,370 crores (including interest and penalty computed till November 30, 2021) on the Company by Department of Telecommunications (DoT) towards Very Small Aperture Terminal (''VSAT'') and Internet Service Provider (''ISP'') Licenses fee relating to earlier years. Based on the legal assessment in consultation with Senior Advocates of the said demand, the Company is of the view that no provision is required to be made at this point of time in respect of above matter.
Our opinion is not modified in respect of the above matter.
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 for the financial year ended 31 March 2023. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Recognition and measurement of Urea Subsidy Income |
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The Urea Subsidy Income is recognized and measured by the Company in accordance with notification/ circular/ policies issued by the Department of Fertilizers, Government of India. During the year ended March 31, 2023, the Company has recognized Urea Subsidy Income of '' 2,557.44 crores and has outstanding Urea subsidy receivables of '' 113.33 crores. The measurement of Urea Subsidy Income involves application of relevant regulatory pronouncements and notifications, understanding of applicable energy norms, and management estimates / judgements including in respect of escalation / de-escalation in the price of the inputs, etc. for the year The recognised subsidy income may deviate on account of revision / changes in such interpretation, estimates and judgements, arising from notification by the Department of Fertilizers. Accordingly, recognition and measurement of subsidy income is determined to be a key audit matter for our audit of standalone financial statements. |
Our audit procedures included the following: ⢠We assessed the Company''s revenue recognition policy for Urea Subsidy Income. ⢠We understood, evaluated and tested, on a sample basis, the design and operating effectiveness of key internal controls over recognition and measurement of Urea Subsidy Income. ⢠We reviewed the relevant regulatory pronouncement in respect of Urea Subsidy Income and verified, on a sample basis, the claims filed by the Company along-with underlying accounting evidence in respect of such income. ⢠We tested calculations for Urea Subsidy Income and reviewed estimates for escalation / de-escalation by comparing with actual production cost relevant for measurement of subsidy amount. ⢠We reviewed follow-ups made by the Company with the Department of Fertilizers, Government of India and management assessment of recoverability of aged balances. ⢠We tested the collections made during the year as well as subsequent period against such subsidy income recognized by the Company. ⢠We assessed the appropriateness of disclosures in the Standalone financial statements in respect of Urea Subsidy Income. |
Valuation of Inventories, including Stores and Spares |
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The Company has total inventory of '' 1,123.21 crores which comprises of raw material inventory '' 388.97 crores, work-in-progress inventory '' 38.32 crores, finished goods inventory '' 177.76 crores, trading inventory '' 2.78 crores and stores and spares inventory (including coal inventory of '' 95.33 crores) '' 515.38 crores (net of provision for excess inventory) as at March 31,2023. The Company has created a provision of '' 24.52 crores against inventory of stores and spares based on evaluation of its usability including for aged items. Accordingly, appropriateness of the estimates used to identify the valuation of inventories, including stores and spares is determined to be a key audit matter for our audit of standalone financial statements. |
Our audit procedures included the following: ⢠We reviewed the management policy for physical verification and the documents related to management''s physical count procedure actually followed during the year ⢠We understood the management process for assessment of value in use/ net realisable value of various class of inventories and making provision for excess inventory. ⢠We reviewed the management''s judgement applied in estimating the value of excess inventory for stores & spares, taking into consideration management assessment of the present and future condition of the inventory. ⢠We performed substantive audit procedures that included review of working prepared by the management for valuation of inventories and observed that appropriate allocation of fixed cost and variable cost is done in respect of Finished Goods and Work in Progress which is in lines with prevailing accounting standards. |
⢠We have performed Physical verification of inventories as at March 31,2023. Our procedures did not identify any material exceptions. |
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Evaluation of uncertain tax demand positions and other legal litigations |
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The Company has material uncertain tax demand positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes and significant open legal proceedings under arbitration and courts for various matters with its contractors / vendors and in Government departments, continuing from earlier years which are part of Contingent Liability. Due to complexity involved in these litigation matters, management''s judgement regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. |
Our audit procedures included the following: ⢠We have obtained details of completed tax assessments and demands as at 31 March 2023 from the management. ⢠We have inquired with the management, including in- house legal experts. ⢠We have reviewed the minutes of the meetings and those charged with governance, and correspondence between the Company and the external legal experts and other evidence to corroborate management assessment in respect of disputed tax matters. ⢠We have assessed the management''s position through discussions with the in-house legal expert and external legal opinions obtained by the Company (where considered necessary) on both, the probability of success in the aforesaid cases, and the magnitude of any potential loss. ⢠We have discussed with the management on the development in the litigations during the year ended 31 March 2023 and provision for contingencies of '' 53.27 crores made during the Financial Year 2022-2023. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report (i.e. Directors'' Report, Corporate Governance and Management Discussion and Analysis), but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such 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 Relating to Other Information''.
Responsibilities of Management for the Standalone Financial Statements
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 including other 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 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended including the Companies (Indian Accounting Standards) Amendment Rules, 2020. 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 the 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.
Auditorâs 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 standalone 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 with reference to these financial statements 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 for the financial year ended March 31,2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter 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.
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 1" 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 the Statement of Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash flows 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 Companies (Indian Accounting Standards) Rules, 2015, 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 over financial reporting of the Company with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(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 remuneration paid/ provided by the Company to its directors including sitting fees paid to directors, during the year is in accordance with the provisions of section 197 read with Schedule V to 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 36(A) to the standalone financial statements;
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 - Refer Note 21 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) 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 or entity, including foreign entity ("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;
(b) The management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;
(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 misstatement.
v. (a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in
accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors of the Company have 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 Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
For Suresh Surana & Associates LLP
Chartered Accountants Firm''s Reg. No. 121750W/W-100010
Partner
Place: Mumbai Membership No.: 102306
Dated: 18 May 2023 UDIN: 23102306BGWKUN5359
Mar 31, 2022
Gujarat Narmada Valley Fertilizers & Chemicals Limited Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited (the "Company"), which comprise the Balance Sheet as at March 31 2022, the Statement of Profit and Loss, including Other Comprehensive Income, the Statement of Changes in Equity and the 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 "the 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, as amended (the "Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standard prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules 2015 as amended ("Ind AS") and the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as 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'' i ssued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the 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 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.
