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Oriental Carbon & Chemicals Ltd.

BSE: 506579 Sector: Industrials
NSE: OCCL ISIN Code: INE321D01016
BSE 00:00 | 25 Jan 933.35 16.20
(1.77%)
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923.90

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941.80

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923.90

NSE 00:00 | 25 Jan 933.20 14.05
(1.53%)
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919.60

HIGH

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OPEN 923.90
PREVIOUS CLOSE 917.15
VOLUME 215
52-Week high 1321.00
52-Week low 830.05
P/E 11.92
Mkt Cap.(Rs cr) 932
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 923.90
CLOSE 917.15
VOLUME 215
52-Week high 1321.00
52-Week low 830.05
P/E 11.92
Mkt Cap.(Rs cr) 932
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Oriental Carbon & Chemicals Ltd. (OCCL) - Auditors Report

Company auditors report

To

The Members

Oriental Carbon & Chemicals Limited

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Oriental Carbon& Chemicals Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss (including Other Comprehensive Loss) theStatement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "standalonefinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standard prescribed under section133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities 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 the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made 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 audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to note no. 33(c) on the statement which describes the uncertaintiesand the impact of Covid-19 pandemic on the Company’s operations and results asassessed by the management.

Our opinion on these standalone financials is not modified in respect of the matter.

Key Audit Matters

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 standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Auditor’s Response
1 The Company recognizes revenue on satisfaction of performance obligations upon transfer of control of promised products to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products. 1. We performed walkthroughs to understand the adequacy and the design of the revenue cycle for all significant components. We tested controls in the revenue and trade account receivables cycles over the accuracy and timing of revenue accounted in the financial statements.
In determining the transaction price for the sale the Company considers the effects of variable consideration and consideration receivable from the customer. At 31st March 2021 the Company’s statement of profit and loss included Sales of H32972.01 Lakh. The nature of rebates and sales returns if any involve judgment in determining sales revenues and revenue cut-o_. The risk is therefore that revenue may not be recognised in the correct period or that revenue and associated profit is misstated. 2. We checked the contracts of customers along with revenue recognition policy applied by the Company to ensure satisfaction of performance obligation upon transfer of control of products to customer at a point in time. Our checking procedure includes consideration of the accounting and presentation of the rebates and discount arrangements
Refer to Accounting policies Note 1(III)(h) and Note No. 15 of the standalone Financial Statements. 3. In addition to substantive analytical reviews performed to understand how the revenue has trended over the year we performed a detailed testing on transactions around the year-end ensuring revenues were recognised in the correct accounting period. We also tested journal entries recognised to revenue focusing on unusual or irregular transactions.
4. We validated the appropriateness and completeness of the related disclosures in Note No. 15 of the financial statements

Information Other than the Standalone Financial Statements and Auditor’s ReportThereon

The Company’s Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board’s Report including Annexures to Board’s ReportBusiness Responsibility Report Corporate Governance and Shareholder’s Informationbut does not include the standalone financial statements and our auditor’s reportthereon.

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

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

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibility of Management and Those Charged with Governance for the StandaloneFinancial Statements.

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive loss changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including Ind AS. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities selection and application of appropriateaccounting policies making judgments and estimates that are reasonable and prudent anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing 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. The Board of Directors areresponsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an 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 standalone financial statements.

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

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

• Obtain an understanding of internal financial controls 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.

• 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 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 conditionsmay cause the Company to cease to continue as a going concern.

• Evaluatetheoverallpresentationstructureandcontent of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the standalone financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor’s reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" 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 explanations which to the bestof our knowledge and belief were necessary for the purpose 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 comprehensiveloss) the Statement of Cash Flow and Statement of Change in Equity dealt with by thisreport are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone financial statements comply with theIndian Accounting Standards specified under section 133 of the Act read with relevantrule issued thereunder.

(e) On the basis of written representations received from the directors as on March 312021 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2021 from being appointed as a director in terms of subsection 2 of section164 of the Act.

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

(g) With respect to the adequacy of the internal financial controls with reference tothe financial statement of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B". and

(h) 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 Standalone financial statements – Refer Note 29 to the standalonefinancial statements.

ii. The Company has made adequate provision as required under the law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.

iii. There has been no delay in transferring amount required to be transferred to theInvestor Education and Protection Fund by the Company.

