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National Fertilizer Ltd.

BSE: 523630 Sector: Agri and agri inputs
NSE: NFL ISIN Code: INE870D01012
BSE LIVE 15:59 | 23 Oct 60.80 -0.75
(-1.22%)
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61.10

HIGH

62.10

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60.55

NSE 15:52 | 23 Oct 60.90 -0.50
(-0.81%)
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OPEN 61.10
PREVIOUS CLOSE 61.55
VOLUME 75149
52-Week high 89.50
52-Week low 29.65
P/E 12.72
Mkt Cap.(Rs cr) 2,983
Buy Price 0.00
Buy Qty 0.00
Sell Price 60.80
Sell Qty 6553.00
OPEN 61.10
CLOSE 61.55
VOLUME 75149
52-Week high 89.50
52-Week low 29.65
P/E 12.72
Mkt Cap.(Rs cr) 2,983
Buy Price 0.00
Buy Qty 0.00
Sell Price 60.80
Sell Qty 6553.00

National Fertilizer Ltd. (NFL) - Auditors Report

Company auditors report

To the Members of

National Fertilizers Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of NationalFertilizers Limited ('the Company') which comprise the balance sheet as at 31stMarch 2016 the statement of profit and loss and the cash flow statement for the year thenended and a summary of 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand 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 statementsbased on our audit.

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

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 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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the 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 31st March 2016 and its profit and its cash flows for the year ended onthat date.

Emphasis of matter

Without qualifying we draw attention to:

(a) Note No. 3 to Standalone financial statement regarding provision of proposeddividend of 30% of PAT has been made as against 30% PAT or 30% on GOI equity (whichever ishigher) as directed by Ministry of Finance vide notification against which Company hasapplied for exemption which is pending from Department of Economic Affairs (Government ofIndia).

(b) Note No. 48(a) to standalone financial statement regarding non availability ofbalance confirmation in respect of Subsidy ' 4629.17 crore and Capital Grant ' 2030.58crore which is due for recovery from Government of India.

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 A' a statement on the matters specified in theparagraph 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 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 and the cash flow statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the 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 the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(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 financial statements - Refer Note 36 to the financial statements;

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

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

3. As required by Section 143(5) of the Act we have considered the direction andsub-directions issued by the Comptroller & Auditor General of India. We give ourreport in the attached "Annexure C".

For CHANDIOK AND GULIANI For HDSG & Associates
Chartered Accountants Chartered Accountants
Firm's Registration No.: 001199N Firm's Registration No.: 002871N
B. B.Kalia Harbir Gulati
Partner Partner
Membership no.: 085772 Membership no.: 084072
New Delhi
23rd May 2016

The Annexure refer to in our Independent Auditors Report to the members of the companyon the standalone financial statement for the year ended 31st March 2016 wereport that:

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

(b) As explained to us the Company has a regular programme of physicalverification of its fixed assets by which all fixed assets are verified in a phasedmanner which in our opinion is reasonable having regard to the size of the Company andnature of its assets. Accordingly the physical verification of fixed assets has beencarried out by the management during the year. We are informed that discrepancies noticedon such verification were not material and have been properly dealt with in the books ofaccount.

(c) According to the information and explanations given to us and on the basis ofour examination of the Company the title deeds of immovable properties are held in thename of the Company except following:

Immovable Properties Area
Nangal Unit 2578 Acres
Bhatinda Unit 14.261 Acres
Vijaipur Unit 1250.254 Acres
Alwar 0.164 Acres
Bhopal 9707.25 Square Feet

(ii) The physical verification of the inventory has been carried out by the managementin accordance with the perpetual inventory programme at regular intervals during theyear. The discrepancies noticed have been properly dealt within the books of account;

(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under Section 189 of the CompaniesAct. Accordingly paragraph 3(iii)(a) (b) (c) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

(v) According to the information and explanation given to us the Company has notaccepted any deposits within the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act and the rules framed there under.

