Annual Report 2004 - Nagarjuna Fertilizers

NFCL
To
The Board of Directors
NAGARJUNA FERTILIZERS AND CHEMICALS LTD.
1) We have examined the attached Consolidated Balance
Sheet of NAGARJUNA FERTILIZERS AND
CHEMICALS LTD. and its subsidiaries as at 31st March
2005, the Consolidated Profit and Loss Account and
the Consolidated Cash Flow Statement for the year
then ended.
2) These financial statements are the responsibility of the
Nagarjuna Fertilizers and Chemicals Limited’s
management. Our responsibility is to express an opinion
on these consolidated financial statements based on
our audit. We conducted our audit in accordance with
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 prepared, in all material
respects, in accordance with an identified financial
reporting framework and are free of material
misstatements. 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.
3) We report that the consolidated financial statements
have been prepared by the Company in accordance
with the requirements of Accounting Standard 21
Consolidated Financial Statements, issued by the
Institute of Chartered Accountants of India and on the
basis of the separate audited financial statements of
Nagarjuna Fertilizers and Chemicals Limited and its
subsidiaries included in the consolidated financial
statements.
4) Reference is invited to the following notes on
accounts under Schedule 15:
i) Note No. 11, regarding the shortfall in the available
book value of unquoted investments in
subsidiaries as compared to the cost, which is
not considered permanent dimunition for reasons
stated in referred note.
Owing to non-compliance of AS -13 -Accounting
for Investments, non- provisioning towards
dimunition in the carrying value of investments,
we are unable to form an opinion on the above
matter and its impact on the financial statements
and Profit for the year and consequential effect
on reserves.
ii) Note No.5 (v) regarding adjustment of Rs.46638.27
lakhs being irrecoverable sundry debtors (including
other receivables) and Loans & Advances against
Revaluation Reserve.
5) Note No. 11 regarding:
a) Financial statements of NOCL and NPCL
subsidiaries of the company being drawn up on a
going concern basis for reasons stated in the
said note in respect of which, we are unable to
express an opinion pending financial closure of
the project and, final outcome of various project
related matters respectively.
b) Erosion of investment of Rs.3522.34 Lakhs made
by NPCL a subsidiary of the company in its wholly
owned subsidiary Nagarjuna Electric Generating
Company Limited in view of it’s winding up and
the said loss yet to be written off/adjusted.
6) a) Note No.3 A (iv)regarding non-provisioning of income
tax demand of Rs.94.66 lakhs relating to JESCO a
subsidiary of the company, and
b) Note No.25 regarding non-provisioning of
Rs.1336.47 Lakhs towards additional
compensation claimcd by equipment supplier in
the case of NOCL a subsidiary of the company.
7) Subject to our remarks at Paragraphs 4(i), 5, 6(b)
above, on the basis of the information given to us
and on the consideration of the separate audit reports
on individual audited financial statements of
Nagarjuna Fertilizers and Chemicals Limited and its
aforesaid subsidiaries, in our opinion and to the best
of our information and according to the explanations
given to us, the attached Consolidated Financial
Statements give a true and fair view in conformity
with the accounting principles generally accepted in
India:
Hyderabad
a) In the case of the Consolidated Balance Sheet
of the state of affairs of Nagarjuna Fertilizers
and Chemicals Limited and its subsidiaries as at
31st March 2005,
b) In the case of the Consolidated Profit and Loss
Account of the profit for the year ended, on that
date and
c) In the case of the Consolidated Cash Flow
Statement of the cash flows of Nagarjuna
Fertilizers and Chemicals Limited and its
subsidiaries for the year then ended.
for M. BHASKARA RAO & CO.,
CHARTERED ACCOUNTANTS
Anilkumar Mehta
Partner
April 21, 2005 Membership Number : 14284
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