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Kanchi Karpooram Ltd.

BSE: 538896 Sector: Industrials
NSE: N.A. ISIN Code: INE081G01019
BSE 00:00 | 17 Sep 828.90 -18.45
(-2.18%)
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841.50

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856.90

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NSE 05:30 | 01 Jan Kanchi Karpooram Ltd
OPEN 841.50
PREVIOUS CLOSE 847.35
VOLUME 8830
52-Week high 1365.00
52-Week low 338.00
P/E 5.57
Mkt Cap.(Rs cr) 360
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 841.50
CLOSE 847.35
VOLUME 8830
52-Week high 1365.00
52-Week low 338.00
P/E 5.57
Mkt Cap.(Rs cr) 360
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kanchi Karpooram Ltd. (KANCHIKARPOORAM) - Auditors Report

Company auditors report

TO THE MEMBERS OF

M/s KANCHI KARPOORAM LIMITED

Report on the audit of the Indian Accounting Standards (Ind AS)

Financial Statement

Opinion

1. We have audited the accompanying Ind AS financial statements ofKanchi Karpooram Limited ("the Company") which comprise the balance sheet as atMarch 31 2021 and the statement of profit and loss (including other comprehensiveincome) statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the Statement of Profit and Loss (including other comprehensive income) the changes inEquity and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of the Ind ASfinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key audit matters

4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the Ind AS financial statements of thecurrent period. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Key Audit Matters Principal audit procedures
Cash and cash equivalents • We have tested the design and operating effectiveness of controls with regard to maintenance of cash balances operation of bank accounts and preparation of bank reconciliation statements.
As on 31st March 2021 the Company carries cash and Cash equivalents of R 5589 lakhs. The amount of cash and cash equivalents have been considered a key audit matter given the relative size of the balance in the financial statements.
• We have verified the confirmations of balances from the banks directly received by us and we have performed alternate audit procedures where direct confirmation was not available due to COVID-19 pandemic
Capital Expenditure • We have tested the internal controls pertaining to purchases issues receipts of capital items; recording of direct/indirect expenditure pertaining to the improvement in production facilities and internal technical certification on 'ready for use'.
During the year 2020-21 the Company has capitalized the expenditure incurred on improvement of its production facilities to an extent of Rs. 1595 lakhs. We have considered this a key audit matter as the addition is significant to the total carrying value of property plant and equipment.
• We performed substantive analytical procedures and test of details on capital expenditure incurred towards the improvement in production facilities

Information other than the financial statements and auditors' reportthereon

5. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Board'sReport together with the annexure thereto and Report on Corporate Governance but does notinclude the Ind AS financial statements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Ind AS financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of management and those charged with governance forthe Ind AS financial statements

6. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these Ind ASfinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under section 133 of the Act. 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 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 Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

7. In preparing the Ind AS financial statements Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless Board of Directors either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. The Board of Directorsis also responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of IndAS financial statements

8. Our objectives are to obtain reasonable assurance about whether theInd AS financial statements as a whole are free from material misstatement whether due tofraud or 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 Ind AS financial statements.

9. As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theInd AS financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

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

10. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

11. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

12. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the Ind ASfinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other legal and regulatory requirements

13. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its Directors during theyear is in accordance with the provisions of Section 197 of the Act.

14. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (includingother comprehensive income) the Statement of Changes in Equity and Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2021 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlswith reference to financials statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure A". Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of theCompany's internal financial controls with reference to financial statements.

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The impact of litigations pending against the Company has beendisclosed in note no. 36.

ii. The Company did not have any long-term contracts includingderivative contracts on which there were material foreseeable losses.

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

15. 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 of the Act we give in the Annexure B a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

For P CHANDRASEKAR LLP
Chartered Accountants
FRN 000580S/S200066
S Raghavendhar
Partner
Chennai Membership No. 244016
28th June 2021 UDIN: 21244016AAAADC3715

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 14(f) of the Independent Auditor's Report ofeven date to the members of Kanchi Karpooram Limited on the Ind AS financial statements asof and for the year ended March 31 2021.

