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National Peroxide Ltd.

BSE: 500298 Sector: Industrials
NSE: NATPEROXID ISIN Code: INE585A01020
BSE 00:00 | 27 Jun 1323.25 -4.75
(-0.36%)
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1358.00

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NSE 05:30 | 01 Jan National Peroxide Ltd
OPEN 1327.40
PREVIOUS CLOSE 1328.00
VOLUME 554
52-Week high 2599.00
52-Week low 1199.95
P/E 2496.70
Mkt Cap.(Rs cr) 761
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1327.40
CLOSE 1328.00
VOLUME 554
52-Week high 2599.00
52-Week low 1199.95
P/E 2496.70
Mkt Cap.(Rs cr) 761
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

National Peroxide Ltd. (NATPEROXID) - Auditors Report

Company auditors report

To the Members of National Peroxide Limited

Report on the audit of the Standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements of NationalPeroxide Limited (“the Company”) which comprise the balance sheet as at March31 2021 and the statement of Profit and Loss (including Other Comprehensive Income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the standalone 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 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 of total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year then ended.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules 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 opinion.

Emphasis of Matter

4. We draw attention to Note 53 to the standalone financial statements which describesthe current environment where several restrictions have been imposed by various stategovernments and local bodies to control the second wave of the Coronavirus (Covid-19)pandemic. Management has carried out a detailed assessment of the financial impact on thebusiness operations of the Company and has concluded that there are no materialadjustments required in the financial statements. However a definitive assessment of theimpact on the subsequent periods is highly dependent upon circumstances as they evolve.Our opinion is not modified in respect of this matter.

Key audit matters

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Key audit matter How our audit addressed the key audit matter
Appropriateness of valuation of Property Plant and Equipment (including Asset held for sale) (Refer note 50 and note 51 to the standalone financial statements): Our procedures included the following:
During the previous year the Company expanded its production capacity from 95 KTPA to 150 KTPA of its plant at Kalyan Maharashtra which resulted in a capitalisation of H 21544.68 lakhs. • Obtained and examined the board approval for decommissioning of assets at site and sale of assets;
In the current year as the plant got fully operational and stabilized the management undertook an exercise to review the plant and machinery which may no longer be usable; or may have to put to an alternate use; CWIP which was held for sale for any further depletion in carrying value. • Understanding and evaluating the controls and testing the operating effectiveness of the control related to identification of redundant assets and sale of the decommissioned assets and estimating the fair value of these assets;
As a result of this exercise assets with written down value of 876.97 lakhs were determined to be redundant H and were decommissioned and disposed off at a loss of H 653.93 lakhs; assets with written down value of H 218.32 lakhs are being evaluated for alternate use resulting in writing them down to 5% of the gross book value with a consequential loss of H 136.72 lakhs; re-assessment of fair value of CWIP disclosed as assets held for sale resulted in a write down of H 173.86 lakhs. • Obtained an understanding with the management in relation to the nature and use of the assets that are decommissioned at site;
These losses/write downs of an amount of H 964.51 lakhs have been disclosed as Exceptional Items in the Statement of Profit and Loss. • Evaluated the physical verification process performed by the management to identify these assets and examined the report for determining the assets decommissioned at site;
Due to the significance of the amounts involved and judgement and estimates involved in determining usability and fair value the matter has been considered to be a Key Audit Matter. • Performed test of details on the assets sold i.e. examining the quotations sales order approval and invoices;
• Evaluated the management assessment and performed test of details relating to the quotations received to determine fair value; • Ensured adequacy of disclosures in the standalone financial statements.
Based on our procedures as mentioned above we did not identify any inconsistency in the management assessment of carrying value of Property Plant and Equipment (including asset held for sale).

Other Information

6. The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the annual report but does notinclude the standalone financial statements and our auditor’s report thereon. Theannual report is expected to be made available to us after the date of this auditor'sreport.

Our opinion on the financial statements does not cover the other information and wewill 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with governance for the financialstatements

7. The Company’s Board of Directors is responsible for the matters stated insection 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 financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; 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.

8. In preparing the standalone financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

9. 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 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 financial statements.

10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism 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 financial statements in place andthe 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 concernbasis 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 theCompany to cease to continue as a going concern.

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

11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese 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

14. As required by the Companies (Auditor’s Report) Order 2016 (“theOrder”) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

15. 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 Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified 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 tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in “Annexure A”.

(g) With respect to the other matters to be included in the Auditor’s 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 financial statements - Refer Note 48 to the standalone financialstatements;

ii. The Company has long-term contracts including derivative contracts as at March 312021 for which there were no 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.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 31 2021.

16. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Asha Ramanathan
Partner
Mumbai Membership Number: 202660
June 29 2021 UDIN: 21202660AAAAAY8337

Annexure A to Independent Auditors’ Report

Referred to in paragraph 15(f) of the Independent Auditors’ Report of even date tothe members of National Peroxide Limited on the standalone financial statements for theyear ended March 31 2021

Report on the Internal Financial Controls with reference to financial statements underClause (i) of Subsection 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financialstatements of National Peroxide Limited (“the Company”) as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaininginternal financial controls 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 (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 safeguardingof its 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.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the “Guidance Note”) and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

5. 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 controlssystem with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; 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 financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control 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

8. 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 financial statements were operating effectively as atMarch 31 2021 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. Also refer paragraph 4 of themain audit report.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Asha Ramanathan
Partner
Mumbai Membership Number: 202660
June 29 2021 UDIN: 21202660AAAAAY8337

Annexure B to Independent Auditors’ Report

Referred to in paragraph 14 of the Independent Auditors’ Report of even date tothe members of National Peroxide Limited on the standalone financial statements as of andfor the year ended March 31 2021

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

(b) The Property Plant and Equipments are physically verified by the Managementaccording to a phased programme designed to cover all the items over a period of two yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the programme a portion of the fixed assets has beenphysically verified by the Management during the year and no material discrepancies havebeen noticed on such verification.

(c) The title deeds of immovable properties as disclosed in Note 4 on Property Plantand Equipment’s to the financial statements are held in the name of the Company.

ii. The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material

iii. The Company has granted unsecured loans to one company covered in the registermaintained under Section 189 of the Act. There are no firms /LLPs/ other parties coveredin the register maintained under Section 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company’s interest.

(b) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated and the party is repaying the principal amountsas stipulated and is also regular in payment of interest as applicable.

(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

iv. The Company has not granted any loans to the parties covered under Section 185 ofthe Companies Act 2013. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 186 of the CompaniesAct 2013 in respect of the loans and investments made and guarantees and securityprovided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of in respect of income tax profession tax andprovident fund though there has been a slight delay in a few cases and is regular indepositing undisputed statutory dues including employees’ state insurance duty ofcustoms cess goods and service tax and other material statutory dues as applicablewith the appropriate authorities. Also refer note 48 to the financial statements regardingmanagement's assessment on certain matters relating to provident fund.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of Goods and service-tax duty of customs dutyof excise which have not been deposited on account of any dispute. The particulars ofdues of income tax sales tax and value added tax as at March 31 2021 which have not beendeposited on account of a dispute are as follows:

Name of the statute Nature of dues Amount (J In lakhs) Period to which the amount relates Forum where the dispute is pending
Maharashtra Value Added Tax Act 2002 Value Added Tax 7.80 FY 2005-06 Joint Commissioner of Sales Tax (Appeal)
Maharashtra Value Added Tax Act 2002 Value Added Tax 479.39* FY 2006-07 Deputy Commissioner of Sales Tax (Appeal)
Central Sales Tax Act 1956 Sales Tax 38.90 FY 2012-13 Joint Commissioner of Sales Tax
Central Sales Tax Act 1956 Sales Tax 1656.58** FY 2006-07 Joint Commissioner of Sales Tax (Appeal)
Income Tax Act 1961 Income Tax 4.58 AY 2013-14 Assistant Commissioner of Income Tax Mumbai
Income Tax Act 1961 Income Tax 101.59 AY 2015-16 Assistant Commissioner of Income Tax Mumbai
Income Tax Act 1961 Income Tax 16.58 AY 2016-17 Assistant Commissioner of Income Tax Mumbai
Income Tax Act 1961 Income Tax 1079.47 AY 2018-19 Commissioner of Income Tax Appeals Mumbai

* net of H 8.33 lakhs paid as deposit ** net of H 59.32 lakhs paid as deposit

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any bank as at the balance sheet date. Further the Company neither has any loans orborrowings from any financial institution or Government nor has it issued any debenturesas at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer and furtherpublic offer (including debt instruments). In our opinion and according to theinformation and explanations given to us the moneys raised by way of term loans have beenapplied on an overall basis for the purposes for which they were obtained.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct. Also refer paragraph 16 of Independent Auditor’s Report.

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

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 Related Party Disclosures specified under Section133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him within the meaning of Section 192 of the Act. Accordingly theprovisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Asha Ramanathan
Partner
Mumbai Membership Number: 202660
June 29 2021 UDIN: 21202660AAAAAY8337

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