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N K Industries Ltd.

BSE: 519494 Sector: Industrials
NSE: NKIND ISIN Code: INE542C01019
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OPEN 37.80
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VOLUME 501
52-Week high 47.50
52-Week low 29.15
P/E
Mkt Cap.(Rs cr) 25
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

N K Industries Ltd. (NKIND) - Auditors Report

Company auditors report

To the Members of N.K. INDUSTRIES LIMITED

Report on the Audit of the Standalone IND AS Financial Statements

Qualified Opinion

We have audited the accompanying standalone Ind AS financial statements of M/sN.K.INDUSTRIES LIMITED (''the Company") which comprise the standalone balance sheetas at March 312021 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone Ind AS financialstatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion Section of our report the aforesaid standalone Ind AS financial statements givethe information required by the Companies Act 2013 (the Act) in the manner so requiredand 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 (financial Position )of the Company asat March 31 2021 and its losses (financial performance including other comprehensiveincome) its Cash flows and changes in equity for the year ended on that date.

Basis for Qualified Opinion

1. The Company had entered into financial arrangement with National Spot Exchange Ltd(NSEL) through trading and Clearing Member N.K. Proteins Private Ltd (erstwhile N. K.Proteins Limited (NKPL) (Group Company) by way of purchase and sales of various goods upto financial year 2012-13. The trade payables and trade receivables arising out of thesaid transactions through National Spot Exchange Limited (NSEL) from the concerns otherthan the group concerns are subject to confirmations by the respective parties/NSEL andreconciliations/adjustments if any. Further NSEL has suspended the trading on31.07.2013 as per the directions issued by the Government of India Ministry of ConsumerAffairs. NSEL has initiated recovery proceedings against the group company NKPL and alsoagainst the company by filing a civil suit in the Hon'ble High Court of Mumbai for analleged amount of around '937 crores plus interest .and the said proceedings are pendingas on date. Further the Home department Government of Maharashtra has issued anotification under the Maharashtra Protection of Interest of Depositors (in financialestablishments)-Act 1999 (MPID Act) attaching the Land Building & Plant &Machinery of the company located at Kadi Gujarat. The company had challenged thenotification issued by Home department of Maharashtra before Hon'ble Gujarat High Courtwhich was disposed off vide its order dated 29th March 2017. The company preferred aSpecial Leave Petition before the Hon'ble Supreme Court of India against the order ofHon'ble Gujarat High Court. The Hon'ble Supreme Court of India had disposed off theSpecial Leave Petition on 17th April 2017 with a observation to file an applicationbefore Hon'ble Bombay High Court Mumbai and as informed by the management the companyhas filed petition before the Hon'ble Bombay High Court in June 2017 which is pending.Besides the above the company has also filed its objections against the attachmentnotification before the Designated Special MPID Court Mumbai.

In view of the above and the matter is subjudice and the alleged liability /claim arenot accepted by the company we are unable to quantify the final liability and its impactif any on the loss of the company for the Year ended on 31st March 2021.(Refer note No35 of Standalone Ind AS financial statements)

2. The Directorate of Enforcement Government of India has initiated proceedingsagainst the company under section 5(1) of the prevention of Money Laundering Act 2002along with group company NKPL and by virtue of the provisional attachment order dated10/03/2015 attached the assets of the company comprising of Land building plant andmachinery situated at Survey Nos.719 720 721 732/1 732/2 733 741 743 744 745Kadi Thol Road Village Kadi Kasba taluka- Kadi District Mehsana-382715 Gujarat. Asexplained to us The Company has preferred an appeal before the Hon'ble Appellate Tribunalunder the Prevention of Money laundering Act 2002 against the order of AdjudicatingAuthority.

