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Asian Fertilizers Ltd.

BSE: 524695 Sector: Agri and agri inputs
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Asian Fertilizers Ltd. (ASIANFERTILIZER) - Auditors Report

Company auditors report

To The Members of Asian Fertilizers Limited

Report on the Financial Statements

We have audited the accompanying Financial Statements of Asian Fertilizers Limited ("TheCompany") which comprise the Balance Sheet as at 31st March 2016 thestatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explenetory information.

Mangements Responsibility for the Financial Statments

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Compaines Act 2013 ("The Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the company in accordance with the accountingprinciples generally accepted in Indian including athe Accounting Standards specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintainance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregualarities; selection and applicationof appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free material misstatement whether dueto fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statments based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandrds and matters which are required to be included in the audit report under theprovisions of the Act and Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143 (10) of the Act. Those Standards require that we comply with ethicalrequirments and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from mateial misstatement.

An audit involves performing procedure to obtain audit evidence about the amount anddisclosures in the financial statments. The procedure selected depend on theauditor’s judgement including the assesment of the risk of material misstatement ofthe financial statements whether due to fraud or error. In making those risks assesmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procidures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Company’s Directors as well as evaluating the over allpresentation of financial statement.

We believe that the audit evidence we have obtained is sufficiant and appropriate toprovide a basis for our audit opinion on the financial statements.

Basis of Qualified Opinion

No provision for Exice Duty on closing stock of finished goods has been made in theaccounts as well as same has not been included in value of Inventories. The aboveaccounting treatment is not in confirmity with the Accounting Standard 2 (InventoryValuation) issued by the Institute of Chartered Accountants of India. It has no effect onprofit for the year however it has resulted in under statement of inventories and shortterm provision by Rs. 774955.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects for the matter described in the Basis for QualifiedOpinion paragraph the aforesaid financial statements give the information required by theAct in the manner so required and give a true and fair view confirmity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 31 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 the Companies (Auditor’s Report) Order 2016 ("theorder") issued by the central Government of India in terms of sub section (11) ofSection 143 of the Act and on the basis of such checks of the books and records of thecompany as we considered appropriate and according to information and explanations givento us we give in the "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explainations which to the bestof 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 thecompany so far as it appears from our examination of those books.

c) The Balance Sheet the statement of Profit & Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in Basis for Qualified Opinionparagraph the aforesaid financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

e) On the basis of written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of a internal financial control over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B".

g) With respect to other matters to be included in the Auditor’s report inaccordance with Rule 11 of the companies (Audit & Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer Note no. 34.1 to the financial statements;

ii) In our opinion and as per the information and explanations provided to us thecompany has not entered into any long term contracts including derivative contractsrequiring provision under applicable laws or accounting standards for materialforeseeable losses; and

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

For KAPOOR TANDON & CO.
Chartered Accountants
Firm Reg. No. - 000952 C
(Rajesh Parasramka)
Place : New Delhi Partner
Date : 30.05.2016 M.No. 074192

ANNEXURE A TO THE AUDITORS REPORT

(Referred to in paragraph 1 of our report of even date on the financial statements forthe financial year ended 31st March 2016 of Asian Fertilizers Limited)

In terms of the information and explanations given to us and also on the basis of suchchecks as we considered appropriate we state that :

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All the fixed assets have not been physically verified by the management during theyear but there is regular program of physical verification which in our opinion isreasonable having regard to the size of the company and nature of fixed assets. Nomaterial discrepancies have been noticed in respect of assets physically verified duringthe year.

(c) Title deeds of immoveable properties are held in the name of company.

(ii) The inventories of the Company has been physically verified by the management atregular interval during the year.

In our opinion the frequency of such verification is reasonable. As explained to usthe descrepancies noticed on verification were not material in relation to the operationsof the company.

(iii) The Company has not granted any loan secured or unsecured to companies firmslimited liability partneships or other parties listed in the register maintained underSection 189 of the Companies Act 2013 (The Act). Hence paragraph (iii) of the order isnot applicable.

(iv) The Company has not granted/made any loan investment guarantee or securitywhere provisions of section 185 & 186 of the applicable. Hence paragraphs 3(iv) ofthe order is not applicable.

(v) In our opinion the Company has not accepted any deposit during the year within themeaning of Section 73 to Section 76 of the Companies Act 2013 (The Act) read with theRules framed there under. Hence paragraphs 3(v) of the order is not applicable.

(vi) We have broadly reviewed the books of account and records maintained by theCompany pursuant to the Rules framed by the Central Government for the maintenance of costrecords under subsection (1) of Scection 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed records have been made and maintained. We havenot however made a detailed examination of he said accounts and records with a view todetermine whether they are accurate or complete.

