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Gujarat State Fertilizers & Chemicals Ltd.

BSE: 500690 Sector: Agri and agri inputs
NSE: GSFC ISIN Code: INE026A01025
BSE 00:00 | 18 Mar 101.65 -1.35
(-1.31%)
OPEN

102.90

HIGH

104.45

LOW

101.40

NSE 00:00 | 18 Mar 101.80 -1.25
(-1.21%)
OPEN

103.00

HIGH

104.45

LOW

101.30

OPEN 102.90
PREVIOUS CLOSE 103.00
VOLUME 92844
52-Week high 137.50
52-Week low 85.60
P/E 7.36
Mkt Cap.(Rs cr) 4,051
Buy Price 101.90
Buy Qty 250.00
Sell Price 103.70
Sell Qty 50.00
OPEN 102.90
CLOSE 103.00
VOLUME 92844
52-Week high 137.50
52-Week low 85.60
P/E 7.36
Mkt Cap.(Rs cr) 4,051
Buy Price 101.90
Buy Qty 250.00
Sell Price 103.70
Sell Qty 50.00

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

Company auditors report

TO THE MEMBERS OF GUJARAT STATE FERTILIZERS & CHEMICALS LIMITEDReport on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statementsof GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED (“the Company”) whichcomprise the Balance Sheet as at March 31 2018 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 (herein after referred to as “StandaloneInd AS Financial Statements”).

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (“the Act”) with respect tothe preparation of these standalone Ind AS financial statements that give a true and fairview of the state of affairs (financial position) profit or loss (financial performanceincluding other comprehensive income) cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read withrelevant rules issued there under.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind ASfinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made thereunder. Weconducted our audit of the Standalone Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind ASfinancial 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 Board of Directors as well as evaluating the overallpresentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs (financial position) of the Company as at March 31 2018 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following matter in the notes to thestandalone Ind AS financial statements:

Note 12 which describes the company's past subsidy claims matterand the eligibility of claims for the period from March 18 2013 to March 5 2017amounting to 662.95 Crores pending examination by Fertilizer Industry CoordinationCommittee. The company is reasonably certain that its subsidy claims for the aforesaidperiod which are in line with the claims recently agreed for period from April 01 2010to March 17 2013 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 we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit; (b) In our opinion proper books of account as required by law have been kept bythe company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (includingother comprehensive income) the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Indian Accounting Standards prescribed under Section 133 of theAct read with relevant rules issued thereunder. (e) On the basis of the writtenrepresentations received from the directors as on March 31 2018 taken on record by theBoard of Directors none of the directors is disqualified as on March 31 2018 from beingappointed as a director in terms of Section 164 (2) of the Act; (f) With respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls refer to our separate Report in“Annexure A”. (g) With respect to the other matters to be included in theAuditor'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 accordingto the explanations given to us: I. The Company has disclosed the impact of pendinglitigations on its financial position in its standalone Ind AS financial statements. ReferNote no 39 to the standalone Ind AS financial statement.

II. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts; III. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by thecompany.

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

For T R Chadha & Co LLP

Firm's Reg. No-: 006711N/N500028 Chartered Accountants

Brijesh Thakkar

Partner Membership No 135556

Place: Gandhinagar Date: 16/05/2018

ANNEXURE “A” TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in Paragraph 1(f) under “Report on Other Legal andRegulatory Requirements” section of our Report of even date) Report on the InternalFinancial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financialreporting of Gujarat State Fertilizers & Chemicals Limited (“the Company”)as of March 31 2018 in conjunction with our audit of the Standalone Ind AS financialstatements 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the “Guidance Note”) issued by the Institute of CharteredAccountants of India. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's audit opinionon the company's internal financial control system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Opinion

In our opinion to the best of our information and according to theexplanations give to us 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 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.

For T R Chadha & Co LLP

Firm's Reg. No-: 006711N/N500028 Chartered Accountants

Brijesh Thakkar

Partner Membership No 135556

Place: Gandhinagar Date: 16/05/2018

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in Paragraph 2 under “Report on Other Legal andRegulatory Requirements” section of our Report of even date)

(i) In respect of its Fixed Assets a) The Company has maintained properrecords showing full particulars including quantitative details and situtation of fixedassets. b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable having regardto the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification. c) According to the information and explanationsgiven to us and the records examined by us and based on the examination of registed salesdeed / trasnfer deed / letter of award provided to us we report that the title deedscomprising all the immovable properties of land and buildings which are freehold are heldin the name of the Company as at the balance sheet date In respect of immovable propertiesof land and buildings that have been taken on lease and disclosed as Property Plant andEquipment (fixed asset) in the financial statements the lease agreements are in the nameof the company where the company is the lessee in the agreement except as stated intable below.

Particulars of the land Amount lacs (Carrying amount as at the balance sheet date) Remarks
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) Inventories

As explained to us the inventories except goods-in-transit werephysically verified during the year by the Management at reasonable intervals and nomaterial discrepancies were noticed on physical verification.