We draw attention to note 43(B) to the standalone financial statements regarding a matter relating to demand of '' 16,359.21 crores on the Company by Department of Telecommunications (DoT) towards Very Small Aperture Terminal (''VSAT'') and Internet Service Provider (''ISP'') Licenses fee relating to earlier years. Based on the legal assessment in consultation with Senior Advocates of the said demand, the Company is of the view that no provision is required to be made at this point of time in respect of above matter.
Our opinion is not modified in respect of the above matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the Financial Year ended March 31,2022. 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. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Recognition and measurement of Urea Subsidy Income |
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The Urea Subsidy Income is recognized and measured by the Company in accordance with notification/ circular/ policies issued by the Department of Fertilizers, Government of India. During the year ended March 31, 2022, the Company has recognized Urea Subsidy Income of '' 1,658.90 crores and has outstanding Urea subsidy receivables of '' 460.13 crores. The measurement of Urea Subsidy Income involves application of relevant regulatory pronouncements and notifications, understanding of applicable energy norms, and management estimates / judgments including in respect of escalation / de-escalation in the price of the inputs, etc. for the year The recognised subsidy income may deviate on account of revision / changes in such interpretation, estimates and judgments, arising from notification by the Department of Fertilizers. Accordingly, recognition and measurement of subsidy income is determined to be a key audit matter for our audit of standalone financial statements. |
Our audit procedures included the following: ⢠We assessed the Company''s revenue recognition policy for Urea Subsidy Income. ⢠We understood, evaluated and tested, on a sample basis, the design and operating effectiveness of key internal controls over recognition and measurement of Urea Subsidy Income. ⢠We reviewed the relevant regulatory pronouncement in respect of Urea Subsidy Income and verified, on a sample basis, the claims filed by the Company along-with underlying accounting evidence in respect of such income. ⢠We tested calculations for Urea Subsidy Income and reviewed estimates for escalation / de-escalation by comparing with actual production cost relevant for measurement of subsidy amount. ⢠We reviewed follow-ups made by the Company with the Department of Fertilizers, Government of India and management assessment of recoverability of aged balances. ⢠We tested the collections made during the year as well as subsequent period against such subsidy income recognized by the Company. ⢠We assessed the appropriateness of disclosures in the Standalone financial statements in respect of Urea Subsidy Income. |
Valuation of Inventories, including Stores and Spares |
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The Company has total inventory of '' 976.97 crores which comprises of raw material inventory '' 362.44 crores, work-in-progress inventory '' 38.58 crores, finished goods inventory '' 80.04 crores, trading inventory ''14.82 crores and stores and spares inventory (including coal inventory of '' 96.28 crores) '' 481.09 crores (net of provision for excess inventory) as at March 31,2022. The Company has created a provision of '' 21.06 crores against inventory of stores and spares based on evaluation of its usability including for aged items. |
Our audit procedures included the following: ⢠We reviewed the management policy for physical verification and the documents related to management''s physical count procedure actually followed during the year ⢠We understood the management process for assessment of value in use/ net realisable value of various class of inventories and making provision for excess inventory. ⢠We reviewed the management''s judgment applied in estimating the value of excess inventory for stores & spares, taking into consideration management assessment of the present and future condition of the inventory. |
Accordingly, appropriateness of the estimates used to identify the valuation of inventories, including stores and spares is determined to be a key audit matter for our audit of standalone financial statements. |
⢠We performed substantive audit procedures that included review of working prepared by the management for valuation of inventories and observed that appropriate allocation of fixed cost and variable cost is done in respect of Finished Goods and Work in Progress which is in lines with prevailing accounting standards. ⢠We have performed Physical verification of inventories as at March 31,2022. Our procedures did not identify any material exceptions. |
Evaluation of uncertain tax demand positions and other legal litigations |
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The Company has material uncertain tax demand positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes and significant open legal proceedings under arbitration and courts for various matters with its contractors / vendors and in Government departments, continuing from earlier years which are part of Contingent Liability. Due to complexity involved in these litigation matters, management''s judgment regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. |
Our audit procedures included the following: ⢠We have obtained details of completed tax assessments and demands as at 31 March 2022 from the management. ⢠We have inquired with the management including in- house legal experts. ⢠We have reviewed the minutes of the meetings and those charged with governance, and correspondences between the Company and the external legal experts and other evidences to corroborate management assessment in respect of disputed tax matters. ⢠We have assessed the management''s position through discussions with the in-house legal expert and external legal opinions obtained by the Company (where considered necessary) on both, the probability of success in the aforesaid cases, and the magnitude of any potential loss. ⢠We have discussed with the management on the development in the litigations during the year ended 31 March 2022 and provision for contingencies of '' 55.70 crores made during the FY 2021-22. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report (i.e. Directors'' Report, Corporate Governance and Management Discussion and Analysis), but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such 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 Relating to Other Information''.
Responsibilities of Management for the Standalone Financial Statements
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 including other 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 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended including the Companies (Indian Accounting Standards) Amendment Rules, 2020. 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 the 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.
Auditorâs 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 standalone 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 with reference to these financial statements 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.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
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 for the Financial Year ended March 31,2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter 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 31 March 2021 have been audited by the predecessor auditors. The report of the predecessor auditors dated 17 May 2021 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 ("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 1" 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 the Statement of Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash flows 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 Companies (Indian Accounting Standards) Rules, 2015, as amended including the Companies (Indian Accounting Standards) Amendment Rules, 2020;
(e) On the basis of the written representations received from the directors as on March 31,2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2022 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 over financial reporting of the Company with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(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 remuneration paid/ provided by the Company to its directors during the year is in accordance with the provisions of section 197 read with Schedule V to 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 36(A) to the standalone financial statements;
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 - Refer Note 21 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) 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 or entity, including foreign entity ("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;
(b) The management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;
(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 misstatement.
v. (a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in
accordance with Section 123 of the Act, as applicable.
(b) The Board of Directors of the Company have 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.