Further. The Director of Enforcement (hereinafter referred to as ED) Government ofIndia had initiated proceedings of search/seizure on 30.05.2018 on the group company NKPLthe promoters of the company late Shri Nilesh Patel and Shri Nimish Patel one of thefamily member as well as on the company and thereafter on 29.06.2018 the ED Governmentof India had preferred an application u/s 17(4) of the Prevention of Money LaunderingAct 2002 before the Adjudicating Authority New Delhi vide it's Application No. OA/236of 2018 against the company as well as group company NKPL and the promoters for retentionof the seized properties and for continuation of order of freezing the properties tillfinalization of the proceedings of the properties mentioned in the application u/s 17(4)of the PMLA Act 2002. The company along with Group Company and promoters challenged theshow cause notice issued by the adjudicating authority New Delhi before the Hon'ble HighCourt of Delhi and the Hon'ble High Court has set aside the said show cause notice. TheDirector of Enforcement has attached assets of the company group company NKPL and thepromoters of the company by issuing a fresh show cause notice dated 30/08/2018 and thecompany has filed an appeal before PMLA Appellate Tribunal Delhi .

In view of the above and also the matter is subjudice and the alleged liabilities/claims are not accepted by the company we are unable to quantify the final liability andits impact if any on the loss of the company for the Year ended on 31st March 2021.(Refer note No 36 of Standalone Ind AS financial statements).

3. The Government of Maharashtra (at the instance of Economic wing offence Mumbai)has filed supplementary Charge sheet dated 25th December 2018 under the various sectionsof IPC AND MPID Act. against the company and its chairman Shri Nimish Patel. Further MPIDCourt on the basis of above supplementary charge sheet has issued summons dated 19thMarch2019 against the company asking them to remain present on 26th April 2019.TheCompany has complied with the said summons and the matter was adjourned to 7thNovember2019 and further adjourned to 15th February2020 7th March2020 30th April 202021st May2020 18thJuly20208th September 2020 9th October 202010th December20206thFebruary20215th May2021 and now the matter is further adjourned to 5th July2021. Thusin view of the fact that the said criminal proceedings which have been initiated interalia against the company and its Chairman Shri Nimish Patel are pendingwe are unable toascertain/quantify the final liability if any that may arise from the said criminalproceedings and therefore we are unable to quantify its impact if any on the loss of thecompany for the Year ended on 31st March 2021. (Refer note No 37 of Standalone Ind ASfinancial statements)

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone Ind ASFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on the standalone financial statements.

Material Uncertainty Related to Going Concern

1. We draw attention to Note 32 to the Standalone Ind AS Financial Statements andaccording to the same the company is having accumulated losses (after taking into accountthe balance of reserves) of Rs 343.99 crores as at 31.03.2021 and the net worth of thecompany is negative However as per the business plan and future cash flow projectionssubmitted by the management to us and accepted by us. The Company is making sincereefforts for the revival of the Business & the management is confident to recover thelosses through improved profitability in foreseeable future. Therefore no provision forthe impairment has been made and accounts for the year have been prepared on "goingconcern basis." Further the above projections also contains business plan/ projectedcash flow prepared by the management and accepted by us with respect to the subsidiariescompany i.e Banpal Oil Chem Private limited and NK OIL Mills Private limited (ExceptTirupati Retail India Pvt ltd where proper provision of Impairment has been done) themanagement is confident to also revive the operations of the loss making these twosubsidiary companies hence no provision for impairment in the fair value of theinvestment made in the said subsidiary companies has been made in the books of accounts ofthe company.

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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Key Audit Matter:

Description of Key audit Matter Our response and results
Litigations and claims (Refer note 27) to the standalone Ind AS financial statements) Our audit procedures inter alia included following:
The cases are pending with multiple tax authorities like Income Tax Sales tax etc. and there are claims against the company which have not been acknowledged as debt by the company. - Discussed disputed litigation matters with the company's management.
In normal course of business financial exposures may arise from pending proceedings and from claims of the customers not acknowledged as debt by the company. Whether a claim needs to be recognized as liability or disclosed as contingent liability in the standalone Ind AS financial statements is dependent on a number of significant assumptions and judgments. The amounts involved are potentially significant and determining the amount if any to be recognised or disclosed in the standalone Ind AS financial statements is inherently subjective. -Evaluated the management's judgment of tax risks estimates of tax exposures other claims and contingencies. Past and current experience with the tax authorities and management's correspondence/response including on the claims lodged by customers were used to assess the appropriateness of management's best estimate of the most likely outcome of each uncertain contingent liability.
We have considered Litigations and claims a Key Audit Matter as it requires significant management judgement including accounting estimates that involves high estimation uncertainty. - Critically assessed the entity's assumptions and estimates in respect of claims included in the contingent liabilities disclosed in the financial statements. Also assessed the probability of negative result of litigation and the reliability of estimates of related obligations.
Conclusion:
Based on the procedures described above we did not find any material exceptions to the management's assertions and treatment presentation & disclosure of the subject matter in the standalone Ind AS financial statements.

Emphasis of Matter

1. We draw attention to Note 32 to the Standalone Ind AS Financial Statements andaccording to the same the company is having accumulated losses (after taking intoaccount the balance of reserves) of Rs 343.99 crores as at 31.03.2021 and the net worth ofthe company is negative However as per the business plan and future cash flow projectionssubmitted by the management to us and accepted by us. The Company is making sincereefforts for the revival of the Business & the management is confident to recover thelosses through improved profitability in foreseeable future. Therefore no provision forthe impairment has been made and accounts for the year have been prepared on "goingconcern basis." Further the above projections also contains business plan/ projectedcash flow prepared by the management and accepted by us with respect to the subsidiariescompany i.e Banpal Oil Chem Private limited and NK OIL Mills Private limited ( ExceptTirupati Retail India Pvt ltd where proper provision of Impairment has been done themanagement is confident to also revive the operations of the loss making these twosubsidiary companies hence no provision for impairment in the fair value of theinvestment made in the said subsidiary companies has been made in the books of accounts ofthe company .

2. Attention is invited to note 38 of the Standalone Ind AS Financial Statements whichstates that the Income Tax Department had carried out survey u/s 133 of the Income taxAct 1961(the IT Act) on the company along with other group companies during FY 2013-14and had ordered a special audit of the books of the company u/s 142(2A) of the IT Act1961 for AY 2011-12 & A.Y 12-13. The department had raised a demand of Rs 131.22Crores (Rs 6.63 Crores for A.Y 10-11 Rs55.43 crores for A.Y 11-12 Rs 60.33 Crores forA.Y 12-13 Rs 7.97 Crores for A.Y 2013-14 & '0.86 Crores for A.Y2014-15) on thecompany for the aforesaid assessment years and the said demand has been disputed by thecompany and the company has initiated appellate proceedings before appropriateauthorities. The said amount has been shown as contingent liability under Note No. 27 ofthe notes forming part of standalone financial statements. Further Income tax departmenthas passed an attachment order on 22.04.2015 & 14.08.15 by which it has attachedproperties of the company in pursuant to a demand the details of the properties attachedwhich are in the name of company is as under:

• 803 Manas Complex Opp Star Bazaar Nr Jodhpur Cross road Satellite Ahmedabad380015.

• 603 Manas Complex Opp Star Bazaar Nr Jodhpur Cross road Satellite Ahmedabad380015.

• Land situated at Survey Nos.719 720 721 732/1 732/2 733 741 743 744745 Kadi Thol Road Village Kadi Kasba taluka- Kadi District Mehsana-382715.

• Factory Building Situated at survey No 745 Kadi Thol Road Village Kadi Kasba taluka- Kadi District Mehsana-382715

• Factory Building Situated at survey No 745 Kadi Thol Road Village Kadi Kasba taluka- Kadi District Mehsana-382715

