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Kanoria Chemicals & Industries Ltd.

BSE: 506525 Sector: Industrials
NSE: KANORICHEM ISIN Code: INE138C01024
BSE 00:00 | 12 Aug 129.00 -0.80
(-0.62%)
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127.40

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NSE 00:00 | 12 Aug 129.55 1.80
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127.00

HIGH

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OPEN 127.40
PREVIOUS CLOSE 129.80
VOLUME 1338
52-Week high 219.70
52-Week low 99.20
P/E 17.84
Mkt Cap.(Rs cr) 564
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 127.40
CLOSE 129.80
VOLUME 1338
52-Week high 219.70
52-Week low 99.20
P/E 17.84
Mkt Cap.(Rs cr) 564
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kanoria Chemicals & Industries Ltd. (KANORICHEM) - Auditors Report

Company auditors report

To the Members of

KANORIA CHEMICALS & INDUSTRIES LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the accompanying standalone financial statements ofKANORIA CHEMICALS & INDUSTRIES LIMITED ("the Company") which comprises theBalance Sheet as at March 31 2021 the Statement of Profit & Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the 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 2021and its loss (including other comprehensive income) changes in equity and its cash flowsfor the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the 'Auditor's Responsibilities for theAudit of the Standalone Financial Statements' section of our report. We are independent ofthe Company in accordance with the 'Code of Ethics' issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the Act and theRules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.

EMPHASIS OF MATTER

We draw our attention to Note 36 of the standalone financialstatements regarding revenue recognition for sale of Solar Power supplied to Discom basedon the tariff declared by the Rajasthan Electricity Regulatory Commission vide order dated5th March 2019 pending execution of Power Purchase Agreement the execution of which issub-judice. The unbilled revenue towards this for the year is Rs. 23 millions and Rs.23.61 millions for the previous year and the corresponding receivables amounting to Rs.46.61 millions have been included in Trade Receivables. The Company is confident ofrecovery of the same in due course. Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year ended March 31 2021. These matters were addressed in the context of ouraudit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.

We have determined that there are no Key Audit Matters to becommunicated in our Audit Report.

INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS ANDAUDITOR'S REPORT THEREON

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theAnnual Report but does not include standalone financial statements consolidatedfinancial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FORTHE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with therelevant rules as amended. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIALSTATEMENTS

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

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

a. Identify and assess the risks of material misstatement of thestandalone 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.

b. Obtain an understanding of internal control relevant to the audit inorder to 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.

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

d. 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 standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

e. Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the 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.

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.

We also provide those charged with governance with a statement that wehave 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial 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 of about the matter or when in extremely rare circumstances we determine thata matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interests of suchcommunication.

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 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2) As required by section 143(3) of the Act we report that:

i. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief are necessary for the purpose of our audit.

ii. 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.

iii. The Balance Sheet Statement of Profit & Loss (including othercomprehensive income) Statement of Changes in Equity and Statement of Cash Flows dealtwith by this Report are in agreement with the books of account.

iv. In our opinion the aforesaid standalone financial statementscomply with the accounting standards specified under section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended from time to time.

v. On the basis of written representations received from the Directorsas on March 31 2021 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of section164(2) of the Act.

vi. With respect to the adequacy of the internal financial controlswith reference to the standalone financial statement of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".

vii. In our opinion and to the best of our information and according tothe explanations given to us the managerial remuneration paid/provided by the Company toits directors during the year is in accordance with the provisions of section 197 readwith Schedule V to the Act; and

viii. 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 (asamended) in our opinion and to the best of our information and according to theexplanations given to us:

i) Pending litigations (other than those already recognized in theaccounts) having material impact on the financial position of the Company have beendisclosed in the standalone financial statements as required in terms of accountingstandards and provisions of the Companies Act 2013 - refer note 30 of the standalonefinancial statements.

ii) The Company did not have any long-term contracts includingderivative contracts for which there were any 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 except for Rs.1.31 millions which is held in abeyance due to pending legal cases.