For Suresh Surana & Associates LLP
Chartered Accountants Firm''s Reg. No. 121750W/W-100010 Ramesh Gupta
Partner
Place of Signature: Mumbai Membership No.: 102306
Date: May 9, 2022 UDIN: 22102306AIQTVQ5045
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, 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; makingjudgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the financial statements. The procedures selected depend on the auditorâsjudgment, 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 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 March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (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 Annexure 1 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 sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss including the Statement of 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2018, and 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 2â to this report;
(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, 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 36 to the standalone Ind AS 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 1 referred to in paragraph on Report on Other Legal and Regulatory Requirements of our report of even date of Gujarat Narmada Valley Fertilizers & Chemicals Limited for the year ended March 31, 2018
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a program of verification of property, plant and equipment to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties, included in property, plant and equipment are held in the name of the Company. In respect of immovable properties of land that have been taken on lease and disclosed as property, plant and equipment (Note 4) in the financial statements, the lease agreements are yet to be entered in the name of the Company, although the Company is the lessee as per the arrangement.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such 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.Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to a Company in which the Director is interested to which provisions of section 185 of the Companies Act, 2013 apply and hence not commented upon. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Companies Act 2013 in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of fertilizer and industrial products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income-Tax, Sales-Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Goods and Service Tax, cess and other material statutory dues applicable to it. The provision of employeesâ state insurance is not applicable to the Company.
(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, Goods and Service Tax, cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of Excise Duty, Service Tax, Customs Duty, Sales Tax and Value Added Tax on account of any dispute, are as follows:
Name of Statute |
Nature of dues |
Forum where dispute is pending |
Period to which the amount relates |
Amount involved (Rs. in Crores) |
Amount Unpaid1 (Rs. in Crores) |
|
Central Excise Act, 1944 |
Excise Duty |
CESTAT, Ahmedabad |
1997-2002 |
1.93 |
1.19 |
|
2002-2005 |
0.06 |
0.01 |
|
|||
2010-2016 |
1.03 |
0.95 |
|
|||
Commissioner Appeals, Vadodara |
2015-2016 |
0.52 |
0.50 |
|
||
Supreme Court, New Delhi |
2003-2005 |
12.14 |
5.69 |
|
||
Finance Act, 1994 |
Service Tax |
CESTAT, Ahmedabad |
2011-2014 |
22.37 |
19.24 |
|
Customs Act, 1962 |
Customs Duty |
Commissioner Appeals -Customs, Mumbai |
2005-2008 |
123.57 |
118.57 |
|
Central Sales Tax Act, 1994/Gujarat Value Added Tax Act, 2004 |
Value Added Tax/Central Sales Tax/ Entry Tax |
Gujarat Value added Tax tribunal, Ahmedabad |
2006-2007 |
12.41 |
11.91 |
|
2007-2008 |
17.19 |
16.69 |
|
|||
Joint Commissioner of Commercial Tax, Vadodara |
2008-2011 |
28.49 |
20.36 |
|
||
2012-2013 |
12.08 |
5.19 |
||||
Maharashtra VAT Act, 2002 |
||||||
Joint Commissioner of Sales Tax, Pune |
2010-2011 |
0.05 |
0.05 |
|
||
Madhya Pradesh VAT Act, 2002 |
VAT Appellate Authority, Bhopal |
2015-2016 |
0.11 |
0.10 |
|
* Net of amounts 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 financial institutions, banks and the government. The Company has not issued any debentures.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) of the Order is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud / material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the Company has not paid / provided managerial remuneration during the year and hence reporting under clause (xi) of the Order is not applicable to the Company and hence not commented upon.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
ANNEXURE 2 TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF GUJARAT NARMADA VALLEY FERTILIZERS & CHEMICALS LIMITED Report on the Internal Financial Controls 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 Narmada Valley 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 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 the 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.
Auditorâs 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 on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 auditorâsjudgement, 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 internal financial controls 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 authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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, 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Sukrut Mehta
Place of Signature: Ahmedabad Partner
Date: April 23, 2018 Membership Number: 101974
Mar 31, 2017
TO THE MEMBERS OF GUJARAT NARMADA VALLEY FERTILIZERS & CHEMICALS LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS)specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS 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 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, issued by the Institute of Chartered Accountants of India, as 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 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 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 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 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 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 March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 (âthe
Orderâ) issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in the Annexure 1 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 sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss including the Statement of 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 Accounting Standards specified under Section 1 33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 2â to this report;
(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, 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 36 to the standalone Ind AS financial statements;
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 - Refer Note 20 to the standalone Ind AS financial statements;
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 Note 41 to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
Other Matter
The comparative financial information of the Company for the year ended March 31, 2016 and the transition date opening balance sheet as at April 1, 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2016 and March 31, 2015 dated April 26, 2016 and May 28, 2015 respectively, expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Annexure 1 referred to in paragraph on Report on Other Legal and Regulatory Requirements of our report of even date of
Gujarat Narmada Valley Fertilizers & Chemicals Limited for the year ended March 31, 2017
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed assets.
(b) The Company has a program of verification of property, plant and equipment to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties, included in property, plant and equipment are held in the name of the Company. In respect of immovable properties of land that have been taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are yet to be entered in the name of the Company, although the Company is the lessee as per the arrangement.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such 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.Accordingly, the provisions of clause 3(iii)(a),
(b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, the Company has not advanced loans to directors / to a company in which the Director is interested to which provisions of section 185 of the Companies Act, 2013 apply and hence not commented upon. In our opinion and according to the information and explanations given to us, provisions of section 186 of the Companies Act 2013 in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of fertilizer and industrial produc ts , and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities 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. The provision of employees'' state insurance is not applicable to the Company.
(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, 2017 for a period of more than six months from the date they became payable.