(vii) (a) According to the books and records produced and examined by us the Companyis generally regular in deposting undisputed Statutory dues including Provident FundEmployees State Insurance Income Tax Sales Tax Service Tax Duty of Customs Duty ofExcise Value Added Tax Cess and other material statutory dues as applicable with theappropriate authorities and no undisputed amount payable in respect of aforesaid statutorydues were outstanding as at 31st March 2016 for a period of more than six months from thedate they become payable.

b) According to the information and explainations given to us there are no dues ofIncome Tax Sales Tax Service Tax Duty of Coustoms Duty of Excise & Value Added Taxwhich have not been deposited on account of any dispute except mentioned as below.

Name of the Statute Nature of the dues Amount (Rs. in Lacs) Year(s) to Which relates Forum where pending
The Central Excise Act 1944 Penalty 5.00 2003-04 CESTAT New Delhi

(viii) The Company has not defaulted in re-payment of loans or borrowings to afinancial Institution Banks Government or dues to debenture holders during the yearexcepting for certain delays in repayment of installment and interest during the year tobanks. However there is no default as on Balance Sheet date.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer or further public offer (including dept instruments) during the year. In ouropinion the term loans have been applied for the purposes for which they were raised.

(x) Based on the audit procedures performed and according to the information andexplanations given to us no material fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

(xi) In our opinon the managerial remmunaration paid or provied by the company is inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith schedule IV to the Act. (xii) The company is not a "Nidhi Company"; henceparagraph 3(xii) the order is not applicable. (xiii) In our opinion transactions with therelated parties are in compliance with section 177 and 188 of Act where applicable and thedetails of such transactions have been disclosed in the Financial Statements as requiredby the applicable accounting standards.

(xiv) The company has not made preferential allotment or private placement of shares orfully or partly convertible debentures during the year under review. Hence paragraph3(xiv) the Order is not applicable. (xv) In our opinion the company has not entered intoany non-cash transactions with directors or persons connected with him. Hence paragarph3(xv) of the order is not applicable.

(xvi) In our opinion the company is not required to be registered under Section 45 IAof the Reserve Bank of India Act 1934.

For KAPOOR TANDON & CO.
Chartered Accountants
Firm Reg. No. - 000952 C
(Rajesh Parasramka)
Camp : New Delhi Partner
Date : 30.05.2016 M.No. 074192

Statement on Impact of Audit Qualifications (for audit with modified opinion) submittedalong-with Annual Audited Financial Results - (Standalone) Statement on Impact of AuditQualifications for the Financial Year ended March 31 2016 [Regulation 33 of the SEBI(LODR) (Amendment) Regulations 2016]

I. Sl. No. Particulars Audited Figures (as reported before adjusting for qualifications) Adjusted Figures (audited figures after) adjusting for qualifications
1. Turnover / Total Income 548575615 No Change
2. Total Expenditure 543528600 No Change
3. Net Profit (Loss) 3270084 No Change
4. Earnings Per Share 0.41 No Change
5. Total Assets 214251867 215026822
6. Total Liabilities 214251867 215026822
7. Net Worth 97211681 No Change
8. Any other financial item(s) (as felt appropriate by the management) Not applicable No Change

II. Audit Qualification (each audit qualification separately):

a. Details of Audit Qualification- No Provision for excise duty on closing stock offinished goods has been made in the account as well as same has not included in value ofinventory.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of qualification: repetitive

d. For Audit Qualification(s) where the impact is quantified by the auditor yes Rs.774955 Management’s Views: No Impact on profit & loss

e. For Audit Qualification(s) where the impact is not quanified by the auditor: Notapplicable

(i) Management’s estimation on the impact of audit qualification: Not applicable

(ii) If management is unable to estimate the impact reasons fo the same:Not-applicable

(iii) Auditor’s Comments on (i) or (ii) above: Not-applicable

III. Signatories:

- CEO/Managing Director : Sd/- A. K. Matanhelia
- CFO : Sd/- S. S. Pandey
- Audit Committee Chairman : Sd/- K. C. Madan
- Statuatory Auditors : Sd/- Rajesh Parasramka
Place : New Delhi
Date : 30-05-2016

Annexure B to the Auditors’ Report

(Referred to in paragraph 2(f) of our report of even date on the financial statementsfor the financial year ended 31st March 2016 of Asian Fertilizers Limited)

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AsianFertilizers Limited ("the Company") as of 31st March 2016 in conjunctionwith our audit of the 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company’s policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For KAPOOR TANDON & CO.
Chartered Accountants
Firm Reg. No. 000952C
Place: New Delhi (Rajesh Parasramka)
Date: 30.05.2016 Partner
M. No. 074192