For J K V S & CO
Chartered Accountants
Firm Registration No. 318086E
> (AJAY KUMAR) Partner
Place: Kolkata Membership No. 068756
Dated: 28th day of May 2021 UDIN: 21068756AAAAAV2564

ANNEXURE A

TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Kanoria Chemicals & IndustriesLimited of even date)

i. In respect of the Company's fixed assets:

a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant & equipment.

b) The management has physically verified the property plant andequipment of the Company in a phased manner to cover the entire block of assets once in ayear and no material discrepancies were noticed.

c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties of land and buildings are held in the name of the Company as at the balancesheet date.

ii. The inventories have been physically verified during the year bythe management. In our opinion the frequency of verification is reasonable. Thediscrepancies noticed on verification between the physical stock and the book stockwherever ascertained were not significant and have been dealt with in the books ofaccount.

iii. According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or parties covered in the register maintained under section 189 ofthe Act. Accordingly paragraph 3(iii) of the Order is not applicable 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 theAct with respect to the loans & investments made and guarantees provided.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted deposits from public within the meaning ofsection 73 to 76 of the Act and the Rules framed there under to the extent notified.

vi. The Central Government has prescribed maintenance of cost recordsunder section 148(1) of the Act for the Company. We have broadly reviewed such accountsand records and are of the opinion that prime facie the prescribed accounts & recordshave been made & maintained but no detailed examination of such records and accountshave been carried out by us.

vii. According to the information and explanations given to us and onthe basis of our examination of the books of account:

a) The Company has been regular in depositing to the appropriateauthorities undisputed statutory dues including provident fund employee's stateinsurance income tax duty of customs goods & service tax cess and other statutorydues during the year with the appropriate authorities. No undisputed statutory dues asabove were outstanding as at March 31 2021 for a period of more than six months from thedate they became payable.

b) The details of disputed dues of income tax sales tax service taxduty of customs duty of excise value added tax & goods and service tax which havenot been deposited and the forum where the dispute is pending as on March 312021 are asunder :-

Name of the statute Nature of the Dues Amount (Rs. in millions) Period to which the amount relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 56.57 AY 2016-17 & AY 2018-19 Commissioner Income Tax (Appeals) Kolkata
The Indian Stamp Act 1899 Stamp Duty 4.06 2011-12 Rajasthan High Court

viii. According to the records of the Company examined by us and theinformation and explanations provided to us the Company has not defaulted in repayment ofloans or borrowings to any Financial Institutions or Banks or dues to debenture holders.Further as at the Balance sheet date the Company does not have any loans or borrowing fromthe Government.

ix. According to the information and explanation given to us and basedon our overall examination of the books of accounts we report that the company hasapplied the moneys raised by way of term loan for the purposes for which they were raised.Furthermore the company has neither raised moneys through initial public offer northrough further public offer during the year.

x. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us we have neither come acrossany instance of fraud by the Company or any fraud 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. According to the information and explanations given to us and basedon our examination 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. The Company is not a Nidhi company and hence paragraph 3(xii) ofthe Order is not applicable.

xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

xiv. According to the information and explanations give to us and basedon our examination 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. Accordingly paragraph 3(xiv) of the Order is not applicable tothe Company.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is notapplicable to the Company.

For J K V S & CO
Chartered Accountants
Firm Registration No. 318086E
(AJAY KUMAR) Partner
Place: Kolkata Membership No. 068756
Dated: 28th day of May 2021 UDIN: 21068756AAAAAV2564

ANNEXURE B

TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 (vi) under Report on Other Legal andRegulatory Requirements section of our report to the Members of Kanoria Chemicals &Industries Limited of even date)

Report on the Internal Financial Controls with reference to thestandalone financial statement under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")

We have audited the internal financial controls with reference to thestandalone financial statement of Kanoria Chemicals & Industries Limited ("theCompany") as of March 31 2021 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Board of Directors of the company is responsible for establishingand maintaining internal financial controls based on the internal financial control withreference to the standalone financial statement criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting (the "GuidanceNote") issued 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 respective 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

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to the standalone financial statement based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing issued by ICAI and deemed to be prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 the standalone financial statement was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to the standalone financialstatement and their operating effectiveness. Our audit of internal financial controls withreference to the standalone financial statement included obtaining an understanding ofinternal financial controls with reference to the standalone financial statementassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Company's internal financial controls withreference to the standalone financial statement.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE STANDALONEFINANCIAL STATEMENT

A company's internal financial control with reference to the standalonefinancial statement is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial control with reference to the standalone financial statementincludes those policies and procedures that- (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of standalone financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the standalone financial statements.

LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THESTANDALONE FINANCIAL STATEMENT

Because of the inherent limitations of internal financial controls withreference to the standalone financial statement including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to the standalone financial statement to future periods aresubject to the risk that the internal financial control with reference to the standalonefinancial statement may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls with reference to the standalone financial statement and such internalfinancial controls with reference to the standalone financial statement were operatingeffectively as at March 31 2021 based on the internal control with reference to thestandalone financial statement criteria established by the Company considering theessential components of internal control stated in the Guidance Note.

For J K V S & CO
Chartered Accountants
Firm Registration No. 318086E
(AJAY KUMAR) Partner
Place: Kolkata Membership No. 068756
Dated: 28th day of May 2021 UDIN: 21068756AAAAAV2564

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