(c) Details of dues of Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited on account of any dispute are as follows:
Name of Statute |
Nature of dues |
Forum where dispute is pending |
Period to which the amount relates |
Amount involved (Rs. in Crores) |
Amount Unpaid (Rs. in Crores) |
Central Excise Act, 1944 |
Excise Duty |
CESTAT |
1997-2002 |
1.93 |
1.19 |
2002-2005 |
0.06 |
0.01 |
|||
2004-2005 |
0.01 |
- |
|||
2010-2016 |
0.99 |
0.92 |
|||
Commissioner Appeals |
2015-2017 |
0.49 |
0.48 |
||
Supreme Court |
2003-2004 |
11.88 |
5.59 |
||
2004-2005 |
0.25 |
0.10 |
|||
Finance Act, 1994 |
Service Tax |
CESTAT |
2011-2012 |
10.41 |
7.80 |
2013 |
7.58 |
7.06 |
|||
Customs Act, 1962 |
Customs Duty |
CESTAT |
2002-2003 |
2.28 |
2.28 |
2011-2012 |
0.94 |
0.94 |
|||
2012-2013 |
2.54 |
2.51 |
|||
Commissioner Appeals -Customs |
2005-2008 |
116.72 |
111.72 |
||
2012-2013 |
0.03 |
0.03 |
|||
Central Sales Tax Act, 1994/ Gujarat Value Added Tax Act, 2004 |
Value Added Tax/Central Sales tax |
Gujarat Value added Tax tribunal |
2006-2007 |
11.65 |
11.15 |
2007-2008 |
16.25 |
15.75 |
|||
Joint Commissioner of Commercial Tax |
2008-2009 |
15.16 |
14.91 |
||
2009-2010 |
6.41 |
0.13 |
|||
2010-2011 |
5.48 |
3.89 |
|||
2012-2013 |
11.56 |
4.93 |
(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, banks and government. The Company has not issued any debentures.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments) and term loans hence, reporting under clause (ix) of the Order is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud / material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the Company has not paid / provided managerial remuneration during the year and hence reporting under clause (xi) of the Order is not applicable to the Company and hence not commented upon.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 to the Independent Auditorâs Report of Even Date on the Standalone Ind AS Financial Statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Gujarat Narmada Valley Fertilizers & Chemicals Limited (âthe Companyâ) as of March 31, 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 the 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) and the Standards on Auditing as specified under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 judgement, 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 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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, 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, 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.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Arpit K Patel
Place of Signature: Ahmedabad Partner
Date: May 29, 2017 Membership Number: 34032
Mar 31, 2016
TO THE MEMBERS OF GUJARAT NARMADA VALLEY FERTILIZERS & CHEMICALS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of GUJARAT NARMADA VALLEY FERTILIZERS & CHEMICALS LIMITED (âthe Companyâ), 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 (âthe Actâ) 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 there under 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.
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 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 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, 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;
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 (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.
ANNEXURE âAâ TO THE INDEPENDENT AUDITOR''S REPORT
(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirements'' 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 Narmada Valley Fertilizers and Chemicals Limited (âthe Companyâ) as of 31st March, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. Management''s 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 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.
Auditor''s 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 judgement, 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, 2016, 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.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 2 under âReport 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 Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations 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 / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date. Immovable properties of land and buildings whose title deeds have been pledged as security for loans, guarantees, etc., are held in the name of the Company based on the confirmations received from lenders / parties. 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) According to the information and explanations given to us, the Company has not accepted any deposit 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, Employees'' State Insurance, 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, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31s'' March, 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 31st March, 2016 on account of disputes are given below:
Name of Statute |
Nature of dues |
Forum where the dispute is pending |
Period to which the amount relates |
Amount Involved (Rs. In lacs) |
Amount Unpaid (Rs. In lacs) |
Income Tax Act, 1961 |
Income Tax |
Income Tax Appellate Tribunal |
A.Y. 2003-2004 |
208.66 |
- |
A.Y. 2004-2005 |
49.46 |
- |
|||
A.Y. 2005-2006 |
59.28 |
- |
|||
A.Y. 2006-2007 |
17.33 |
- |
|||
A.Y. 2008-2009 |
18.04 |
- |
|||
A.Y. 2009-2010 |
173.60 |
- |
|||
A.Y. 2010-2011 |
306.65 |
- |
|||
Commissioner of Income tax Appeals |
A.Y. 2008-2009 |
18.03 |
- |
||
A.Y. 2012-2013 |
945.77 |
- |
|||
Central Excise Act, 1944 |
Excise Duty |
Commissioner Appeals |
2011 to 2014 |
77.42 |
74.61 |
2010 to 2011 |
9.65 |
9.30 |
|||
2010 to 2011 |
8.37 |
8.37 |
|||
CESTAT |
1997 to 2002 |
192.71 |
118.99 |
||
2002 to 2005 |
5.73 |
1.01 |
|||
2004-2005 |
0.53 |
0.18 |
|||
2000 to 2003 |
2,304.11 |
- |
|||
2003 to 2007 |
4.06 |
4.06 |
|||
High Court |
2000 to 2003 |
136.27 |
- |
||
Supreme Court |
2003-2004 |
1,188.47 |
558.98 |
||
2004-2005 |
25.21 |
10.44 |
Cutsoms Act, 1962 |
Customs Duty |
CESTAT |
2002-2003 |
212.98 |
212.98 |
2011-2012 |
93.54 |
93.54 |
|||
2012-2013 |
253.71 |
250.91 |
|||
Commissioner - Custom Appeals |
2005-2008 |
10,987.17 |
10,487.17 |
||
Finance Act, 1994 |
Service Tax |
CESTAT |
2011-2012 |
496.39 |
256.21 |
2013 |
1,106.32 |
1,054.74 |
|||
Central Sales Tax Act, 1994/ Gujarat Value Added Tax Act, 2003 |
Value Added Tax / Central Sales Tax |
Gujarat Value Added Tax Tribunal |
2006-2007 |
1,088.04 |
1,038.04 |
2007-2008 |
1,531.03 |
1,481.03 |
|||
Joint Commissioner of Commercial Tax |
2008-2009 |
1,408.41 |
1,383.41 |
||
2009-2010 |
640.32 |
11.63 |
|||
2010-2011 |
511.94 |
352.85 |
|||
2011-12 |
1,228.58 |
- |
(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, banks and government. 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 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 not paid / provided managerial remuneration during the year and hence reporting under clause (XI) of the CARO 2016 Order is not applicable.
(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 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 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 persons connected with him 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. 117365W)
(Gaurav J. Shah)
Place: Ahmedabad (Partner)
Date: 26th April, 2016 (Membership No. 35701)
Mar 31, 2015
We have audited the accompanying financial statements of GUJARAT
NARMADA VALLEY 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 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 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these 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 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 financial
statements.
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, of the state of affairs of the Company as
at 31st March, 2015, and its loss 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 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 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, 2015 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.
(f) 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 30 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)
1. 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 Company has a program of verification of fixed assets to cover
all the items in a phased manner over a period of three years which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Pursuant to the program, certain fixed assets
were physically verified by the Management during the year. According
to the information and explanations given to us no material
discrepancies were noticed on such verification.
