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Kothari Products Ltd.

BSE: 530299 Sector: Others
NSE: KOTHARIPRO ISIN Code: INE823A01017
BSE 00:00 | 27 Jan 110.80 -3.40
(-2.98%)
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114.90

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116.20

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NSE 00:00 | 27 Jan 112.65 -2.05
(-1.79%)
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112.30

HIGH

116.00

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OPEN 114.90
PREVIOUS CLOSE 114.20
VOLUME 510
52-Week high 169.35
52-Week low 75.85
P/E 80.88
Mkt Cap.(Rs cr) 331
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 114.90
CLOSE 114.20
VOLUME 510
52-Week high 169.35
52-Week low 75.85
P/E 80.88
Mkt Cap.(Rs cr) 331
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kothari Products Ltd. (KOTHARIPRO) - Auditors Report

Company auditors report

To

The Members of Kothari Products Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENT

Opinion

We have audited the accompanying standalone financial statements ofKothari Products Limited ("the Company") which comprise the Standalone BalanceSheet as at March 312021 the Standalone Statement of Profit and Loss (including OtherComprehensive income) the Standalone Statement of Changes in Equity and StandaloneStatement of Cash Flows for the year then ended a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "theStandalone 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 312021and Loss (including other comprehensive income) changes in equity and its cash flows forthe year ended on that date.

Basis of Opinion

We conducted our audit of the Standalone Financial Statement inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities 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 ("ICAI") together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the Standalone Financial Statements.

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 of thecurrent period These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and informing our opinion thereon and we do not providea separate opinion on these matters.

We have determined the matters described below to be the key auditmatters

Impact of the COVID-19 Pandemic on the Company's ability to continue asa going concern:

The Company is primarily engaged in exports and its receivablescomprise of debts due from various overseas parties. Thus visa-vis the company the impactof COVID-19 pandemic on recoverability of its receivables and future business prospectson its ability to continue as a going concern required extensive verification proceduresanalysis of the post Balance Sheet events management discussions and judgements.

How our audit addressed the key audit matter

For the matter referred to above our procedures included amongothers verification and recovery pattern of all material export receivables upto the dateof completion of our audit other relevant documentation/correspondence includingcorrespondence with Banks customers on-going/pending export orders and shipments to thevarious parties assessing management's conclusions etc. in view of the laid downaccounting and measurement principles.

Information Other than the Standalone Financial Statements and OurReport thereon

The Company's management and Board of Directors are responsible for thepreparation of the other information. The other information comprises the informationincluded in the Annual report but does not include the Standalone Financial Statementsand our auditor's report thereon. The Annual Report is expected to be made available to usafter the date of this report Our opinion on the Standalone Financial Statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information identified above and in doing soconsider whether the other information is materially inconsistent with the StandaloneFinancial Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to Those Charged withGovernance and take appropriate actions in accordance with Standards on Auditing.

Responsibilities of Management and Those Charged with Governance Forthe Standalone Financial Statements

The Company's management and Board of Directors are responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS and relevant provisions 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 Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management and Boardof Directors are 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 management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial 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:

• 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.

• 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 standalonefinancial statements 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 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 auditors1 report. However future events orconditions may cause the Company to cease to continue as a going concern.

• 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 the misstatement in the StandaloneFinancial Statement that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone FinancialStatement may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and evaluating the results of our work; and(ii)to evaluate the effects of any identified misstatements in the Standalone FinancialStatement.

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 auditors' 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

1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government of India in terms of Section143(11) of the Act we give in "AnnexureA"a statement on the mattersspecified in paragraphs 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 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 have beenkept by the Company so far as it appears from our examination of those books;

c) The Standalone Balance Sheet the Standalone Statement of Profit andLoss (including Other Comprehensive Income) the Standalone Statement of Changes in Equityand the Standalone Statement of Cash Flows dealt with by this Report are in agreement withthe books of account;

d) In our opinion the Standalone Financial Statements comply with theAccounting Standards specified under section 133 of the Act read with relevant rulesissued thereunder and relevant provisions of the Act;

e) On the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof section 164(2)of the Act;

f) With respect to the adequacy of the internal financial controls withreference to Standalone Financial Statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".Our report expresses an unmodified opinion on the adequacy and operating effectivenessof the Company's internal financial controls with reference to Standalone FinancialStatements;

g) 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; and

h) With respect to the other matters to be included in the Auditors'Report 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. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements. Refer note 42 to the StandaloneFinancial Statements;

ii. The Company does not have any long term contracts includingderivative contracts requiring a provision for material foreseeable losses; and

iii. There has been no delay in transferring amounts which arerequired to be transferred to the Investor Education and Protection Fund by the Company.

