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Mangalore Chemicals & Fertilizers Ltd.

BSE: 530011 Sector: Agri and agri inputs
NSE: MANGCHEFER ISIN Code: INE558B01017
BSE 00:00 | 22 Oct 39.80 -1.15
(-2.81%)
OPEN

40.75

HIGH

41.55

LOW

39.65

NSE 00:00 | 22 Oct 39.65 -1.30
(-3.17%)
OPEN

42.00

HIGH

42.00

LOW

39.50

OPEN 40.75
PREVIOUS CLOSE 40.95
VOLUME 25183
52-Week high 89.20
52-Week low 39.65
P/E 7.88
Mkt Cap.(Rs cr) 472
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 40.75
CLOSE 40.95
VOLUME 25183
52-Week high 89.20
52-Week low 39.65
P/E 7.88
Mkt Cap.(Rs cr) 472
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mangalore Chemicals & Fertilizers Ltd. (MANGCHEFER) - Auditors Report

Company auditors report

To

THE MEMBERS OF MANGALORE CHEMICALS AND FERTILIZERS LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Mangalore Chemicals andFertilizers Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement the Statement of Changes in Equity for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the 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 Ind AS financial statements that give a true and fair view of the financialposition cash financial flows and changes in equity of the Company in accordance withaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. We have taken 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 of the Ind ASfinancial statements in accordance with the Standards on Auditing issued by the Instituteof Chartered Accountants of India as specified under Section 143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the Ind AS financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of the 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 accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the Ind AS financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Ind ASfinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the Ind AS financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note 22(b) to the accompanying Ind AS financial statementsregarding Urea Government of India (GOI) which is being recognised based on estimates andchanges if any are recognised in the year of finalisation of the prices by the GOI underthe scheme. Our opinion is not qualified in respect of this matter.

Other Matter

The Ind AS financial statements of the Company for the year ended March 31 2017included in these Ind AS financial statements have been audited by the predecessorauditor who expressed an unmodified opinion on those statements on May 18 2017.

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 "Annexure 1" a statement on the matters specified paragraphs3 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 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 the Statement of Changes in Equity dealtwith by this report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164(2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial operating effectivenessof such controls refer to our separate 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 in Companies (Audit and Auditors) Rules 2014 in ouropinion and 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 Ind AS financial statements Refer Note 35(a) to the Ind AS financialstatements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long-term contracts including derivativecontracts; and

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

For S.R. Batliboi & Co. LLP

ICAI Firm registration number: 301003E/E300005

Chartered Accountants

per Anil Gupta Partner Membership No.: 87921

Place : New Delhi

Date : May 24 2018

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND AS FINANCIALSTATEMENTS OF MANGALORE CHEMICALS AND FERTILIZERS LIMITED

Statement on the matters specified in paragraphs 3 and

4 of the Companies (Auditor's report) Order 2016 ("the Order")

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

b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification

c) According to the information and explanations given by the management andconfirmation from banks relating to title deeds of immovable properties mortgaged with thebanks (refer Note 15 and 19 to the accompanying Ind AS financial statements for details)for securing the borrowings raised by the Company the title deeds of immovable propertiesincluded in property plant and equipment are held in the name of the Company. ii. of Themanagement has conducted physical verification inventory at reasonable intervals duringthe year and no material discrepancies were noticed on such physical verification

iii. According to the information and explanations given to us the Company has notgranted 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 ("the Act"). Accordingly the provisions of clause3(iii)(a)(b) and (c) of the Order are not applicable to the Company and hence notcommented upon.

iv. In our opinion and according to the information and explanations given to usprovisions of Section 186 of the Act in respect of investments made by the Company havebeen complied with. The Company has not advanced loans to directors / to a company inwhich the director is interested to which provisions of Section 185 of the Act apply andhas not given loans /guarantees/ provided security to which the provisions of Section 186of the Act apply and hence not commented upon.

v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under Section148(1) of the Act related to the manufacture of fertiliser and are of the opinion thatprima facie the specified accounts and records have been made and maintained. We havenot however made a detailed examination of the same.

vii. a) Undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax goods and service tax duty of custom duty of excisevalue added tax cess and other statutory dues have generally been regularly depositedwith the appropriate authorities though there have been slight delays in a few cases.

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 goods and service tax duty of custom duty of excise value added tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable. c) According to the records of the Company thedues outstanding of income tax sales-tax service tax goods and service tax duty ofcustom duty of excise value added tax and cess on account of any dispute are asfollows:

Name of the Statute Nature of the dues Amount (including interest and penalty) Payment under protest Period to which the amount relates Forum where the dispute is pending
(Rs. in Lakhs) (Rs. in Lakhs)
The Income Tax Act 1961 Income tax 358.04 52.89 FY 2013-14 of Income Tax Commissioner (Appeals)
The Customs Act 1962 Customs duty 90.60 - FY 2011-12 Customs Excise and Service Tax Appellate Tribunal
Karnataka Value Added Tax Act 2003 Entry tax 60.05 - FY 2011-12 The High Court of Karnataka

viii. In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowings to banks.The Company did not have any loans or borrowings from financial institution or governmentand outstanding dues in respect of debenture holders during the year.

ix. In our opinion and according to information and explanations given by themanagement monies raised by the Company by way of term loans were applied for thepurposes for which loans were obtained. The Company has not raised any money by way ofinitial public offer or further public offer (including debt instruments) and hence notcommented upon.

x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Ind AS financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or nomaterial fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

xi. According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

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 of Actwhere applicable and the details have been disclosed in the notes to the Ind AS financialstatements 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) are not applicable tothe Company and not commented upon.

xv. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in Section 192 of the Act.

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. Batliboi & Co. LLP

ICAI Firm registration number: 301003E/E300005

Chartered Accountants

per Anil Gupta Partner Membership No.: 87921

Place : New Delhi

Date : May 24 2018

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND AS FINANCIALSTATEMENTS OF MANGALORE CHEMICALS AND 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 MangaloreChemicals and Fertilizers Limited ("the Company") as of March 31 2018 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended 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 controls 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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Ind AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting withreference to these Ind AS financial statements 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 with reference to theseInd AS financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these Ind ASfinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal controls based on theassessed risk. The procedures selected depend on the auditor's judgement 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 internal financial controls over financialreporting with reference to these Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting with Reference to theseInd AS Financial Statements

A company's internal financial controls over financial reporting with reference tothese Ind AS financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial controls over financial reporting withreference to these Ind AS financial statements 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) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withReference to these Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these Ind AS financial statements including the possibilityof collusion or improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these Ind ASfinancial statements to future periods are subject to the risk that the internal financialcontrols over financial reporting with reference to these Ind AS financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these Ind ASfinancial statements and such internal financial controls over financial reporting withreference to these Ind AS financial statements were operating effectively as at March 312018 based on the internal controls over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For S.R. Batliboi & Co. LLP

ICAI Firm registration number: 301003E/E300005

Chartered Accountants

per Anil Gupta Partner Membership No.: 87921

Place : New Delhi

Date : May 24 2018