2. In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the management and firm of Chartered Accountants at
reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
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 discrepancies were noticed on such physical verification.
3. 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.
4. 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 with regard
to purchases of inventory and fixed assets and the sale of goods and
services. During the course of our audit, we have not observed any
major weaknesses in such internal control system.
5. According to the information and explanations given to us, the
Company has not accepted any deposits during the year from public
within the meaning of provisions of section 73 to 76 or any other
relevant provisions of the Companies Act, 2013.
6. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (cost records and audit)(Cost Accounting
Records) Rules, 2015 prescribed by the Central Government under Section
148(1) 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 records with a
view to determine whether they are accurate or complete.
7. 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, Value
Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and
other material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Income-tax, Sales Tax, Wealth Tax, Value Added Tax, Service Tax,
Customs Duty, Excise Duty, Cess 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/VAT, Service Tax, Custom
Duty, Excise Duty and Cess which have not been deposited as on 31 st
March, 2015 on account of disputes are given below:
Forum Period to
Name of Nature of where the which the Amount
Statute dues dispute is amount (Rs. In
pending relates Lacs)
Income Tax Income Tax Commissioner A.Y. 18.03
Act, 1961 of Income tax 2008-2009
Appeals
CESTAT 1997 to 2002 118.99
Central CESTAT 2002 to 2005 1.01
Excise Excise CESTAT 2004-2005 0.18
Act, 1944 Duty CESTAT 2003 to 2007 3.64
CESTAT 2009 to 2013 6,476.95
Supreme Court 2003-2004 558.98
Supreme Court 2004-05 10.44
CESTAT 2002-2003 197.71
Cutsoms Customs Commissioner 2005-2008 4,065.70
Act, Duty - Custom
1962
Appeals
CESTAT 2011-2012 87.33
CESTAT 2012-2013 257.12
Finance Service CESTAT 2011-2012 256.06
Act, 1994 Tax CESTAT 2013 982.19
Gujarat Value 2006-2007 1,011.36
Added Tax
Tribunal
Gujarat Value 2007-2008 1,387.29
Added Tax
Tribunal
Gujarat
Joint 2008-2009 1,275.99
Value Commissioner
Added Tax, Value of Commercial
Added Tax / Tax
Act, 2003/
Central Central Joint 2009-2010 10.62
Sales Tax Sales Tax Commissioner
of Commercial
Act, 1994 Tax
Joint 2010-2011 342.06
Commissioner
of Commercial
Tax
(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 there under within time.
8 The accumulated losses of the Company at the end of financial year
are less than fifty percent of its net worth and the Company has not
incurred cash losses during the financial year covered by our audit and
in the immediately preceding financial year.
9. 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, financial institutions and debenture holders.
10. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
11. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
12. 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 Registration No. 117365W)
Gaurav J. Shah
(Partner)
AHMEDABAD, 28th May, 2015 (Membership No. 35701)
Mar 31, 2014
We have audited the accompanying financial statements of
GUJARAT NARMADA VALLEY 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 signifi cant accounting policies and other
explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these fi
nancial statements that give a true and fair view of the fi nancial
position, fi nancial performance and cash fl ows of the Company in
accordance with the Accounting Standards notifi ed 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 fi nancial 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 fi nancial
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 fi nancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the fi nancial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the fi nancial
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 fi nancial
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 suffi cient 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 fi nancial 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 fl ows 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 specifi ed
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 disqualifi ed 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)
(i) Having regard to the nature of the Company''s business / activities
/ results, clauses (xiii) and (xiv) of CARO are not applicable.
(ii) In respect of the Company''s fi xed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fi xed assets.
(b) The Company has a program of verifi cation of fi xed assets to
cover all the items in a phased manner over a period of three years
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. Pursuant to the program, certain
fi xed assets were physically verifi ed by the Management during the
year. According to the information and explanations given to us, no
material discrepancies were noticed on such verifi cation.
(c) The fi xed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fi xed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of the Company''s inventories:
(a) As explained to us, the inventories were physically verifi ed
during the year by the Management and a fi rm of Chartered Accountants
at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verifi cation 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
verifi cation.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, fi rms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fi xed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any major weaknesses in such internal
control system.
(vi) According to the information and explanations given to us and to
the best of our knowledge and belief, there are no contracts or
arrangements required to be entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposits during the year from public
within the meaning of provisions of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and rules made
thereunder.
(viii) In our opinion, the internal audit functions carried out during
the year by a fi rm of Chartered Accountants appointed by the
Management have been commensurate with the size of the Company and the
nature of its business.
(ix) 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 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.
(x) 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, Investor Education and
Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty,
Cess and other material statutory dues applicable to it with the
appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Value Added Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess 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 / VAT, Service Tax, Excise
Duty and Cess which have not been deposited as on 31st March, 2014 on
account of disputes are given below:
Forum Period to
Name of Nature of where the which the Amount
Statute dues dispute is amount (Rs. In Lacs)
pending relates
Income Tax Income Commissioner
Act, 1961 Tax of Income Tax A.Y. 2011-12 221.76
(Appeals)
CESTAT 2005-06 1.01
Central CESTAT 1997 to 2002 118.99
Excise & Excise CESTAT 2004-05 0.18
Customs Duty CESTAT 2003 to 2007 3.30
Act, 1944 Supreme Court 2003-04 558.98
Supreme Court 2004-05 10.44
Service CESTAT 2004 to 2007 38.22
Tax CESTAT 2007 to 2012 5,430.14
Gujarat Value
Added Tax 2007-08 1,293.55
Tribunal
Joint
Central Central Commissioner
Sales Sales of Commercial 2008 -09 1,168.57
Tax Act, Tax Tax
1956
Joint
Commissioner 2009-10 9.62
of Commercial
Tax
(xi) The Company does not have accumulated losses as at 31st March,
2014 and has not incurred cash losses during the fi nancial year ended
as on that date and in the immediately preceding fi nancial year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks. The Company has no outstanding dues to fi nancial institutions
or debenture holders.
(xiii) In our opinion and according to 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.
(xiv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks and fi nancial institutions.
(xv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xvii) The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
(xviii) The Company has not issued any debentures during the year.