(vi) We have broadly reviewed the Cost Records maintained by the Company specified byCentral Government under Sub Section (1) of section 148 of the Companies Act 2013 and areof the opinion that prima facie the prescribed records have been maintained. We havehowever not made a detailed examination of the Cost Records with a view to determinewhether they are accurate or complete.

(vii) (a) According to information and explanations given to us and on the basis of ourexamination of the records of the Company the

Company is generally regular in depositing with the appropriate authoritiesundisputed statutory dues including Provident Fund Employees' State Insurance Incometax Sales tax Wealth tax Service tax Customs duty Excise duty Cess and otherstatutory dues.

According to the information and explanations given to us no undisputed amounts remainpayable in respect of such statutory liabilities as at 31st March 2016 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us the particulars of thedisputed dues as at 31.03.2016 which have not been deposited on account of matters pendingin appeal before appropriate authorities are as under:

Name of the Statute Nature of dues Amount (in ') Involved (' Crore) Period to which amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 70.16 AY 2006-07 to AY 2010-11 Income Tax Appellate Tribunal New Delhi
70.65 AY 2006-07 AY 2011-12 AY 2012-13 & AY 2013-14 Commissioner of Income Tax (Appeals)
11.34 AY 2009-10 Delhi High Court
Central Excise Act 1944 Excise Duty 1.04 FY 1997-98 to FY 1999-2000 Punjab and Haryana High Court
Customs Act 1962 Custom Duty 6.48 F.Y. 1996-97 Commissioner of Customs (Appeal)
Punjab VAT Act VAT 0.55 FY 2006-07 to FY 2009-10 Dy. Excise and Taxation Commissioner (Appeal) Patiala
Madhya Pradesh Value Added Tax Act 2002 VAT 0.01 FY 2008-09 Appellate Board Commercial Tax Bhopal
M P Vidyut Shulk Adhiniyam 2012 Electricity Generation Duty &Cess 0.39 FY 2008-09 to FY 2011-12 MP High Court
Punjab Municipal Act Property Tax 0.82 FY 2007-08 to FY 2009-10 and FY 2013-14 Municipal Council Nangal
0.09 FY 1982-83 to FY 1990-91 Municipal Council Nangal
MP Commercial Tax Act1994 Purchase Tax 1.30 FY 2001-02 Commercial Tax Appellate Board Bhopal
Haryana Local Development tax Act 2000 Entry tax 6.72 FY 2000-01 to FY 2002-03 Joint Excise Taxation Comm. Rohtak
Entry Tax Act 1976 Entry Tax 0.05 FY 2010-11 and FY 2012-13 Appellate Board Commercial Tax

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to any bank or bonds/debenture holdersas at the Balance Sheet date.

(ix) As per the information and explanations given to us on an overall basis the termloans taken by the company have been applied for the purposes for which they wereobtained.

(x) According to the information and explanations given by the management no fraud onor by the Company has been noticed or reported during the year.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For CHANDIOK AND GULIANI For HDSG & Associates
Chartered Accountants Chartered Accountants
Firm's Registration No.: 001199N Firm's Registration No.: 002871N
B. B.Kalia Harbir Gulati
Partner Partner
Membership no.: 085772 Membership no.: 084072
New Delhi
23rd May 2016

ANNEXURE"B"

The Annexure refer to in our Independent Auditors Report to the members of the companyon the standalone financial statement for the year ended 31st March 2016.

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 NationalFertilizers Limited ("the Company") as of 31st March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 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.

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 the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 judgment 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 2016based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For CHANDIOK AND GULIANI For HDSG & Associates
Chartered Accountants Chartered Accountants
Firm's Registration No.: 001199N Firm's Registration No.: 002871N
B. B.Kalia Harbir Gulati
Partner Partner
Membership no.: 085772 Membership no.: 084072
New Delhi
23rd May 2016