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls with reference tofinancial statements of Kanchi Karpooram Limited ("the Company") as of March 312021 in conjunction with our audit of the Ind AS financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct 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 financial information as required under the Act.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to 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 deemed to be prescribed under section 143(10) of the Act to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

4. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

5. A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

6. Because of the inherent limitations of internal financial controlswith reference to 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 financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

7. In our opinion the Company has in all material respects anadequate internal financial controls system with reference to financial statements andsuch internal financial controls with reference to 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 P CHANDRASEKAR LLP
Chartered Accountants
FRN 000580S/S200066
S Raghavendhar
Partner
Chennai Membership No. 244016
28th June 2021 UDIN: 21244016AAAADC3715

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 15 of the Independent Auditor's Report of evendate to the members of Kanchi Karpooram Limited on the Ind AS financial statements as ofand for the year ended March 31 2021

i. a. The Company is maintaining proper records showing fullparticulars including quantitative details and situation of property plant andequipment.

b. The Company has a regular program of physically verifying all thefixed assets at its plants/offices in a phased manner over a period of 2 years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. No Material discrepancies were observed as compared to book records on suchverification.

c. According to the information and explanations given to us and basedon the examination of the documents provided to us we report that the title deeds of allthe immovable properties of land and buildings as disclosed in the Ind AS financialstatements are held in the name of the Company as at the Balance Sheet date.

ii. The Management has conducted physical verification of inventory atreasonable intervals and no material discrepancies were noticed.

iii. According to the information and explanations given to us and onthe basis of our examination of the books of account The Company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under Section 189 of the Act. Therefore theprovisions of Clause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the said Order are notapplicable to the Company.

iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of the loans made by it. The Company has not made anyinvestment or provided any guarantee or security to any company covered under Section 185or 186 of the Companies Act 2013

v. The Company has not accepted any deposits from the public within themeaning of Sections 73 74 75 and 76 of the Act and the Rules framed there under to theextent notified.

vi. Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

vii. According to the information and explanations given to us inrespect of statutory dues:

a) the Company is regular in depositing with the appropriateauthorities the undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Service Tax Sales Tax Customs Duty Excise Duty Cess Goods andService Tax as applicable to the appropriate authorities. There were no undisputed amountspayable which were in arrears as at 31st March 2021 for a period of more than six monthsfrom the date they become payable.

b) According to the information and explanations given to us and therecords of the Company the dues of Income Tax Goods and Service Tax Sales Tax ExciseDuty Customs Duty and Value Added Tax as applicable which have not been deposited as on31st March 2021 on account of any disputes are as disclosed below:

Name of the Statute/ (Nature of Dues) Period of dues Rs. in lakhs Forum where the dispute is pending
Goods and Service Tax 2017-18 *33.04 High Court
2018-19 *1.55 Assistant Commissioner
*Amounts given above excludes interest

viii. According to the records of the Company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any financial institution or bank or Government or dues todebenture holders.

ix. In our opinion and according to the information and explanationsgiven to us the Company has not raised any moneys by way of term loans initial publicoffer or further public offer (including debt instruments). Consequently reporting underclause (ix) is not applicable.

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.

xi. The Company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicable to it the provisions of Clause 3(xii) of the Order are not applicableto the Company.

xiii. The Company has entered into transactions with related parties incompliance with the provisions of Sections 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the Ind AS financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act.

xiv. According to the information and explanations given to us andbased on our examination of records of the Company the Company had made preferentialallotment of 222220 warrants convertible into equity shares of face value Rs. 10 each ata premium of ^ 350 each during the year 2018-19 of which 105370 warrants have beenconverted during the year into equity shares. The requirements of Section 42 of theCompanies Act 2013 have been complied with by the Company to the extent applicable. Theamount so raised has been utilized during the year towards the purpose for which fundswere raised.

xv. The Company has not entered into any non-cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) ofthe Order are not applicable to the Company.

For P CHANDRASEKAR LLP
Chartered Accountants
FRN 000580S/S200066
S Raghavendhar
Partner
Chennai Membership No. 244016
28th June 2021 UDIN: 21244016AAAADC3715

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