3. Attention is invited to note 29 of the Standalone Ind AS Financial Statements andaccording to which a Search & Seizure action U/S 132 of the Income Tax Act took placeon 24.2.99. The Income Tax department had raised demand of ' 33.12 Crores vide the blockassessment Order dt. 30.4.2001. In case of the company the Hon'ble Income Tax AppellateTribunal ( ITAT) Ahmedabad has subsequently given partial relief to the extent of ' 28.84Crores. The company had preferred an appeal before the Hon'ble High Court of Gujaratagainst the order of Hon'ble ITAT Ahmedabad. The Hon'ble Gujarat High Court vide itsorder dated 20th June2016 had given partial relief on some of the grounds and had alsodismissed some of the grounds of the company. Against the grounds dismissed by Hon'bleHigh Court of Gujarat the company had further preferred an appeal before Hon'ble SupremeCourt of India and the Hon'ble Supreme Court of India vide order dated 16th January2017had dismissed the appeal of the Company. The Company had already provided an amount of Rs2.88 Crore against the grounds dismissed by Hon'ble ITAT Ahmedabad during F.Y 2002-03 aswell as Rs 1.27 Crores was provided in the books of accounts for the Assessment year inquestion for the interest payable up to 31-03-2005 during F.Y 2004-05. However in view ofthe management and on the basis of the Judgment of the Hon'ble Gujarat High Court theamount provided/paid by the company towards total demand shall result in refund to thecompany. Pending effect of the various orders of adjudicating authorities by the IncomeTax Department the Company is yet to provide final entries in its books of accounts evenduring the year under review. In view of non availability of order of the appeal effectsfrom the Income Tax Department we are unable to opine on the same.

4. Attention is invited to note 40 of the Standalone Ind AS Financial Statements andaccording to which the Sales Tax Department has completed the assessment proceedings forvarious assessment years and raised demand of ' 3314.22 lakhs (net of recovery) for theearlier financial years. The company has not made any provision for the above demandraised by the sales tax authority in its books of accounts as in view of the Managementthe said demand shall not withstand before the Appellate Authorities and the company hasalready preferred an appeal before the appellate authority which is still pending. In viewof the above the said amount has been shown as contingent liability under Note No. 27 ofthe notes forming part of standalone financial statements.

5. Attention is invited to Note 44 of the Standalone Ind AS Financial Statements whichstates that the balance confirmation from the suppliers customers as well as to variousloans or advances capital advances given and certain banks have been called for by thecompany but the same are awaited till the date of audit. Thus the balances ofreceivables capital advancestrade payables as well as loans and advances and certainbank balances have been taken as per the books of accounts submitted by the company andare subject to confirmation from the respective parties.

6. As per the information obtained from the website of the Ministry of CorporateAffairs (MCA) a suit has been filed against the company and its officers u/s 383A(1A)372A(9) 58A(6)(A)(I) of the Companies Act 1956 for the year 2016. As informed by themanagement the company is having basic information about such suit filed as reflected onthe website of the MCA. However the company does not have any communication of suchproceedings against the company and its officers. As the matter is still subjudice we areunable to quantify the final liability and its impact if any on the company and itsofficers. (Refer Note No 41 of the standalone Ind AS financial statements)

Our opinion is not modified on the above matters.

Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS Financial 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 Ind AS financialstatements that give a true and fair view of the state of affairs (financialposition)Profit or loss(financial performance including other comprehensive income)changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards ('IndAS') specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding 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 Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing 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 Ind AS financial statements

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

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial 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 system in place and the operating effectiveness ofsuch 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 concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone Ind AS financial statement or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS 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 public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by section 197(16) of the Act we report that the company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with schedule V to the Act. The remuneration paidto any director is not in excess of the limit laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

2. 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 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

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

a. We have sought and except for the matters described in the Basis for Qualifiedopinion obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purposes of our audit

b. Except for the possible effects of the matter described in the Basis for Qualifiedopinion paragraph above In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books

c. The standalone Balance Sheet the standalone Statement of Profit and Loss includingother Comprehensive Income standalone Statement of Changes in Equity and the standaloneStatement of Cash Flow dealt with by this Report are in agreement with the books ofaccount.

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under section 133 of the Act.

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 Section 164(2) of theAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".Our report express an unmodified opinion on theadequacy and operating effectiveness of the company's internal financial control overfinancial reporting.

