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Madras Fertilizers Ltd.

BSE: 590134 Sector: Agri and agri inputs
NSE: MADRASFERT ISIN Code: INE414A01015
BSE 00:00 | 04 Aug 17.40 0.20
(1.16%)
OPEN

17.45

HIGH

17.95

LOW

17.05

NSE 00:00 | 04 Aug 17.45 0.15
(0.87%)
OPEN

17.40

HIGH

17.70

LOW

17.25

OPEN 17.45
PREVIOUS CLOSE 17.20
VOLUME 12559
52-Week high 25.25
52-Week low 8.86
P/E
Mkt Cap.(Rs cr) 280
Buy Price 17.40
Buy Qty 500.00
Sell Price 17.70
Sell Qty 1000.00
OPEN 17.45
CLOSE 17.20
VOLUME 12559
52-Week high 25.25
52-Week low 8.86
P/E
Mkt Cap.(Rs cr) 280
Buy Price 17.40
Buy Qty 500.00
Sell Price 17.70
Sell Qty 1000.00

Madras Fertilizers Ltd. (MADRASFERT) - Auditors Report

Company auditors report

To the Members of Madras Fertilizers Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Madras Fertilizers LimitedManali which comprise the Balance Sheet as at March 31 2019 and the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand the Statement of Cash Flows for the year then ended and a summary of the significantaccounting 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. In conducting our Audit we have taken into account the provisions ofthe Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules made thereunderand the Order issued under section 143(11) of the Act. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial 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 March 31 2019; and its Loss Total Comprehensive Income the changes in Equity andCash Flows for the year ended on that date.

Emphasis of Matter

i. We draw attention to Note 47 regarding a. Accounting of a sum of Rs.144.92 Crorestowards escalation in input prices which has been considered as receivable from FertilizerIndustry Coordination Committee (FICC) for the year ended 31st March 2019 under NewPricing Scheme (NPS) for Urea. Adjustments may arise in future in respect of the above onfinal payment. b. Accounting of a sum of Rs.14.14 Crores of subsidy claim for additionalfixed cost of Rs.350/MT of Urea as envisaged in the modified NPS III Policy announced byDOF dated April 02 2014 the notification of which is awaited..

ii. We draw attention to Note 43 (g) regarding balances in Long term borrowings andOther current liabilities from GOI Trade Receivable/ Payables Claim recoverable andloans and advances are subject to confirmation and consequential adjustments; Our opinionis not modified in respect of the above matters.

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 sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

(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;

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

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.

e) The Ministry of Corporate Affairs has clarified that the provisions of sub section(2) of Section 164 the Companies Act 2013 are not applicable to Government Companies.

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".

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 financial statements.

ii. The Company has made provision as required under the applicable law and Accountingstandards for material foreseeable losses if any on long-term contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe investor's education and protection fund by the Company.

(3) As required by section 143(5) of the Act we have considered the directions issuedby the Comptroller and Auditor General of India the action taken thereon and its impacton the accounts and financial statements of the company:

Areas Examined Suggested Replies

1 Whether the company has system in place to process all Yes the company has system inplace to the accounting transactions through IT system? If yes the process all theaccounting transactions through implications of processing of accounting transactionsoutside IT IT system. system on the integrity of the accounts along with the financialimplications if any may be stated.

2 Whether there is any restructuring of an existing loan or cases During the yearthere was no Restructuring of of waiver/write off of debts /loans/interest etc. made by alender an existing loan or cases of waiver/write off of to the company due to thecompany's inability to repay the debts /loans/interest etc. made by a lender to loan? Ifyes the financial impact may be stated. Madras Fertilizers.

3 Whether funds received/receivable for specific schemes from During the year No fundswere received or are central/ state agencies were properly accounted for/ utilized asreceivable for Specific Schemes from Central or per its terms and conditions? List thecases of deviation. State Agencies.

for J. V. RAMANUJAM & Co.
Chartered Accountants
FRN: 02947S
(SRI NARAYANA JAKHOTIA)
Chennai Partner
27th May 2019 M. No: 233192

"ANNEXURE A" TO INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on the accounts of MadrasFertilizers Limited Manali ("The Company") for the year ended March 31 2019)

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

(b) According to the information and explanations given to us physical verification ofmovable fixed assets is being conducted in a phased manner by the management under aprogramme designed to cover all the movable fixed assets over a period of three yearswhich in our opinion is reasonable having regard to the size of the Company and natureof its business last physical verification was done during 2014 and the same is due tobe done for 2019. As per the information and explanations provided by the management thesame is in progress as on date. Immovable Fixed Assets like plant and machinery is beinginspected every year by an independent chartered engineer.