Annexure A - referred to in paragraph 1 under "Report on OtherLegal and Regulatory Requirements" of our report on even date to the members of theCompany on the Standalone Financial Statements for they ear ended March 312021

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

b. The Company has a regular programme of physical verification of itsproperty plant and equipment; so as to cover all the items over a period of three years.In accordance with this programme property plant and equipment were verified during theyear and no material discrepancies were noticed on such verification; and

c. According to the information and explanations given to us and therecords examined by us and based on the registered sale deeds/transfer deeds etc.evidencing title in immovable properties which are freehold we report that the immovableproperties include in the property plant and equipment/investment properties capitalizedin the books of account of the Company are held in its name.

(ii) a. According to the information explanations and documentsproduced for our verification we report that the inventory of traded goods have beenphysically verified by the management at reasonable intervals during the year at variouslocations and no material discrepancies were noticed on such physical verification.

b. The procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business.

c. The Company has maintained proper records of inventory. According tothe information and explanations given to us and on the basis of our examination ofrecords we are of the opinion that no material discrepancies were noticed on physicalverification and the same have been properly dealt with in the books of accounts.

(iii) a. That as regards the loans to entities covered in the Registermaintained u/s 189 of the Companies Act 2013 ("the Act") it is reported that:

- The Company has granted unsecured loan to its subsidiary andassociates during the year under consideration.

- The total outstanding balance as at the close of the year in respectof such advances was Rs 6528 Lacs (P.Y.: f 26779 Lacs).

- That of the total amount as reported above an amount of Rs 5518 Lacs(P.Y.: Rs 5518 Lacs) represents interest free Joint Venture Deposits made by the Companyin earlier years.

b. In our opinion the rate of interest and other terms and conditionson which the loans have been granted to the body corporates listed in the registermaintained under section 189 of the Act were not prima facie prejudicial to the interestof the Company;

c. According to the information and explanations given to us norepayment schedules have been specified in respect of such loans granted and accordinglythe question of regularity in repayment of principal amount does notarise;

d. There are no overdue amounts in respect of loans granted to the bodycorporates listed in the register maintained under section 189 of the Act; and

e. That as per the information and explanations given to us the JointVenture Deposits are in the nature of strategic advance and there is no stipulation as tothe repayment of the same or servicing of interest on the same.

(iv) In our opinion and according to the information and explanationsgiven us the Company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 in respect of grant of loans making investments and providingguarantees except with respect to interest free Joint Venture Deposit granted by thecompany in earlier years as stated in the paragraph above.

(v) The Company has complied with the directives issued by the ReserveBank of India and the provisions of section 73 to 76 or any other relevant provisions ofthe Act and the rules framed there under to the extent applicable. We are informed bythe management that no order has been passed by the Company Law Board or National CompanyLaw Tribunal or Reserve Bank of India or any court or any other tribunal in this regard.

(vi) In our opinion and according to the information and explanationsgiven to us the Company is not liable for maintenance of cost records u/s 148 of the Act.

