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National Fertilizer Ltd.

BSE: 523630 Sector: Agri and agri inputs
NSE: NFL ISIN Code: INE870D01012
BSE 00:00 | 24 Apr 2020 National Fertilizer Ltd
NSE 05:30 | 01 Jan 1970 National Fertilizer Ltd

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OPEN 24.15
PREVIOUS CLOSE 24.55
VOLUME 60371
52-Week high 40.90
52-Week low 15.00
P/E 8.44
Mkt Cap.(Rs cr) 1,258
Buy Price 25.70
Buy Qty 1354.00
Sell Price 25.90
Sell Qty 10.00
OPEN 24.15
CLOSE 24.55
VOLUME 60371
52-Week high 40.90
52-Week low 15.00
P/E 8.44
Mkt Cap.(Rs cr) 1,258
Buy Price 25.70
Buy Qty 1354.00
Sell Price 25.90
Sell Qty 10.00

National Fertilizer Ltd. (NFL) - Auditors Report


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Company auditors report

To the Members of National Fertilizers Limited

Report on the Standalone Ind AS Financial Statements Opinion

We have audited the accompanying standalone Ind AS financial statements of NationalFertilizers Limited (‘the Balance Sheet as at 31st March 2019 the statement ofprofit and loss (including other comprehensive income) the statement of cash flows andthe statement of changes in equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information (herein after referredto as "standalone Ind AS financial statements").

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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI’s Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Going concern

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. However future events or conditions may cause theCompany to cease to continue as a going concern.

As per the sufficient and appropriate audit evidence obtained during the audit weconclude that based on the audit evidence obtained we have not found any indication ofhaving existence of material uncertainty. Accordingly we assume going concern assumptionof the audit. Our conclusions are based on the audit evidence obtained up to the date ofour auditor’s report.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificancein our audit of the standalone financialstatements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report. Summary of the same is mentionedhere under:

Responsibilities of Management for the 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

India including the Indian Accounting Standards (Ind AS) prescribed under Section 133of the Act read with relevant rules issued thereunder. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements 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 standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibility

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements. As part of an auditin accordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of section 143(11)of the Act we give in the "Annexure A" a statement on the matters specified inthe paragraph 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 the statement of cash flowsand the statement of changes in equity dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of theAct;

(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 the requirements of section 197(16) of the Act as amended: In ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(h) 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 onits financialstatements position its standalone Ind AS Refer Note 45 to the standalone Ind AS 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; and

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 giveour report in the attached "Annexure C".

For HDSG & ASSOCIATES For S MANN & COMPANY
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 002871N Firm’s Registration No.: 000075N
Harbir Gulati Subhash Chander Mann
Partner Partner
Membership number: 084072 Membership number: 080500
Place: New Delhi
Date: 2nd May 2019

ANNEXURE "A"

The Annexure refer to in Independent Auditor’s Report to the members of theCompany on the standalone Ind

AS financial statements for the year ended 31st March 2019 we report that:

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

(b) As explained to us the Company has a regular program of physical verification ofits fixed assets by which all fixed assets are verified in a phased manner which in ouropinion is reasonable having regard to the size of the Company and nature of its assets.Accordingly the physical verificationof fixed assets has been carried out by themanagement during the year. We are informed that discrepancies noticed on suchverification were not material and have been properly dealt with in the books of account.

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

Immovable Properties Area
Bhatinda Unit 14.261 Acres
Vijaipur Unit 1250.254 Acres
Alwar 0.164 Acres

(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 2013 ("the Act"). Accordingly paragraph 3(iii)(a) (b) (c) of the Orderis 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 withrespect to 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 otherrelevant provisions of the 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 Act and are of the opinionthat prima facie the prescribed records have been maintained. We have however not madea detailed examination of the Cost Records with a view to determine whether they areaccurate 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 indepositing with the appropriate authorities undisputed statutory dues includingProvident Fund

Employees’ State Insurance Income tax Sales tax Wealth tax Service taxCustoms duty Excise duty Cess and Goods and Service Tax other statutory dues.

According to the information and explanations given to us no undisputed amounts remainpayable in respect of such statutory liabilities as at 31st March 2019 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 31stMarch 2019 which have not been deposited on account ofmatters pending in appeal before appropriate authorities are as under:

Name of Statute Nature of Dues Amount Involved Period to which the Forum where the dispute is
(Rs. in crore) amount relates pending
Income Tax Act1961 Income tax 29.25 AY 2006-07 AY 2006-07 and AY 2011-12 to 2014-15 ITAT
Central Excise Act1944 Excise Duty 1.04 2005-06 Supreme Court
Customs Act 1962 Custom Duty 6.02 1996-97 CESTAT Mumbai
Central Excise Act1944 Excise Duty 3.56 2013 CESTAT
Punjab VAT Act VAT 0.55 2006-07 to 2009-10 Dy. Excise and Taxation Commissioner (Appeal) Patiala
Finance Act 1994 Service Tax 0.33 2011-12 to 2014-15 CESTAT (Prayagraj)
Punjab Municipal Act Property Tax 0.81 2007-08 to 2009-10 & 2013-14 Municipal Council Nangal
0.09 1982-83 to 1990-91 Municipal Council Nangal
Haryana Local Development tax Act2000 Entry tax 6.72 2000-01 to 2002-03 Joint Excise Taxation Comm. Rohtak
Madhya Pradesh Value Added Tax Act 2002 VAT 0.01 2008-09 Appellate Board Commercial Tax
Entry Tax Act 1976 Entry Tax 0.07 2010-11 2012-13 2013-14 and 2014-15 Appellate Board Commercial Tax
M P Vidyut Shulk Adhiniyam 2012 Electricity Generation Duty & Cess 0.47 2008-2012 MP High Court
Municipal Corporation Bathinda Octroi Charges 0.40 FY 1998-99 1991-92 Punajb and Haryana High Court

any bank or bonds/debenture holders as 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) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 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 partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the standalone Ind AS financial statementsas required by the applicable accounting 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 anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. (xv) According to the information and explanations given to usand based on our examination of the records of the Company the Company has notentered into non-cash transactions with directors or persons connected with him.Accordingly paragraph 3(xv) of the 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 HDSG & ASSOCIATES For S MANN & COMPANY
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 002871N Firm’s Registration No.: 000075N
Harbir Gulati Subhash Chander Mann
Partner Partner
Membership number: 084072 Membership number: 080500
Place: New Delhi
Date: 2nd May 2019

ANNEXURE "B"

The Annexure referred to in Independent Auditor’s Report to the members of theCompany on the standalone

Ind AS financial statement for the year ended 31st March 2019.

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 31 March 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly andefficientconduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financialinformation as required under the Act.

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 deemed to be prescribed under section 143(10)of the Act to the extent applicable to an audit of internal financial controls bothapplicable 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 wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 operatingeffectiveness of internal control based on the assessed risk. 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.

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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to financial reporting and the preparation of financial statements for externalpurposes in A company’s internal financial control over financial reporting includesthose 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 thatcould 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 thattheinternal financial reportingmay controlover become inadequate because of changes in conditions or that the degree ofcompliance 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 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.

For HDSG & ASSOCIATES For S MANN & COMPANY
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 002871N Firm’s Registration No.: 000075N
Harbir Gulati Subhash Chander Mann
Partner Partner
Membership number: 084072 Membership number: 080500
Place: New Delhi
Date: 2nd May 2019


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