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 2014as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in the standalone Ind AS Financial Statements ( Refer Note No 27 to theStandalone Ind AS Financial Statements.)

ii The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For Parikh & Majmudar
Chartered Accountants
FR No. 107525W
[C.A (Dr) Hiten M. Parikh]
PARTNER
Place: Ahmedabad Membership No. 40230
Date:07-06-2021 UDIN: 21040230AAAAGG2464

ANNEXURE A -TO THE INDEPENDENT AUDIT REPORT OF EVEN DATE TO THE MEMBERS OFN.K.INDUSTRIES LIMITED ON THE STANDALONE IND AS FINANCIAL STATEMENTS FOR THE YEAR ENDED31ST MARCH 2021

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant & Equipment with effect from 1stApril 2008 onwards.

(b) According to the information and explanations given to us the Property Plant& Equipment are verified by the management during the year in a phased periodicalmanner which in our opinion is reasonable having regard to the size of the Company andnature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us and the records examinedby us and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising of the immovable properties of land and building which arefreehold are held in the name of the company as at the balance sheet date except thefollowing properties whose titles have not been still conveyed in the name of the companyhaving total carrying value of ' 18.86 lakhs as at 31st March2021.

(Rs. In lakhs)
Sr. No. Description of the property Status of ownership Carrying value
1. Premises located at Thirthjal Complex Ahmedabad Title of the property is in the name of the director and yet not conveyed in the name of the company. As stated by the management as the cooperative society in which the property is held does not allow the company to hold the assets in its name. 5.38
2. Land situated at Sr. No. 719 Vil kadi Taluka Kadi Dist. Mehsana in the State of Gujarat In the subject land Registered power of attorney of the land in question is in the name of Shri Ashwin Patel CFO on behalf of the company and necessary stamp duty has been fully paid yet titles are to be conveyed in the name of the company. 5.49
3. Land situated at Sr. No. 720 Vil kadi. Taluka Kadi Dist. Mehsana in the State of Gujarat Unregistered Agreement to sale in the name of the company. Competent authority has ordered for payment of premium which is yet to be paid. Titles are not conveyed in the name of the company. 1.85
4. Land situated at Sr. No. 721 Vil kadi. Taluka Kadi Dist. Mehsana in the State of Gujarat In the subject land Registered power of attorney of the land in question is in the name of Shri Ashwin Patel CFO on behalf of the company and necessary stamp duty has been fully paid yet titles are to be conveyed in the name of the company. 3.19
5. Land situated at Sr. No. 741 Vil kadi. Taluka Kadi Dist. Mehsana in the State of Gujarat In the subject land no agreement entered with the company. However unregistered power of attorney is in the name of Mr Kamlesh Patel on behalf of the company. The titles have not been conveyed in the name of the company. 2.93
6. Land situated at Sr. No. 742 Vil kadi. Taluka Kadi Dist. Mehsana in the State of Gujarat In the subject land no agreement entered with the company. However unregistered power of attorney is in the name of Mr Kamlesh Patel on behalf of the company. The titles have not been conveyed in the name of the company.

(ii) As explained to us the inventories have been physically verified by themanagement at reasonable intervals during the year. The discrepancies noticed onverification between physical stocks and the books of accounts are not material.

(iii) During the year the company has granted unsecured loans to Companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. (the Act).

a) During the year the Company has granted interest bearing unsecured loan to twosubsidiary companies covered in the register maintained u/s 189 of the CompaniesAct2013(the Act). The terms of arrangements do not stipulate any repayment schedule andthe loan is repayable on demand. Accordingly paragraph 3(iii)(b) of the Order is notapplicable to the company in respect of repayment of the principal amount. The unsecuredloan granted to one

of the subsidiary during the earlier financial years covered in the register theregister maintained u/s 189 of the Companies Act 2013 is interest free. The terms ofarrangements do not stipulate any repayment schedule and the loan is repayable on demand.Accordingly paragraph 3(iii)(b) of the Order is not applicable to the company in respectof repayment of the principal amount.

b) In respect of the said loans there are no overdue amounts

(iv) On the basis of Information and explanations given to us and also In view of thelegal opinion obtained from an expert the company has broadly complied with theprovisions of Section 185 and 186 with respect to the investment made & LoansGiven.(Please refer the note no.30b of the notes forming parts of the financialstatements).