For S S KOTHARI MEHTA & COMPANY

Chartered Accountants

Firm Registration Number: 000756N

NAVEEN AGGARWAL

Partner

Membership Number: 094380

UDIN 21094380AAAAEU2640

Place: Noida

Date: June 18 2021

"Annexure A" to the Independent Auditors’ Report

The Annexure as referred in paragraph (1) ‘Report on Other Legal and RegulatoryRequirements of our Independent Auditors’ Report to the members of Oriental Carbon& Chemicals Limited on the standalone financial statements for the year ended March31 2021 we report that: i.

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

(b) Management has made a programme of periodical verification of fixed assets inphased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its Fixed Assets. The discrepancies if any noticed on suchphysical verification have been properly dealt with in the books of accounts.

(c) The title deeds of immovable properties are held in the name of the Company exceptin the following case:

Particular No. of Cases Gross Book Value Net Book Value
H ( In Lakh) ( Rs. in Lakh)
Building * 1 2946.70 2746.03

*Also refer Note No. 2(ii)

ii. The inventory has been physically verified except stock lying with third parties bythe management at reasonable interval during the year. As far as we could ascertain andaccordingly to the information and explanations given to us no material discrepancieswere noticed between the physical stock and book records.

iii. The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnership Firms or other parties covered in the registered maintainedunder section 189 of the Companies Act 2013 (‘the Act’). Accordingly theprovisions of clause 3(iii)(a) to (c) of the Order are not applicable to the Company.

iv. According to the information and explanations given to us the Company has compliedwith the provisions of section 185 and section 186 of the Companies Act 2013 with respectto the loans investments guarantees and security provided.

v. The Company has complied with the directives issued by the Reserve Bank of India andthe provisions of the section 73 to 76 of the Companies Act 2013 and the rules framedthereunder as applicable. We are informed by the management that no order has been passedby the Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyother authority.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the Central Government of India for the maintenance of costrecords under sub-section 1 of Section 148 of the Companies Act 2013 in respect of themanufacture of Insoluble Sulphur and chemicals and are of the opinion that prima faciethe prescribed records and accounts have been made and maintained. However we have notcarried out a detailed examination of such records with a view to determining whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company is generally regular in depositingundisputed statutory dues including provident fund employees’ state insuranceincome tax Goods and Service Tax custom duty Cess and other material statutory dueswith the appropriate authorities to the extent applicable and further there are noundisputed statutory dues payable for a period of more than six months from the date theybecome payable as at March 31 2021.

(b) According to the records and information and explanations given to us there are nodues in respect of income tax sales tax service tax duty of excise duty of customvalue added tax or Goods and Service Tax which have not been deposited on account of anydispute except as given below:

Name of Statute Nature of Dues Period (Assessment Year) Amount H ( in Lakh) Forum where dispute pending
Gujrat Value Added Tax Act 2003 VAT 2015-16 2.10 Deputy Commi- ssioner of State Tax

viii. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loan orborrowing to any banks or Financial Institutions. The Company has not obtained any loansfrom government and no dues is outstanding to debenture holders.

ix. According to the information and explanation given to us the Company has notraised moneys by way of initial public offer (IPO) or further public offer (including debtinstruments) during the year. The term loans were applied for the purposes for which theyare raised.

x. During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India we have neithercome across any instance of fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of such case bythe management.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the record of the Company transactions with the related parties are incompliance with provision of section 177 & 188 of the Act where applicable and detailsof such transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause 3(xiv) of the Order is not applicable.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause 3(xv) ofthe Order is not applicable.

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

For S S KOTHARI MEHTA & COMPANY

Chartered Accountants

Firm Registration Number: 000756N

NAVEEN AGGARWAL

Partner

Membership Number: 094380

UDIN 21094380AAAAEU2640

Place: Noida

Date: June 18 2021

"Annexure B" to the Independent Auditor’s Report of even date on theStandalone Financial Statements of Oriental Carbon & Chemicals Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 2(f) of‘Report on Other Legal and Regulatory Requirements’

We have audited the internal financial controls with reference to financial statementsof Oriental Carbon & Chemicals Limited ("the Company") as of March 31 2021in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management’s Responsibility for Internal Financial Controls

TheCompany’smanagementisresponsibleforestablishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria 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 Companies Act 2013.

Auditors’ Responsibility

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 Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system with reference to financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto financial 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. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany’s internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A Company’s internal financial control 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 controlwith 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 havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements

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 with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2021 based on the internal control with reference to financial statementscriteria 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 S S KOTHARI MEHTA & COMPANY

Chartered Accountants

Firm Registration Number: 000756N

NAVEEN AGGARWAL

Partner

Membership Number: 094380

UDIN 21094380AAAAEU2640

Place: Noida

Date: June 18 2021

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