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NACL Industries Ltd.

BSE: 524709 Sector: Agri and agri inputs
NSE: NACLIND ISIN Code: INE295D01020
BSE 00:00 | 28 Jan 95.20 2.10
(2.26%)
OPEN

95.90

HIGH

99.05

LOW

94.00

NSE 00:00 | 28 Jan 95.20 2.15
(2.31%)
OPEN

94.80

HIGH

99.30

LOW

93.40

OPEN 95.90
PREVIOUS CLOSE 93.10
VOLUME 44429
52-Week high 104.65
52-Week low 35.30
P/E 28.67
Mkt Cap.(Rs cr) 1,888
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 95.90
CLOSE 93.10
VOLUME 44429
52-Week high 104.65
52-Week low 35.30
P/E 28.67
Mkt Cap.(Rs cr) 1,888
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NACL Industries Ltd. (NACLIND) - Auditors Report

Company auditors report

To The Members of NACL Industries Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of NACL IndustriesLimited ("the Company") which comprise the Balance Sheet as at March 312021 and the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information. In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

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'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.

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
Timing of revenue recognition Principal audit procedures performed:
The Company recognises revenue from sale of farm inputs based on the terms and conditions of transactions which varies with different customers. • We obtained an understanding of the revenue recognition process including a sample of sales contracts.
For sale transactions occurring close to the year end it is essential to ensure that the control of goods have transferred to the customers. • We tested the Company's key controls around the timely and accurate recording of the sales transactions.
As revenue recognition is subject to management's judgement on whether the control of the goods have been transferred we considered the risk of such sales transactions recorded in wrong financial period (cut- off) as a key audit matter.c • We tested the access and change management controls of the relevant information technology system in which shipments are recorded.
• We performed testing for a sample of sales invoices recorded immediately before the year-end and obtained evidences to support the appropriate timing of revenue recognition based on terms and conditions set out in sales contracts and delivery documents.
Refer notes 2.3 and 22 of the standalone financial statements.

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 Director's Report and ManagementDiscussion & Analysis but does not include the standalone financial statements andour auditor's report thereon. The Director's Report and Management Discussion &Analysis are expected to be made available to us after the date of this auditor's report.Our opinion on the standalone financial statements does not cover the other informationand will not express any form of assurance conclusion thereon In connection with our auditof the standalone financial statements our responsibility is to read the otherinformation identified above when it becomes available and in doing so consider whetherthe other information is materially inconsistent with the standalone financial statementsor our knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. When we read the Director's Report and Management Discussion &Analysis if we conclude that there is a material misstatement therein we are required tocommunicate the matter to those charged with governance as required under SA 720 ‘TheAuditor's responsibilities Relating to Other Information'.

Management's Responsibility for the Standalone 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 financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. 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 financialstatement 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 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 foroverseeing 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism 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 control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the 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 financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Cash Flow Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account. d)In our opinion the aforesaid standalone financial statements comply with the IndASspecified under Section 133 of the Act. e) On the basis of the written representationsreceived from the directors as on March 31 2021 taken on record by the Board ofDirectors none of the directors is disqualified as on March 31 2021 from being appointedas a director in terms of Section 164(2) of the Act. f) With respect to the adequacy ofthe internal financial controls over financial reporting of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure A".Our report expresses an unmodified opinion on the adequacy and operating effectiveness ofthe Company's internal financial controls over financial reporting. g) With respect to theother matters to be included in the Auditor's Report in accordance with the requirementsof section 197(16) of the Act as amended in our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by theCompany to its directors during the year is in accordance with the provisions of section197 of the Act. h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationson its financial position in its standalone financial statements; ii. The Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Ganesh Balakrishnan
Partner
(Membership No. 201193)
UDIN: 21201193AAAADV1041
Place: Hyderabad
Date: May 28 2021

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NACLIndustries Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Ganesh Balakrishnan
Partner
(Membership No. 201193)
UDIN: 21201193AAAADV1041
Place: Hyderabad
Date: May 28 2021

