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Gujarat State Fertilizers & Chemicals Ltd.

BSE: 500690 Sector: Agri and agri inputs
NSE: GSFC ISIN Code: INE026A01025
BSE LIVE 15:48 | 23 Oct 142.60 4.90
(3.56%)
OPEN

138.85

HIGH

143.40

LOW

136.00

NSE 15:56 | 23 Oct 142.55 4.85
(3.52%)
OPEN

138.60

HIGH

143.20

LOW

136.00

OPEN 138.85
PREVIOUS CLOSE 137.70
VOLUME 781541
52-Week high 150.75
52-Week low 78.50
P/E 13.74
Mkt Cap.(Rs cr) 5,683
Buy Price 142.60
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00
OPEN 138.85
CLOSE 137.70
VOLUME 781541
52-Week high 150.75
52-Week low 78.50
P/E 13.74
Mkt Cap.(Rs cr) 5,683
Buy Price 142.60
Buy Qty 100.00
Sell Price 0.00
Sell Qty 0.00

Gujarat State Fertilizers & Chemicals Ltd. (GSFC) - Auditors Report

Company auditors report

TO THE MEMBERS OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of GUJARATSTATE FERTILIZERS & CHEMICALS LIMITED ("the Company") which comprisethe Balance Sheet as at 31st March 2017 and the Statement of Profit and Loss(including Other Comprehensive Income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of the significant accountingpolicies and other explanatory information.

Management's Responsibility for the Standalone Ind AS 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 the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.

This responsibility also includes maintenance 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 irregularities; selection and application ofappropriate 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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement 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.

In conducting 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 thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financ ial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 and its profit total comprehensive income itscash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following matter in the Notes to the standalone Ind ASfinancial statements:

Note 45 which describes the Company's past subsidy claims matter and the eligibility ofclaims for the period from 18th

March 2013 to 5th March 2017 amounting to Rs. 66287 lakhs pendingexamination by Fertilizer Industry Coordination Committee. The Company is reasonablycertain that its subsidy claims for the aforesaid period which are in line with theclaims recently agreed for period from 01st April 2010 to 17th March2013 will be agreed by the Department of Fertilizers.

Our opinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report to theextent applicable that:

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

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164(2) of the 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements. Refer Note 39 to the financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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 the standalone Ind AS financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry ofFinance during the period from 8th November 2016 to 30th December2016. Based on audit procedures performed and the representations provided to us by themanagement we report that the disclosures are in accordance with the books of accountmaintained by the Company and as produced to us by the Management.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Deloitte Haskins & Sells

Chartered Accountants (Firm's Registration No. 117364W)

(Gaurav J Shah)

(Partner) (Membership No. 35701)

Place : Gandhinagar Date : 29th May 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GujaratState Fertilizers and Chemicals Limited ("the Company") as of 31stMarch 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 respective 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 operat ing effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks 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 toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial 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

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

periods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 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 Deloitte Haskins & Sells

Chartered Accountants (Firm's Registration No. 117364W)

(Gaurav J Shah)

(Partner) (Membership No. 35701)

Place : Gandhinagar Date : 29th May 2017

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us the management is in process of reconcilingfixed assets physically verified during the year with the fixed assets as per registermaintained and does not expect any material discrepancy.

(c) According to the information and explanations given to us and the recordsexamined by us and based on the examination of the registered sale deed / transfer deed /Letter of Award provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date.

In respect of immovable properties of land and buildings that have been taken on leaseand disclosed as Property Plant and Equipment (fixed asset) in the financial statementsthe lease agreements are in the name of the Company where the Company is the lessee inthe agreement except as stated in table below.

Particulars of the land Amount lacs Remarks
(Carrying amount as at the balance sheet date)
Leasehold land at Nandesari admeasuring to 82383 square meters 29.39 The title deeds are in the name of Polymer Corporation of Gujarat Limited erstwhile company that was merged with the Company under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High Court(s) of judicature.

(ii) As explained to us the inventories except goods-in-transit were physicallyverified during the year by the Management at reasonable intervals and no materialdiscrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us the Company hasnot granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013.

(iv) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

(vi) The maintenance of cost records has been specified by the Central Governmentunder section 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Income-tax Sales Tax Service Tax Customs Duty ExciseDuty Value Added Tax cess and other material statutory dues applicable to it to theappropriate authorities.

(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 31st March 2017 for a period of morethan six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Excise Dutyand Value Added Tax which have not been deposited as on 31st March 2017 onaccount of disputes are given below:

Name of statute Nature of dues Forum where dispute is pending Period / between various periods to which the amount relates Amount involved (excluding interest and penalty in lacs) Amount unpaid (excluding interest and penalty in lacs)
Income Tax Act 1961 Income Tax Income Tax Appellate Tribunal FY 1991-92; 2796.96 122.52
FY 2006-07; &
FY 2009-10
Income Tax Assessing Officer FY 1998-99 107.17 Nil
Income Tax Commissioner (Appeals) FY 2003-04 & 1531.24 455.38
FY 2011-12
Central Excise Excise Duty High Court - Ahmedabad FY 1997-98 & 3486.77 1768.47
Act 1944 FY 2008-09
CESTAT Mar 2007 to Mar 2012 397.27 381.27
Asst. Commissioner / Dy. FY 1991-92; FY 1993-94; FY 146.98 146.98
Commissioner 1994-95 & Feb 2000 to Feb 2001
Superintend-ent Oct 2015 to Sep 2016 9.76 9.76
Finance Act Service Tax Supreme Court Jul 2010 to Mar 2013 11.51 10.36
1994 CESTAT Jun 2005 to Dec 2014 338.22 254.83
Commissioner (Appeals) Apr 2013 to Mar 2016 20.45 18.92
Commissioner (Service Tax) Apr 1998 to Dec 2014 54.03 50.38
Asst. Commissioner / Deputy Apr 2005 to Feb 2016 29.74 29.74
Commissioner
Superintend-ent Oct 2015 to Aug 2016 2.37 2.37

 

Customs Act Custom Duty Assistant Commissioner of FY 2013-14 3.19 3.19
1962 Customs
Gujarat Value Gujarat Value Joint / Dy. Commissioner of FY 2006-07 to FY 2011-12 2216.14 2216.14
added tax Act Added Tax Commercial Tax
2003
Central Sales Central Sales Additional Commissioner of FY 1998-99 0.14 0.14
Tax Act 1956 Tax Sales Tax Delhi
Central Sales Gujarat Commercial Tax FY 2006-07 to FY 2010-11 2754.92 2754.92
Tax Tribunal
Central Sales Asst./ Addl. Commissioner of FY 1998-99 2.21 2.21
Tax Sales Tax Kolkata

(viii) In our opinion and according to the information and explanations given tous the Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company has not taken any loans or borrowings from Governmentand has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to usthe money raised by way of term loan have been applied by the Company during the year forthe purposes for which it was raised. During the year the Company has not raised moneysby way of public offer.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to usthe Company has paid or provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) According to the information and explanations given to us the Company is nota Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards.

(xiv)During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi)According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 117364W)
(Gaurav J Shah)
(Partner)
(Membership No. 35701)

Place : Gandhinagar Date : 29th May 2017