(iii) Loans given

According to the information & explanations given to us theCompany has not granted any loans Secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013 and hence reporting under clause (iii) (a) (b) and (c) ofParagraph 3 of the order is not applicable.

(iv) Compliance of Sec. 185 & 186

In our openion and according to the information and explanations givento us the compnay has complied with the provisions of sections 185 & 186 of thecompanies Act 2013 in respect of grant of loans making investments and providingguarantees and securities.

(v) Public Deposit

According to the information and explanations given to us the companyhas not accepted any deposits during the year. In respect of unclaimed deposits thecompany has complied with the proviosn of section 73 to 76 or any other relevent provisonsof the Companies Act 2013.

(vi) Cost Records

We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 prescribed by the CentralGovernment under section 148(1)(d) of the Companies Act 2013 and are of the opinionthat prima facie the prescribed accounts and cost records have been made and maintained.We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) Statutory Dues

According to the information and explanations given to us in respectof statutory dues: a) The Company has generally been regular in depositing its undisputedstatutory dues including Provident Fund Income-tax Sales Tax Service tax Customs dutyExcise duty Value Added Tax GST cess and other material statutory dues applicable to itto the appropriate authorities. b) No undisputed amounts payable in respect of theaforesaid dues were outstanding as at March 31 2018 for a period of more than six monthsfrom the date they became payable. c) Details of dues of Income-tax Sales Tax ServiceTax Customs Duty Excise Duty and Value Added Tax which have not been deposited as onMarch 31 2018 on account 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 (Rs in Lakhs)

Amount unpaid excluding interest and penalty (Rs in Lakhs)

Income Tax Act 1961 Income Tax Assessing Officer

FY 2016-17

1.68

1.68

Commissioner (Appeals)

FY 2012-13

1133.90

904.90

Central Excise Act Excise Duty High Court- Ahmedabad

FY 1986 to 1989

3486.77

1768.47

1994

FY 1997-2001

CESTAT

FY 2007 to 2009

7259.96

7243.96

FY 2011 to 2015

Superintendent / Assistance / Deputy /

FY1991-1992

146.98

146.98

Joint commissioner of Central Excise

FY 1991-1993

FY 1993-1995

FY 2000-2001

FY 2010-2014

Finance Act 1994 Service Tax Supreme court

Jul-2010 to Mar- 2013

11.51

10.36

CESTAT

FY 2012-2014

159.75

147.5

CESTAT

Sept-2005 to Jun- 2012

134.95

67.95

Commissioner (Appeals)

FY 2015-2017

2.50

2.50

Commissioner (Appeals)

Apr 2013 to Sept 2016

47.01

43.81

Asst. / Deputy / Joint Commissioner

FY 2012-2013

2.11

2.11

Asst. / Deputy / Joint Commissioner

Apr-1998 to Aug-1999

14.67

14.67

Apr-2005 to Sept-2016

Gujarat Value added tax Act 2003 Gujarat Value Added Tax Joint / Dy. Commissioner of Commercial Tax

FY 2006-07 to 2012-13

2886.83

2586.83

Central Sales Tax Act Central Sales Additional Commissioner of Sales Tax

FY 1998-99

0.14

0.14

1956 Tax Delhi
Central Sales Assistance Commissioner of Sales Tax

FY 1995-96

2.21

2.21

Tax West Bengal
Central Sales Joint / Dy. Commissioner of Commercial

FY 2006-07 to 2010-11

2754.92

2579.92

Tax Tax

(viii) In our opinion and according to the information and explanationsgiven to us the company has not defaulted in the repayment of loans or borrowings to thefinancial institutions & banks. The Company has not taken any loans or borrowings fromGovernment and has not issued any debentures.

(ix) In our opinion and according to the information and explanationsgiven to us the money raised by way of debt instruments & term loans during the yearhave been applied by the Company for the purpose for which they were raised. During theyear the Company has not raised moneys by way of public offer (x) In our opinion andaccording to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

(xi) In our opinion and according to the information & explanationsgiven to us the company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V ofthe Companies Act 2013.

(xii) The company is not a Nidhi Company and hence reporting underclause (xii) of the paragraph 3 of the order is not applicable.

(xiii) In our oppinion and according to the information andexplanations given to us all the transactions with the related parties are in compliancewith section 177 and 188 of the Companies Act 2013 where applicable and the details ofrelated party transactions have been disclosed in the standalone Ind AS financialstatements etc. as required by the applicable accounting standards.

(xiv) During the year company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures and hencereporting under clause (xiv) of paragraph 3 of the order is not applicable.

(xv) In our opinion and according to the information and explanationsgiven to us during the year the company has not entered into any non-cash transactionwith its directors or persons connected with him and hence reporting under clause (xv) ofparagraph 3 of the order is not applicable.

(xvi) In our opinion and according to the information and explanationsgiven to us the company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For T R Chadha & Co LLP

Firm's Reg. No-: 006711N/N500028 Chartered Accountants

Brijesh Thakkar

Partner Membership No 135556

Place: Gandhinagar Date: 16/05/2018