(xix) The Company has not raised money by way of public issue during
the year.
(xx) To the best of our knowledge and according to the information and
explanations given to us, no material fraud on or by the Company has
been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Gaurav J. Shah
Place : Gandhinagar Partner
Date : 15-05-2014 (Membership No. 35701)
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of GUJARAT
NARMADA VALLEY 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.
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)
(i) Having regard to the nature of the Company''s business / activities
/ results, clauses (xiii) and (xiv) of CARO are not applicable.
(ii) In respect of the Company''s fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The Company has a program of verification of fixed assets to cover
all the items in a phased manner over a period of three years which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Pursuant to the program, certain fixed assets
were physically verified by the Management during the year. 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.
(iii) In respect of the Company''s inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management and a firm of Chartered Accountants 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.
(iv) 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.
(v) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any major weaknesses in such internal
control system.
(vi) According to the information and explanations given to us and to
the best of our knowledge and belief, there are no contracts or
arrangements required to be entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposits during the year from public
within the meaning of provisions of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and rules made
thereunder.
(viii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
(ix) 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 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.
(x) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income- tax, Sales Tax, Value Added Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Value Added Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess 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 Sales Tax / VAT, Service Tax, Excise Duty and
Cess which have not been deposited as on 31st March, 2013 on account of
disputes are given below:
Forum Period to
Name of Nature of where the which the Amount
Statute dues dispute is amount (Rs. In
pending relates Lacs)
CESTAT 2005-06 1.01
Central CESTAT 1997 to 2002 118.99
Excise & Excise CESTAT 2004-05 0.18
Customs Duty CESTAT 2004-05 10.44
Act, 1944 CESTAT 2003 to 2007 2.96
Supreme
Court 2003-04 558.98
Service CESTAT 2004 to 2007 38.22
Tax CESTAT 2002 to 2005 1.30
Joint 2007-08 1,106.08
Commissioner
Central Central of Commercial
Sales Sales Tax
Tax Act, Tax Joint 2008-09 1,086.14
1956 Commissioner
of Commercial
Tax
(xi) The Company does not have accumulated losses as at 31st March,
2013 and has not incurred cash losses during the financial year ended
as on that date and in the immediately preceding financial year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks. The Company has no outstanding dues to financial institutions or
debenture holders.
(xiii) In our opinion and according to 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.
(xiv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks and financial institutions.
(xv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xvii) The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
(xviii) The Company has not issued any debentures during the year.
(xix) The Company has not raised money by way of public issue during
the year.
(xx) To the best of our knowledge and according to the information and
explanations given to us, no material fraud on or by the Company has
been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 117365W)
Gaurav J. Shah
Place:Ahmedabad Partner
Date :16-05-2013 (Membership No. 35701)
Mar 31, 2012
1. We have audited the attached Balance Sheet of GUJARAT NARMADA
VALLEY FERTILIZERS COMPANY LIMITED ("the Company") as at 31st
March, 2012, the Statement of Profit and Loss and the Cash Flow
Statement of the Company for the year ended on that date, both annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003
(CARO) issued by the Central Government in terms of Section 227(4A) of
the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
(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 dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211 (3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March, 2012 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of Section 274(1 )(g) of
the Companies Act, 1956.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company's business /
activities/ results, clause (xiii) and (xiv) of CARO are not
applicable.
(ii) In respect of the Company's 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 over a period of three
years 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 physical verification.
(c) The fixed assets disposed of during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of the Company's inventories:
(a) As explained to us, the inventories were physically verified during
the year by the management and a firm of Chartered Accountants 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 such physical
verification.
(iv) 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.
(v) In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any major weaknesses in such internal
control system.
(vi) According to the information and explanations given to us and to
the best of our knowledge and belief, there are no contracts or
arrangements required to be entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposits during the year from public
within the meaning of provisions of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and rules made
thereunder.
(viii) The internal audit functions were carried out during the year by
a firm of Chartered Accountants appointed by the management. In our
opinion, the Company has an internal audit system commensurate with the
size and nature of its business.
(ix) We have broadly reviewed the books of account relating to
materials, labour and other items of cost 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 accounts and 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.
(x) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income- Tax, Sales Tax, Value Added Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Income-Tax,
Wealth Tax, Customs Duty and Excise Duty, Cess and other material
statutory dues in arrears as at 31st March, 2012 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-Tax, Sales Tax / VAT, Wealth Tax, Service
Tax, Custom Duty, Excise Duty and Cess which have not been deposited as
on 31st March, 2012 on account of disputes are given below:
Name of Nature of Forum where the Period to Amount
Statute dues dispute is which the (Rs. In
pending amount Lacs)
relates
CESTAT 2005-06 1.01
CESTAT 1999 to 12.62
2003
CESTAT 1997 to 118.99
Excise 2002
Duty
CESTAT 2004-05 0.18
Central
CESTAT 2004-05 10.44
Excise &
Customs CESTAT 2003 to 2.62
Act, 1944 2007
Supreme Court 2003-04 560.63
Supreme Court 2002-03 26.27
CESTAT 2004 to 38.22
Service 2007
CESTAT 2002 to 1.30
Tax 2005
Central Central Joint 2007-08 1,156.08
Sales Tax Sales Commissioner of
Act, 1956 Tax Commercial Tax
Income Tax Income Commissioner of 2008-09 674.51
Act, 1961 Tax Income Tax
(Appeals)
(xi) The Company does not have accumulated losses as at 31st March,
2012. The Company has not incurred cash losses during the financial
year ended on that date and in the immediately preceding financial
year.
(xii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks. The Company has no outstanding dues to financial institutions or
debenture holders.
(xiii) In our opinion and according to 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.
(xiv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks and financial institutions.
(xv) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xvi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long-term investment.
(xvii) The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
(xviii) The Company has not issued any debentures during the year.
(xix) The Company has not raised money by way of public issue during
the year.