(c) Title deeds of immovable properties were not provided to us for verification; hencewe are unable to comment on the same.

ii) (a) Physical verification of inventories inside factory premises and at ChennaiPort has been carried out by a independent surveyor at year end and the physicalverification of stocks of stores and spare parts has been conducted by an independent firmof Chartered Accountants on a ongoing basis so as to complete the verification of allitems over the period of one year. Finished goods at warehouse are taken as perwarehousing certificates. Warehousing certificates has not been received in a few caseswhich however is not significant in value.

(b) In our opinion and according to the information and explanations given to us theprocedures for physical verification of inventory followed by the management werereasonable and adequate in relation to the size of the company and the nature of itsbusiness.

(c) In our opinion the company has maintained proper records of inventory. We areinformed that no major discrepancies were noticed on verification between the physicalstock and book records.

iii) According to the information given to us the Company has not granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013. Thereforeclauses (iii) (a) (iii) (b) and (iii)(c) of Paragraph 3 of the Order are not applicableto the Company.

iv) The Company has complied with the provisions of the section 185 and 186 of theCompanies Act 2013 in respect of loans investments guarantees and security.

v) According to the information and explanations given to us the Company has compliedwith the provisions of Section 73 to 76 other relevant provisions of the Act and theCompanies (Acceptance of Deposits) Rules 2014 with regard to deposits accepted frompublic. The Company has not accepted any deposits from public during the year within themeaning of sections 73 to 76 or any other relevant provisions of the Companies Act 2013and the Companies (Acceptance of Deposits) Rules 2014.

vi) We have broadly reviewed the books of account and records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 prescribed by the CentralGovernment under section 148(1) of the Companies Act 2013 and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate and complete.

vii) (a) According to the information and explanations given to us in our opinion theCompany is generally regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax SalesTax Service Tax duty of Customs duty of Excise Value Added Tax Cess and any otherstatutory dues as applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees State Insurance Income Tax Sales TaxService Tax duty of Customs duty of Excise Value Added Tax Cess and any otherstatutory dues were outstanding as at March 31 2019 for a period of more than six monthsfrom the date they became payable except for the following:

Nature of Dues Amount in Crores
Entry tax (Tamil Nadu) 2.53
VAT (Tamil Nadu) 2.51
Sales Tax under TNGST Act 7.79
Total 12.83

(c) According to the information and explanations given to us there are no dues ofIncome Tax Act Excise Duty Customs Duty Value Added Tax Sales Tax and Service Taxwhich have not been deposited with the appropriate authorities on account of any dispute.

viii) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to afinancial institution bank or dues to debenture holders except in respect of the defaultof repayment of principal amount of the following Government of India (GOI) Loans:

Nature of Loan Year of Default INR in Crores Year of default INR in Crores
GOI Loans 2004-05 23.49 2012-13 38.33
GOI Loans 2005-06 23.49 2013-14 45.78
GOI Loans 2006-07 24.89 2014-15 32.68
GOI Loans 2007-08 26.08 2015-16 32.68
GOI Loans 2008-09 27.03 2016-17 31.28
GOI Loans 2009-10 26.44 2017-18 30.09
GOI Loans 2010-11 27.34 2018-19 29.15
GOI Loans 2011-12 28.63
Total * 447.38

* The above loan consists of Plan loans Non Plan Loans and Revamp Loans.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no fraud by the Company or anyfraud on the Company by its officers or employees has been noticed or reported during thecourse of our Audit.

xi) In respect of sl. no. (xi) being a Govt. Company Section 197 of the CompaniesAct 2013 is not applicable to the Company in view of Notification no. G.S.R. 463(E) dtd.05-06-2015

xii) The company is not a Nidhi Company. Therefore clause 3 (xii) of the Companies(Auditor's Report) Order 2016 is not applicable to the Company.

xiii) According to the records of the Company examined by us and the information andexplanations given to us there are no related party transactions; accordingly clause (xi)of the Companies (Auditor's Report) Order 2016 is not applicable to the Company.

xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and therefore clause 3(xiv) of theCompanies (Auditor's Report) Order 2016 is not applicable to the Company.

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) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

for J. V. RAMANUJAM & Co.
Chartered Accountants
FRN: 02947S
(SRI NARAYANA JAKHOTIA)
Chennai Partner
27th May 2019 M. No: 233192

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF MADRAS 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 M/s MadrasFertilizers Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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 company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 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 obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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 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 2019 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 and jointly controlled companies which are companies incorporated inIndia as of that date.

for J. V. RAMANUJAM & Co.
Chartered Accountants
FRN: 02947S
(SRI NARAYANA JAKHOTIA)
Chennai Partner
27th May 2019 M. No: 233192