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Gujarat Alkalies & Chemicals Ltd.

BSE: 530001 Sector: Industrials
NSE: GUJALKALI ISIN Code: INE186A01019
BSE 00:00 | 26 Nov 605.25 -23.50
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623.75

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601.15

NSE 00:00 | 26 Nov 605.05 -24.20
(-3.85%)
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628.90

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601.00

OPEN 623.75
PREVIOUS CLOSE 628.75
VOLUME 14220
52-Week high 845.50
52-Week low 304.35
P/E 21.47
Mkt Cap.(Rs cr) 4,445
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 623.75
CLOSE 628.75
VOLUME 14220
52-Week high 845.50
52-Week low 304.35
P/E 21.47
Mkt Cap.(Rs cr) 4,445
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Alkalies & Chemicals Ltd. (GUJALKALI) - Auditors Report

Company auditors report

To The Members of

Gujarat Alkalies and Chemicals Limited

Report on the Audit of the Standalone Financial

Statements

Opinion

We have audited the accompanying standalone financial statements of Gujarat Alkaliesand Chemicals Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss including Other Comprehensive income theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone 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 specified 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 2021 and total comprehensiveincome (comprising of profit and other comprehensive income) changes in equity and itscash flows for the year ended on that date. Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditors'Responsibilities 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 together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of these standalone financial statements 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.

Sr. No. Key Audit Matter How our audit addressed the matter
1 Valuation of Investments (Unquoted) Principal Audit Procedures
(Refer to note 6 and 36.9.1 to the standalone financial statements) Our audit procedures included:
Investments in Equity and Securities Instruments (Unquoted) aggregates a significant amount of the Company's Total assets as at March 312021. 1) Evaluated and tested the design and operating effectiveness of the key controls implemented by the Company with respect to the valuation of Investments in Equity and Securities instruments (unquoted) inter alia controls around:
The Company measures its investments in Equity Instruments (Unquoted) at Fair Value through Other Comprehensive Income and its investment in Securities Instruments (Unquoted) at fair value through Profit and Loss as at the Balance Sheet date. Fair value is determined using valuation approach / methodology for which significant inputs are unobservable inputs (Level 3 inputs). a) periodic review by management of the risks of the valuation approach/ methodology;
b) the verification and validation of unobservable inputs;
c) selection and competence evaluation of external valuer;
2) Involved the Internal fair value experts and: a) Assessed the reasonableness of the valuation approach / methodology and inputs used; b) Assessed the reasonableness of the valuation results determined by the external valuer.
Conclusion:
The valuation approach / methodology adopted by the management in certain cases are single valuation methods and in some cases multiple valuation approaches and hence involve significant judgment as regards the methods and inputs used. Based on the procedures described above we did not identify any material exceptions to the management's assertions and treatment presentation and disclosure of the subject matter in financial statements.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's Board of Directors is responsible for preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Management Discussion and Analysis Reporton Corporate Governance and Shareholder's Information but does not include the standalonefinancial statements and our auditors' report thereon. The above-referred information isexpected to be made available to us after the date of this audit report.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

When we read the information if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake appropriate actions necessitated by the circumstances and the applicable laws andregulations.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either

intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

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 auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained

up to the date of our auditors' report. However future events or conditions may causethe Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies 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 auditors' report unless law or regulation precludes public disclosure about thematters or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in "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 books;

c. the Balance Sheet the Statement of Profit and Loss including other comprehensiveincome the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards (Ind AS) prescribed under Section 133 of the Act;

e. on the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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 with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure B";

g. with respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of section 197(16) of the Act as amended: in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act; and

h. with respect to the other matters to be included in the Auditors' 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 - Refer Note 42 to the standalonefinancial statements;

ii. the Company did not have any long-term contracts including derivative contracts asat March 31 2021 for which 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.

For K.C. Mehta & Co. Chartered Accountants Firm's Registration No. 106237W
Place: Vadodara Date: May 18 2021 Vishal P. Doshi Partner Membership No. 101533 UDIN: 21101533AAAABG6760

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

The annexure referred to in our Independent Auditors' Report to the members of GujaratAlkalies and Chemicals Limited ("the Company") on the financial statements forthe year ended March 31 2021 we report that:

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

(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date. Immovable properties of land and buildings whosetitle deeds have been pledged as security for loans are held in the name of the Companybased on the confirmations directly received by us from the lender. In respect ofimmovable properties of land and buildings that have been taken on lease and disclosed asfixed asset in the financial statements the lease agreements are in the name of theCompany where the Company is the lessee in the agreement except the lease deed in respectof Plot No. 3 at Dahej for the balance land admeasuring 44032 sq. meters having value ofRs. 15.86 Lakhs is pending for execution.

ii. The Inventories have been physically verified by the management during the year andin our opinion the frequency of verification is reasonable. As explained to us therewere no material discrepancies on physical verification of inventory as compared to thebook records.