(xx) To the best of our knowledge and according to the information and
explanations given to us, no material fraud on or by the Company has
been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No.117365W)
Gaurav J. Shah
Place : Ahmedabad Partner
Date : 30-05-2012 (Membership No. 35701)
Mar 31, 2011
1. We have audited the attached Balance Sheet of Gujarat Narmada
Valley Fertilizers Company Limited ("the Company") as at 31st March,
2011, the Profit and Loss Account and also the Cash Flow Statement for
the year ended on that date annexed thereto. These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and 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 (Auditors' Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of sub
Section (4A) of Section 227 of the Companies Act, 1956, we enclose in
the Annexure hereto a statement on the matters specified in paragraphs
4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with books of account;
(d) In our opinion, the Balance Sheet, Profit & Loss Account and 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 the written representation received from the
Directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 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 the notes
thereon and the statement on significant accounting polices 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 Profit and Loss account, of the profit for the year
ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS' REPORT (Referred to in paragraph 3 of our report
of even date)
1. 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 Company has a programme of physical verification of all its
fixed assets over a period of three years, which in our opinion, is
reasonable having regards to the size of the Company and the nature of
its assets. In accordance with this programme, certain fixed assets
have been verified by the management during the year and according to
the information and explanation given to us, assets so verified have
been substantially reconciled with the book records and no material
discrepancies were noticed on such verification.
c. In our opinion, the Company has not disposed of substantial part of
fixed assets during the year.
2. In respect of its inventories:
a. During the year, the management and the firm of Chartered
Accountants have physically verified the inventories. In our opinion,
frequency of verification is reasonable.
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 are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventories and no
material discrepancies were noticed on physical verification.
3. In respect of loans granted and taken to / from parties covered in
the register maintained u/s 301 of the Companies Act, 1956:
a. As informed, 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. Accordingly,
provisions of paragraphs 4(iii) (b), (c) and (d) of the Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable to the
Company.
b. As informed, the Company has not taken any loan, secured or
unsecured, from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, provisions of paragraph 4(iii) (f) and (g) of the
Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
4. In respect of internal control:
In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business with regard to
purchases of inventory, fixed assets and also for sale of goods &
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
5. In respect of contracts or arrangements need to be entered into a
register maintained u/s 301 of the Companies Act, 1956:
According to the information and explanation provided by the
management, we are of the opinion that there were no contracts /
arrangements that need to be entered into a register in pursuance of
Section 301 of the Companies Act, 1956.
6. In respect of deposits from public:
In our opinion and according to the information and explanations given
to us, the company has not accepted any deposits from the public during
the year within the meaning of Sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
deposits) Rules, 1975. We are informed that, no order has been passed
by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
7. In respect of internal audit system:
The internal audit during the year was carried out by the firm of
Chartered Accountants. In our opinion, the scope of internal audit
system is adequate commensurate with the size of the Company and nature
of its business.
8. In respect of maintenance of cost records:
We have broadly reviewed the books of account 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 are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
9. In respect of statutory dues:
a. According to the records of the Company, the Company is regular in
depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income Tax, Value Added Tax, Wealth Tax,
Custom Duty, Excise Duty, Service Tax, Cess and other material
statutory dues applicable to it.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees' State Insurance, Income Tax,
Value Added Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax,
Cess and other material statutory dues applicable to it were
outstanding as at March 31, 2011 for a period of more than six months
from the date they became payable.
c. According to the records of the Company, the dues outstanding of
Service Tax, Excise Duty, Income Tax and Cess on account of any
dispute, are as follows:
Nature of Nature Amount Period to Forum where
Statute of the (Rs. in which the dispute is
Dues Lacs) amount pending
relates
Central
Excise Excise 1.01 2005-2006 Pending at
& Customs Duty Commissioner (A)
Act, 1944 Excise 12.07 1999-2003 Pending at CESTAT
Duty
Excise 191.14 1997-2002 Pending at CESTAT
Duty
Excise 0.52 2004-2005 Pending at CESTAT
Duty
Excise 24.87 2004-2005 Pending at CESTAT
Duty
Excise 2.36 2003-2007 Pending at CESTAT
Duty
Excise 1,179.05 2003-2004 Pending at Supreme
Duty Court
Service 26.27 2002-2003 Pending at Supreme
Tax Court
Service 38.22 2004-2007 Pending at CESTAT
Tax
Service 1.30 2002-2005 Pending at CESTAT
Tax
UP VAT Act, Trade 45.73 2007-2008 Pending at
Additional
2008 Tax Commissioner of
Commercial Tax
10. In respect of accumulated losses and cash losses:
The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by audit and in the immediately preceding
financial year.
11. In respect of dues to financial institution / banks / debentures:
Based on our audit procedures and according to the information and
explanation given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank. The Company has no outstanding dues to debenture
holders.
12. In respect of loans and advances granted on the basis of security:
According to the information and explanation given to us and based on
the documents and records produced to us, the Company has not granted
loans & advances on the basis of the security by way of pledge of
shares, debentures and other securities.
13. In respect of provisions applicable to Chit fund:
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 (as amended) are not applicable to the
Company.
14. In respect of dealing or trading in shares, securities, debentures
and other investment:
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 (as amended) are not applicable to the Company.
15. In respect of guarantee given for loans taken by others:
According to the information and explanation given to us, the Company
has not given any guarantees for loans taken by others from banks or
financial institutions.
16. In respect of application of term loans:
According to the information and explanations given to us by the
management, term loans have been applied for the purpose for which they
were obtained.
17. In respect of funds used:
According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that funds raised on short term basis have not been used for
long-term investments.
18. In respect of preferential allotment of shares:
During the year, the Company has not made any preferential allotment of
shares to parties or companies covered in the Register maintained under
Section 301 of the Companies Act, 1956.
19. In respect of securities created for debentures:
According to the records of the company, the Company has not issued any
debentures during the year and there are no outstanding debentures
during the year.
20. In respect of end use of money raised by public issues:
The Company has not raised any money by way of public issue during the
year and therefore paragraph 4(xx) of the Companies (Auditor's Report)
Order, 2003 (as amended) is not applicable.
21. In respect of fraud:
Based upon the audit procedures performed for the purpose of reporting
the true and fair view of the financial statements and as per the
information and explanation given by the management, we report that no
fraud on or by the Company has been noticed or reported during course
of our audit.
For R.S.Patel & Co.
