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Gujarat State Fertilizers & Chemicals Chairman's Speech > Engineering - Heavy > Chairman's Speech from Gujarat State Fertilizers & Chemicals - BSE: 500690, NSE: GSFC
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Gujarat State Fertilizers & Chemicals

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Chairman's Speech (Gujarat State Fertilizers & Chemicals) Year : Mar '05
We have audited the attached Balance Sheet of Gujarat State Fertilizers
 & Chemicals Limited as at 31st March 2005, and also the Profit and Loss
 Account for the year ended on that date annexed thereto and also the
 Cash Flow Statement for the year ended on that date in which are
 incorporated the accounts of the Polymers Unit and Fibre Unit of the
 Company, audited by another firm of Chartered Accountants. These
 financial statements are the responsibility of the Company's
 management. Our responsibility is to express an opinion on these
 financial statements based on our audit.
 
 We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statement
 presentation.  We believe that our audit provides a reasonable basis
 for our opinion.
 
 As required by the Companies (Auditor's Report) Order, 2003 issued by
 the Central Government of India in terms of sub-section (4A) of section
 227 of the Companies Act, 1956, we enclose in the Annexure a statement
 on the matters specified in paragraphs 4 and 5 of the said Order.
 
 Further to our comments in the Annexure referred to above, we report
 that :
 
 (i) We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (ii) In our opinion proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books (and proper returns adequate for the purposes of our audit
 have been received from the Polymers and Fibre Units not visited by us.
 The Branch Auditor's Report(s) have been forwarded to us and have been
 appropriately dealt with);
 
 (iii) The Balance Sheet, Profit and Loss Account and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account and with the audited returns from the branches;
 
 (iv) In our opinion, the Balance Sheet, Profit and Loss Account and
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3c) of section 211 of
 the Companies Act, 1956;
 
 (v) On the basis of written representations received from certain
 directors of the Company and from the management in respect of other
 directors exempted vide General Circular No.8/200l-CLV dated 22-3-2002
 issued by Ministry of Law, Justice and Company Affairs, Department of
 Company Affairs and taken on record by the Board of Directors, we
 report that none of the directors is disqualified as on 31st March 2005
 from being appointed as a director of the Company in terms of clause
 (g) of sub-section (1) of section 274 of the Companies Act, 1956;
 
 (vi) In our opinion and to the best of our information and according to
 the explanations given to us and subject to :
 
 Note No. 14 of provision not considered out of the order of
 Commissioner of Labour; and read with Note No. 3 in respect of Gas
 price of ONGC and other notes thereon, the said accounts give the
 information required by the Companies Act, 1956, in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India;
 
 (a) in the case of the balance sheet, of the state of affairs of the
 Company as at 31st March 2005;
 
 (b) in the case of the profit and loss account, of the profit for the
 year ended on that date; and
 
 (c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
                                       For GHIYA & COMPANY
                                       Chartered Accountants
 
                                       DEVENDRA UPADHYAY
 
 Place : Fertilizernagar               PARTNER
 Date  : June 11, 2005                 Membership No. 076727
 
 Annexure to the Auditor's Report      
 
 Annexure referred to in paragraph 3 of our Auditor's Report of even
 date on the financial statements for the year ended 31st March, 2005 of
 Gujarat State Fertilizers & Chemicals Limited
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) As explained to us, the Fixed Assets have been physically verified
 by the management during the year and there is regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) During the year, the Company has not disposed of a major part of
 the plant and machinery.
 
 (ii) (a) The inventory has been physically verified during the year by
 the management. In our opinion, the frequency of verification is
 reasonable.
 
 (b) The procedures of physical verification of inventories followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. The
 discrepancies noticed on verification between the physical stocks and
 the book records have been properly dealt with in the books of account.
 
 (iii) According to the information and explanations given to us, there
 are no companies, firms and other parties listed in the register
 maintained u/s 301 of the Companies Act, 1956. As such, clause (a) to
 (d) are not applicable to the Company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business with regard to purchases of inventory, fixed assets and with
 regard to the sale of goods. During the course of our audit, we have
 not observed any continuing failure to correct major weaknesses in
 internal controls.
 
 (v) (a) According to the information and explanations given to us, we
 are of the opinion that the transactions that need to be entered into
 the register maintained under section 301 of the Companies Act, 1956
 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered in the register maintained under section 301 of
 the Companies Act, 1956 and exceeding the value of rupees five lakhs in
 respect of any party during the year have been made at prices which are
 reasonable having regard to prevailing market prices at the relevant
 time.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of sections
 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance
 of Deposits) Rules, 1975 with regard to the deposits accepted from the
 public. No order has been passed by the Company Law Board.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the Company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956 and we are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education protection fund, employees' state insurance, income
 tax, sales tax, wealth tax, custom duty, excise duty, cess and other
 material statutory dues applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of income tax, wealth tax, sales
 tax, customs duty, excise duty and cess were in arrears, as at
 31-3-2005 for a period of more than six months from the date they
 became payable.
 
 (c) According to the information and explanations given to us, the
 following are the details of sales tax, income tax, customs duty,
 wealth tax, excise duty and cess which have not been deposited on
 account of any dispute :
 
 Nature of the Dues     Amount      Forum where dispute is pending
                     (Rs.in Lacs)
 
 Excise Duty            1799.79     Supreme Court
                         199.09     CESTAT
 Sales Tax                 2.34     Sales Tax Departmental Authorities
 Octroi                  148.81     Stay granted from local Authorities
 Income Tax               15.72     C.I.T. (Appeals)
 
 (x) In our opinion, the accumulated losses of the Company, are not more
 than fifty percent of its net worth. The Company has not incurred cash
 losses during the financial year covered by our audit and has not
 incurred the cash loss in immediately preceding financial year.
 
 (xi) The Company has not defaulted in repayment of dues to financial
 institution or bank or debenture holders.
 
 (xii) As explained to us, the Company has not granted any loans or
 advances on the basis of security by way of pledge of shares,
 debentures or any other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
 benefit fund/society. Therefore, the provisions of clause 4(xiii) of
 the Companies (Auditor's Report) Order, 2003 are not applicable to the
 Company.
 
 (xiv) In our opinion, the Company is not dealing in or trading in
 shares, securities, debentures and other investments.  Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
 2003 are not applicable to the Company.
 
 (xv) In our opinion, the terms and conditions on which the Company has
 given guarantees for loans taken by others from banks or financial
 institutions are not prejudicial to the interest of the Company.
 
 (xvi) This clause is not applicable as no term loans have been raised
 during the year.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that the no funds raised on short-term basis have been used for
 long-term investment. No long-term funds have been used to finance
 short-term assets except permanent working capital.
 
 (xviii) According to the information and explanations given to us, the
 Company has not made preferential allotment of shares to parties and
 companies covered in the register maintained under section 301 of the
 Act.
 
 (xix) No debentures have been issued during the year.
 
 (xx) The Company has not raised any money by public issue during the
 year.
 
 (xxi) According to the information and explanations given to us, no
 fraud on or by the Company has been noticed or reported during the
 course of our audit.
 
                                    For GHIYA & COMPANY
                                    Chartered Accountants
 
                                    DEVENDRA UPADHYAY
 Place  :  Fertlizernagar           PARTNER
 Date   :  June 11, 2005            Membership No. 076727
Source : Dion Global Solutions Limited
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