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Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

BSE: 500670 Sector: Agri and agri inputs
NSE: GNFC ISIN Code: INE113A01013
BSE LIVE 15:46 | 13 Dec 445.30 -10.70
(-2.35%)
OPEN

468.85

HIGH

468.85

LOW

442.10

NSE 15:56 | 13 Dec 445.75 -10.10
(-2.22%)
OPEN

456.00

HIGH

461.00

LOW

442.10

OPEN 468.85
PREVIOUS CLOSE 456.00
VOLUME 173180
52-Week high 548.50
52-Week low 198.30
P/E 21.93
Mkt Cap.(Rs cr) 6,921
Buy Price 0.00
Buy Qty 0.00
Sell Price 444.00
Sell Qty 86.00
OPEN 468.85
CLOSE 456.00
VOLUME 173180
52-Week high 548.50
52-Week low 198.30
P/E 21.93
Mkt Cap.(Rs cr) 6,921
Buy Price 0.00
Buy Qty 0.00
Sell Price 444.00
Sell Qty 86.00

Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (GNFC) - Auditors Report

Company auditors report

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 GujaratNarmada Valley Fertilizers & Chemicals Limited ("the Company") whichcomprise the Balance Sheet as at March 31 2017 the Statement of Profit and Lossincluding the statement of Other Comprehensive Income the Cash Flow Statement and theStatement of Changes in Equity for the year then ended and a summary of significantaccounting 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 Section134(5) of the Companies Act 2013 ("the Act")with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS)specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and theCompanies (Indian Accounting Standards)

Rules 2015 as amended. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design implementation and maintenanceof adequate internal financial control that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Ind AS financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the standaloneInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2017 its profit including other comprehensive income its cash flows andthe 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 ("the Order")issued by the Central Government of India in terms of subsection (11) of Section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 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 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 Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Indian Accounting Standards) Rules2015 as amended;

(e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) ofthe Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements – Refer Note 36 to thestandalone Ind AS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts – Refer Note 20 to the standalone Ind AS financial statements;

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

iv. The Company has provided requisite disclosures in Note 41 to these standalone IndAS financial statements as to the holding of Specified Bank Notes on November 8 2016 andDecember 30 2016 as well as dealings in Specified Bank Notes during the period fromNovember 8 2016 to December 30 2016. Based on our audit procedures and relying on themanagement representation regarding the holding and nature of cash transactions includingSpecified Bank Notes we report that these disclosures are in accordance with the books ofaccounts 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 2016and the transition date opening balance sheet as at April 1 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by the predecessor auditor whose report for the year ended March 312016 and March 31 2015 dated April 26 2016 and May 28 2015 respectively expressed anunmodified opinion on those standalone financial statements as adjusted for thedifferences in the accounting principles adopted by the Company on transition to the IndAS which have been audited by us.

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

Annexure 1 referred to in paragraph on Report on Other Legal and RegulatoryRequirements 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 includingquantitative details and situation of fixed assets.

(b) The Company has a program of verification of property plant and equipment to coverall the items in a phased manner over a period of 3 years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the program certain fixed assets were physically verified by the Management during theyear. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company. In respect of immovable properties of land that have been taken onlease and disclosed as property plant and equipment in the financial statements thelease agreements are yet to be entered in the name of the Company although the Company isthe lessee as per the arrangement.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 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 theCompany has not advanced loans to directors / to a company in which the Director isinterested to which provisions of section 185 of the Companies Act 2013 apply and hencenot commented upon. In our opinion and according to the information and explanations givento us provisions of section 186 of the Companies Act 2013 in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of 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 pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the manufacture of fertilizer andindustrial products and are of the opinion that prima facie the specified accounts andrecords 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 undisputedstatutory dues including Provident Fund Income Tax Sales Tax Service Tax Customs DutyExcise Duty Value Added Tax cess and other material statutory dues applicable to it. Theprovision of employees' state insurance is not applicable to the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund Income TaxSales Tax Service Tax Customs Duty Excise Duty Value Added Tax cess and othermaterial statutory dues in arrears as at March 31 2017 for a period of more than sixmonths from the date they became payable.

(c) Details of dues of Sales Tax Service Tax Customs Duty Excise Duty and ValueAdded 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 Excise Duty CESTAT 1997-2002 1.93 1.19
Act 1944 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 CESTAT 2002-2003 2.28 2.28
Duty 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 usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government.

The Company has not issued any debentures.

(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer / debtinstruments) and term loans hence reporting under clause (ix) of the Order is notapplicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud / materialfraud on the Company by the officers and employees of the Company has been noticed orreported during the year.

(xi) According to the information and explanations given by the management the Companyhas not paid / provided managerial remuneration during the year and hence reporting underclause (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 ofclause 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 managementtransactions with the related parties are in compliance with Section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company and not commented upon. (xv) According to the information andexplanations given by the management the Company has not entered into any non-cashtransactions with directors or persons connected with him as referred to in Section 192 ofCompanies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

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

Annexure 2 to the Independent Auditor's Report of Even Date on the Standalone Ind ASFinancial Statements of Gujarat Narmada Valley Fertilizers & Chemicals Limited

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

We have audited the internal financial controls over financial reporting of GujaratNarmada Valley Fertilizers & Chemicals Limited ("the Company") as of March31 2017 in conjunction with our audit of the standalone Ind AS financial statements ofthe 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's 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 as specified under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial 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 andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively 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 internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 March 31 2017 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 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