(v) The Company has not accepted any deposits from the public during the year underreview.

(vi) We have broadly reviewed the books of accounts maintained by the company inrespect of products where pursuance to the rules made by the Central Government of Indiathe maintenance of Cost records has been prescribed under sub section (1) of section 148of Companies Act 2013 and we are of the opinion that prima facie the prescribed accounts& records have been maintained. We have however not made a detailed examination ofthe records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund ESICincome-tax Goods & Service tax duty of customs cess and other material statutorydues have been generally regularly deposited during the year by the Company with theappropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund ESIC income tax Goods & Service tax duty ofcustoms cess and other material statutory dues were in arrears as at 31 March 2021 for aperiod of more than six months from the date they became payable.

b) According to the information and explanations given to us there are no materialdues of Goods & Service Tax and duty of customs which have not been deposited with theappropriate authorities on account of any dispute. However according to the informationand explanations given to us the following dues of income tax sales tax & valueadded tax have not been deposited by the company on account of disputes.

Name of the statue Nature of Dues Amount (Rs. in lakhs) (Net of payment) Financial year to which the amount relates From where the dispute is pending
Income Tax Act1961 Corporate Tax 663.83 FY 2009-10 Commissioner of Income Tax(Appeals) -IX
Income Tax Act1961 Corporate Tax 5543.00 FY 2010-11 Income Tax Appellate Tribunal Ahmedabad
Income Tax Act1961 Corporate Tax 6033.00 FY 2011-12 Income Tax Appellate Tribunal Ahmedabad
Income Tax Act1961 Corporate Tax 797.60 FY 2012-13 Commissioner of Income Tax(Appeals) -IX
Income Tax Act1961 Corporate Tax 86.00 FY 2013-14 Commissioner of Income Tax(Appeals) -IX
Income Tax Act1961 Corporate Tax (Penalty) 2625.03 FY 2010-11 Commissioner of Income Tax(Appeals) -IX
Guj. Sales Tax Sales Tax 130.88 F.Y 2008-09 Joint. Commissioner of Commercial Tax Appeal-I Ahmedabad
Guj. Sales Tax Sales Tax 3314.22 F.Y 1990-91 1997-98 to 2001-02 & 2006-07 Sales Tax Tribunal/Commercial Tax Officer
Guj. Sales Tax Sales Tax 3080.51 FY 2013-14 Joint. Commissioner of Commercial Tax Appeal-I

(viii) According to information & explanations given to us The company does nothave any borrowings from Banks Financial institutions Government or debenture holdersduring the year Accordingly paragraph 3 (viii) of the Order is not applicable.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

(xi) According to the information and explanations give 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 paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable 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 paragraph 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 paragraph 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.

For Parikh & Majmudar
Chartered Accountants
FR No. 107525W
[C.A (Dr) Hiten M. Parikh]
PARTNER
Place: Ahmedabad Membership No. 40230
Date:07-06-2021 UDIN: 21040230AAAAGG2464

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF N.K.INDUSTRIES LIMITED

ON THE STANDALONE IND AS FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31ST MARCH 2021

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

In conjunction with our audit of the standalone Ind AS financial statements of M/s N.K.INDUSTRIES LIMITED ("the Company") as at and for the year ended 31st March 2021We have audited the internal financial controls over financial reporting of the company asof that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors 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 the company's business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor's' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsover financial reporting and the Guidance Note issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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 controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that 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 financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

For Parikh & Majmudar
Chartered Accountants
FR No. 107525W
[C.A (Dr) Hiten M. Parikh]
PARTNER
Place: Ahmedabad Membership No. 40230
Date:07-06-2021 UDIN: 21040230AAAAGG2464

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