(vii) (a) The Company has generally been regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax goods andservices tax cess and other applicable statutory dues with the appropriate authorities.No undisputed statutory dues payable were in arrears as at March 312021 for a period ofmore than six months from the date they became payable; and

(b) The details of dues of income tax sales tax service tax duty ofcustoms duty of excise or value added tax or cess which have not been deposited with theconcerned authorities on account of dispute are given below:

SI. Name of the No. Statue Nature of Dues Amount in Rs Lacs Pending amount Period to which the amount relates Forum where dispute is pending
1. Income Tax Act Income Tax 874.01 - AY 2016-17 CIT(Appeal)
2. Income Tax Act Income Tax 30.04 - AY 2009-10 Income Tax Appellate Tribunal
3. Income Tax Act Income Tax 206.72 - Block Period High Court
4. Income Tax Act Income Tax 65.12 - AY 2001-02 High Court
5. Income Tax Act Income Tax 117.93 - AY 2001-02 High Court
6. Income Tax Act Income Tax 29.12 - AY 2008-09 High Court
7. Income Tax Act TDS Interest and penalty 1.35 1.35 Several years TDS Centralized processing center
8. CentralExcise Act Prosecution of Excise Act Amount unascertainable - - CJM Court
9. C.R.P.C. U/S 482 CR.P.C. Amount unascertainable - - High Court
10. E.P.F Act Provident Fund Due 2.03 2.03 2009-2010 High Court

(viii) The Company has not defaulted in repayment of dues to anyfinancial institutions banks government or debenture holders.

(ix) In our opinion and according to the information and explanationsgiven to us the money raised byway of term loans have been applied for the purposes forwhich they were obtained. As the Company has not raised any moneys byway of initial publicoffer and further public offer (including debt instruments) the provisions of paragraph3(ix) of the Order to that extent are not applicable to the Company;

(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us andbased on 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) In our opinion and according to information and explanation givento us the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable to the Company.

(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) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the standalone financial statements and according toinformation and explanations given by the management 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 applicableto the Company.

(xv) Based on our audit procedures performed for the purpose ofreporting the true and fair view of the standalone financial statements the Company hasnot entered into any non-cash transactions with directors. We have been informed that nosuch transactions have been entered into with person connected with directors.Accordingly paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) The Company is not required to be registered under section 45IAof the Reserve Bank of India Act 1934.

Annexure B - referred to in paragraph 2(f) under "Report on OtherLegal and Regulatory Requirements" of our Independent Auditor's report of even dateto the members of Kothari Products Limited on the Standalone Financial Statements for theyear ended March 312021

Report on the Internal Financial Controls under section 143(3)(i) ofthe Act Opinion

We have audited the internal financial controls with reference to StandaloneFinancial Statements of Kothari Products Limited ("the Company") as of March312021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

In our opinion the Company has in all material aspects an adequateinternal financial controls system with reference to Standalone Financial Statements andsuch internal financial controls with reference to Standalone Financial Statements wereoperating effectively as at March 312021 based on the internal control with referenceStandalone Financial Statements criteria established by the Company considering theessential components of internal control stated in Guidance Note of Audit of InternalFinancial Controls over Financial Reporting ("Guidance Note") issued by theInstitute of Chartered Accountants of India ("ICAI").

Management's Responsibility For Internal Financial Controls withreference to Standalone Financial Statement

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference toStandalone Financial Statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 Act.

Auditor's Responsibility for Internal Financial Controls with referenceto Standalone Financial Statement

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing issued bythe ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to standalone financial statements were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial control system with reference to StandaloneFinancial Statements and their operating effectiveness.

Our audit of internal financial controls with reference to StandaloneFinancial Statements included obtaining an understanding of internal financial controlswith reference to Standalone Financial Statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal controls based on the assessed risk both applicable to an audit of InternalFinancial Controls and both issued by the ICAI.

The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to Standalone Financial Statements.

Meaning Of Internal Financial Controls with reference to StandaloneFinancial Statements

A company's internal financial control with reference to StandaloneFinancial Statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sinternal financial control with reference to financial statements includes those policiesand procedures 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 Standalone Financial Statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to Standalone Financial Statements 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 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.

For Rajiv Mehrotra & Associates For G. M. Kapadia & Co.
Chartered Accountants Chartered Accountants
Firm Registration No. 002253C Firm Registration No.104767W
Anjani Khetarpal Atul Shah
Partner Partner
Membership No - 401701 Membership No.039569
UDIN:21401701AAAABK3109 UDIN-21039569AAAAJY3759
Place: Kanpur Place: Mumbai
Date: June 29 2021 Date: June 29 2021

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