iii. The Company has not granted any loans secured or unsecured to Companies firmsLimited Liability

Partnerships or other parties covered in the register maintained under section 189 ofthe Companies Act 2013 and therefore reporting under clause (iii) of the Order is notapplicable to the Company.

iv. The Company has not granted any loans or provided any guarantees or security to theparties covered under section 185 of the Act. In our opinion and according to theinformation and explanation given to us the Company has complied with the provisions ofsection 186 of the Act in respect of the Investments made.

v. According to the information and explanations given to us the Company has notaccepted any deposits during the year from the public within the meaning of provisions ofsection 73 to 76 of the Companies Act 2013 and the rules framed thereunder and thereforereporting under clause (v) of the Order is not applicable to the Company.

vi. We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by the Central Government for maintenance of cost records undersub-section (1) of section 148 of the Companies Act 2013 and are of the opinion thatprima facie the prescribed records have been made and maintained. We have however notmade a detailed examination of the records with a view to determining whether they areaccurate or complete.

vii. (a) According to the information and explanations given to us the Company hasbeen generally regular in depositing with appropriate authorities undisputed statutorydues including provident fund employee's state insurance income-tax value added taxgoods and service tax cess and other statutory dues applicable to it. Further noundisputed amounts payable in respect of provident fund employee's state insuranceincome tax value added tax goods and service tax cess and any other statutory dues werein arrears as at March 31 2021 for a period of more than six months from the date theybecome payable.

(b) Dues of Income tax sales tax value added tax and excise which have not beendeposited on account of any dispute as on March 31 2021 are as follows:

(Rs in lakhs)

Name of Statue Nature of Dues Forum where the Dispute is Pending Period to which the Amount Relates Amount Involved Amount Unpaid
Gujarat Sales Tax Act 1969 Sales Tax Liability Joint Commissioner of Appeals 2000-01 to 2005-06 20431.56 20431.56
(Including Purchase Tax Gujarat Sales Tax Tribunal 2002-03 to 2005-06 50.18 46.68
Liability) Deputy Commissioner of State Tax Appeals 2016-17 to 2017-18 169.32 148.81
Income Tax Act 1961 Income Tax Commissioner of Income Tax (Appeals) 2009-10 2013-14 to 2015-16 1136.84 Nil
High Court Gujarat 2003-04 to 2006-07 2007-08 2009-10 2010-11 8047.88 1119.00
Supreme Court 2007-08 5215.45 3586.71
Finance Act 1994 Service Tax High Court April 2010 to January 2015 74.61 68.08
Central Excise and Service Tax Appellate Tribunal October 2004 to June 2017 637.09 595.12
Commissioner (Appeals) April 2011 to February 2016 1.59 1.48
Central Excise Act 1944 Central Excise Central Excise and Service Tax Appellate Tribunal January 2004 to June 2017 3175.50 3051.40
High Court Gujarat 1996-97 to 2001-02 1719.66 462.12

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks. The company has not taken anyloans from financial institutions and Government and has not issued any debentures.

ix. The Company has not raised money by way of initial public offer or further publicoffer (including debt instrument) and term loans during the year and therefore reportingunder clause (ix) of the Order is not applicable to the Company.

x. To the best of our knowledge and according to information and explanations given tous no material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the course of our audit.

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 for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi company and therefore reporting under clause (xii) ofthe Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us andbased on our examination

of the records of the Company all transactions with the related parties are incompliance with Section 177 and 188 of the Act where applicable and the details have beendisclosed in the financial statements as required by the applicable accounting standards.

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 reporting under clause(xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith directors and therefore reporting under clause (xv) of the Order is not applicableto the Company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For K.C. Mehta & Co. Chartered Accountants Firm's Registration No. 106237W
Place: Vadodara Date: May 18 2021 Vishal P. Doshi Partner Membership No. 101533 UDIN: 21101533AAAABG6760

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Gujarat Alkalies and ChemicalsLimited on the standalone financial statements of even date)

Report on the Internal Financial Controls with reference to standalone financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls with reference to standalone financialstatements of Gujarat Alkalies and Chemicals Limited ("the Company") as of March31 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended 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 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 and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of theCompanies 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 ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of internal financialcontrols with reference to financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors' judgement including the assessment of the risks of material misstatement of thefinancial 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 controls withreference to standalone financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A Company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A Company's internalfinancial controls with reference to standalone financial statements includes thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe Company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to standalonefinancial statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may 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 with reference to financial statements and such internalfinancial controls with reference to standalone financial statements were operatingeffectively as at March 31 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.

For K.C. Mehta & Co. Chartered Accountants Firm's Registration No. 106237W
Place: Vadodara Date: May 18 2021 Vishal P. Doshi Partner Membership No. 101533 UDIN: 21101533AAAABG6760

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