Chartered Accountants
Firm Registration No. 107758W
Rajan B. Shah
Place:Ahmedabad Partner
Date :27-05-2011 Membership No. 101998
Mar 31, 2010
1. We have audited the attached Balance Sheet of Gujarat Narmada
Valley Fertilizers Company Limited ("the Company") as at 31st March,
2010, the Profit and Loss Account and also the Cash Flow Statement for
the year ended on that date annexed thereto. 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 Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and 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 (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of Sub
Section (4A) of Section 227 of the Companies Act, 1956, we enclose in
the Annexure hereto a statement on the matters specified in paragraphs
4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with books of account;
(d) In our opinion, the Balance Sheet, Profit & Loss Account and 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 the written representations received from the
Directors, as on March 31, 2010, and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
March 31, 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 the notes
thereon and the statement on significant accounting policies 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 Profit and Loss Account, of the profit for the year
ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 3 of our report
of even date)
1. 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 Company has a programme of physical verification of all its
fixed assets over a period of three years, which in our opinion, is
reasonable having regards to the size of the Company and the nature of
its assets. In accordance with this programme, certain fixed assets
have been verified by the management during the year and according to
the information and explanations given to us, assets so verified have
been substantially reconciled with the book records and no material
discrepancies were noticed on such verification.
c. In our opinion, the Company has not disposed of substantial part of
fixed assets during the year.
2. In respect of its inventories:
a. During the year, the management and the firm of Chartered
Accountants have physically verified the inventories. In our opinion,
frequency of verification is reasonable.
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 are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventories and no
material discrepancies were noticed on physical verification.
3. In respect of loans granted and taken to / from parties covered in
the register maintained u/s 301 of the Companies Act, 1956:
a. As informed, 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. Accordingly,
provisions of paragraphs 4(iii) (b), (c) and (d) of the Companies
(Auditors Report) Order, 2003 (as amended) are not applicable to the
Company.
b. As informed, the Company has not taken any loan, secured or
unsecured, from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, provisions of paragraphs 4(iii) (f) and (g) of the
Companies (Auditors Report) Order, 2003 (as amended) are not
applicable to the Company.
4. In respect of internal control:
In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business with regard to
purchases of inventory, fixed assets and also for sale of goods &
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
5. In respect of contracts or arrangements need to be entered into a
register maintained u/s 301 of the Companies Act, 1956:
According to the information and explanations provided by the
management, we are of the opinion that there were no contracts/
arrangements that need to be entered into a register in pursuance of
Section 301 of the Companies Act, 1956.
6. In respect of deposits from public:
In our opinion and according to the information and explanations given
to us, the Company has not accepted any deposits from the public during
the year within the meaning of Sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of
deposits) Rules, 1975. We are informed that, no order has been passed
by the Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any Court or any other Tribunal.
7. In respect of internal audit system:
The internal audit during the year was carried out by the firm of
Chartered Accountants. In our opinion, the scope of internal audit
system is adequate commensurate with the size of the Company and nature
of its business.
8. In respect of maintenance of cost records:
We have broadly reviewed the books of account 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 are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
9. In respect of statutory dues:
a. According to the records of the Company, the Company is regular in
depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Value Added Tax, Wealth Tax,
Custom Duty, Excise Duty, Service Tax, Cess and other material
statutory dues applicable to it.
b. According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income Tax,
Value Added Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax,
Cess and other material statutory dues applicable to it were
outstanding as at March 31, 2010 for a period of more than six months
from the date they became payable.
c. According to the records of the Company, the dues outstanding of
Service Tax, Excise Duty, Income Tax and Cess on account of any
dispute, are as follows:
Nature of Nature Amount Period to Forum where
Statute of the (Rs. in which the dispute is
Dues Lacs) amount pending
relates
Central Excise Excise 22.42 1999-2003 Pending before
& Customs Duty Commissioner (A)
Act, 1944 Excise 182.47 1997-2002 Pending at CESTAT
Duty
Excise 38.71 2000-2004 Pending at CEGAT
Duty
Excise 1,096.71 2003-2004 Pending at Supreme
Duty Court
Excise 2.12 2003-2007 Pending before
Duty Commissioner (A)
Excise 22.95 2004-2005 Pending at CESTAT
Duty
Excise 0.46 2005-2006 Pending at Supreme
Duty Court
Service 26.27 2002-2003 Pending at Supreme
Tax Court
Service 1.30 2002-2005 Pending at CESTAT
Tax
Income Tax Income 300.79 2004-2005 Pending at CIT(A)
Act, 1961 Tax
10. In respect of accumulated losses and cash losses:
The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by audit and in the immediately preceding
financial year.
11. In respect of dues to financial institutions / banks / debentures:
Based on our audit procedures and according to the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank. The Company has no outstanding dues to debenture
holders.
12. In respect of loans and advances granted on the basis of security:
According to the information and explanations given to us and based on
the documents and records produced to us, the Company has not granted
loans & advances on the basis of the security by way of pledge of
shares, debentures and other securities.
13. In respect of provisions applicable to chit fund:
The Company is not a chit fund or a nidhi / mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditors Report) Order, 2003 (as amended) are not applicable to the
Company.
14. In respect of dealing or trading in shares, securities, debentures
and other investment:
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 (Auditors Report) Order,
2003 (as amended) are not applicable to the Company.
15. In respect of guarantee given for loans taken by others:
According to the information and explanations given to us, the Company
has not given any guarantees for loans taken by others from banks or
financial institutions.
16. In respect of application of term loans:
According to the information and explanations given to us by the
management, term loans have been applied for the purpose for which they
were obtained.
17. In respect of funds used:
According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that funds raised on short term basis have not been used for
long-term investments.
18. In respect of preferential allotment of shares:
During the year, the Company has not made any preferential allotment of
shares to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
19. In respect of securities created for debentures:
According to the records of the Company, the Company has not issued any
debentures during the year and there are no outstanding debentures
during the year.
20. In respect of end use of money raised by public issues:
The Company has not raised any money by way of public issue during the
year and therefore paragraph 4(xx) of the Companies (Auditors Report)
Order, 2003 (as amended) is not applicable.
21. In respect of fraud:
Based upon the audit procedures performed for the purpose of reporting
the true and fair view of the financial statements and as per the
information and explanation given by the management, we report that no
fraud on or by the Company has been noticed or reported during course
of our audit.
For R.S.Patel & Co.
Chartered Accountants
Firm Registration No. 107758W
Rajan B. Shah
Partner
Membership No. 101998
Place:Ahmedabad
Date : 26.05.2010