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date) i. (a) The Company has maintainedproper records showing full particulars including quantitative details and situation ofproperty plant and equipment. (b) The Company has a program of verification of fixedassets to cover all the items in a phased manner over a period of three years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the program certain fixed assets were physically verified by theManagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings areheld in the name of the Company as at the balance sheet date. Immovable properties of landand buildings whose title deeds have been pledged as security for term loans and workingcapital loan are held in the name of the Company based on the confirmations directlyreceived by us from lenders. ii. As explained to us the inventories other than materiallying with third parties (which were substantially been confirmed) were physicallyverified during the year by the Management at reasonable intervals and no materialdiscrepancies were noticed on physical verification. iii. The Company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under section 189 of the Companies Act 2013.iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable. v. According to the information and explanations given to usthe Company has not accepted any deposit from public during the year. There are nounclaimed deposits on which provisions of Section 73 or 76 or and other relevant provisionof the Companies Act 2013 apply. vi. The maintenance of cost records has been specifiedby the Central Government under section 148(1) of the Companies Act 2013 for pesticides.We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete. vii. According to the information andexplanations given to us in respect of statutory dues: (a) The Company has been regularin depositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales Tax Goods and Services Tax Customs Duty Cess and othermaterial statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Goods and Services Tax Customs Duty Cess andother material statutory dues in arrears as at March 31 2021 for a period of more thansix months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Excise duty Goods andService Tax which have not been deposited as on March 31 2021 on account of disputes aregiven below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount involved (Rs in lakhs) Amount Unpaid (Rs in lakhs)
Hon'ble High Court of Telangana 2004-05 13 8
2008-09
Central Excise Act 1944 Excise duty CESTAT Hyderabad 2005-06 4 -
Addl. Commissioner (Appeals) Visakhapatnam 2006-07 12 12
Finance Act 1994 Service tax Commissioner (Appeals) Andhra Pradesh 2006-07 to 2010-11 15 15
Assistant Commissioner 2009-10 2010-11 2012-13 to 2014-15 44 27
Additional Commissioner 2012-13 4 -
Commissioner Appeals 2015-16 7 5
Sales Tax Act Sales Tax Hon'ble High Court of Telangana and Andhra Pradesh 2011-12 2013-14 to 2015-16 50 36
Sales Tax Appellate Tribunal Andhra Pradesh 2015-16 1 1
Goods and Service Tax Act 2017 Goods and Service Tax Deputy Commissioner Haryana 2019-20 6 -
The Income Tax Act 1961 Income Tax Commissioner of Income Tax Appeals 2017-18 121 -

There are no dues of Customs Duty which have not been deposited as on March 31 2021 onaccount of any disputes.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financial institutionand banks. The Company has not taken any loans or borrowings from government. The Companyhas not issued any debentures. ix. The Company has not raised moneys by way of initialpublic offer or further public offer (including debt instruments) during the year. In ouropinion and according to the information and explanations given to us the term loans havebeen applied by the Company during the year for the purposes for which they were raised.x. To the best of our knowledge and according to the information and explanations given tous no fraud by the Company and no material fraud on the Company by its officers oremployees has been noticed or reported during the year. xi. In our opinion and accordingto the information and explanations given to us the Company has paid / providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable. xiii. In our opinion and according to the information andexplanations given to us the Company is in compliance with Section 177 and 188 of theCompanies Act 2013 where applicable for all transactions with the related parties andthe details of related party transactions have been disclosed in the financial statementsetc. as required by the applicable accounting standards. xiv. According to the informationand explanations given to us the Company has made preferential allotment of sharesagainst conversion of outstanding share warrants during the year under review.

In respect of the above issue we further report that: a. the requirement of Section 42of the Companies Act 2013 as applicable have been complied with; and b. the amountsraised have been applied by the Company during the year for the purposes for which thefunds were raised.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of the holding subsidiaries or associate company or personsconnected with him and hence provisions of section 192 of the Companies Act 2013 are notapplicable. xvi. The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Ganesh Balakrishnan
Partner
(Membership No. 201193)
UDIN: 21201193AAAADV1041
Place: Hyderabad
Date: May 28 2021

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