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Neelamalai Agro Industries Ltd.

BSE: 508670 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE605D01012
BSE 00:00 | 22 Oct 3321.05 -78.95
(-2.32%)
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NSE 05:30 | 01 Jan Neelamalai Agro Industries Ltd
OPEN 3252.20
PREVIOUS CLOSE 3400.00
VOLUME 57
52-Week high 3929.00
52-Week low 1005.00
P/E 27.00
Mkt Cap.(Rs cr) 206
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3252.20
CLOSE 3400.00
VOLUME 57
52-Week high 3929.00
52-Week low 1005.00
P/E 27.00
Mkt Cap.(Rs cr) 206
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Neelamalai Agro Industries Ltd. (NEELAMALAIAGRO) - Auditors Report

Company auditors report

To the members of Neelamalai Agro Industries Limited

Report on the Audit ofthe Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Neelamalai Agro IndustriesLimited ("the Company") which comprise the standalone balance sheet as at 31March 2021 and the standalone statement of Profit and Loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "standalone financial 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 true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit ofthe Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode ofEthics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

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 be the key audit matters to becommunicated in our report.

Sr. No. Key audit matters How our audit addressed the key audit matter
1. Accounting for Government Grants Principal audit procedures:
The company is entitled to apply for and seek support from Tea Board towards Replanting expenditure Rejuvenation Expenditure and also in respect of Orthodox manufacture. • We have evaluated the company's process of determining the point of reasonable certainty in recognition of the grants for different categories of grants and the robustness with which this process is consistently applied.
Further the company is also entitled for Merchandise Exports from India Scheme incentives on exports. • Our review also included the estimation process in terms of the grant amounts recorded as receivable and the process of reevaluating the same at each period end
There are uncertainties attached to these government grants in respect of the timing and quantum of approvals based on the processing of the applications. • We also reviewed the disclosures made in the financial statements in terms of the policy and the treatment of the grants in terms of capital grants and revenue grants.
2. Unobservable or interpolated inputs used for the valuation of certain level 3 investments Principal audit procedures:
Given the ongoing market volatility and macroeconomic uncertainty investment valuation is an area of inherent risk. The risk is not uniform for all investment types and is greatest for unquoted investments where the investments are hard to value because quoted prices are not readily available. • We assessed both the methodology and assumptions used by management in the calculation of the year end values of the investments as well as testing the governance controls that the Directors have in place to monitor these processes.
• The testing included performing amongst others the following procedures:
The Company's accounting policies in respect of financial assets are included in the Company's accounting policies while the disclosures are included in Note No. 40 to the standalone financial statements. o Evaluating the methodology and assumptions in the valuation models;
o Comparing the assumptions used against appropriate benchmarks and enquiring into significant differences;
o Wherever available recent transactions in the unquoted investments are appropriately considered.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theDirector's report and Management Discussion and Analysis Report but does not include thestandalone financial statements and our auditors' report thereon.

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 audit or otherwise appears to be materially misstated. If based onthe work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of the Management and Those Charged with Governance for StandaloneFinancial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceand total comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian accounting Standards (Ind AS) prescribed under section 133 ofthe Act. 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 ofappropriateaccounting 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 and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

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

Auditors' Responsibilities 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 auditors' 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 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 control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under sectionI43(3)(i) ofthe Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls with reference to the standalonefinancial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness ofaccounting 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. Ifwe conclude that a material uncertainty existswe are required to draw attention in our auditors' 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 ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern; and

• 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.

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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' 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 the Companies (Auditors' 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 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 bestofour knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The standalone Balance Sheet the standalone Statement of Profit and Loss(including other comprehensive income) the standalone Statement of Changes in Equity andthe standalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

. (e) On the basis of the written representations received

from the directors as on 31 March 2021 taken on record by the Board of Directors noneof the directors is disqualified as on 31 March 2021 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy ofthe internal financial controls with reference tothe standalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditors' 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 as at 31 Match 2021 onits financial position in its standalone financial statements-Refer Note 37 to thestandalone financial statements;

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

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2021; and

3. With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to usremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act except for the re-appointment of theExecutive Director from 5 February 2021 and the remuneration paid for the period therefromamounting to Rs. 1.87 Lakhs being subject to approval of the shareholders which theCompany proposes to obtain in the forthcoming Annual General Meeting.

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
T V Balasubramanian
Partner
Chennai Membership No.027251
30.06.2021 UDIN: 21027251AAAAED9056

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

To the members of Neelamalai Agro Industries Limited

Referred to in paragraph 1 on ‘Report on Other Legal and Regulatory Requirements'of our report of even date to the members of Neelamalai Agro Industries Limited ("theCompany") on the standalone financial statements as ofand for the year ended 31 March2021. i. In respect of the Company's fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. In our opinion and according to theinformation and explanations given to us no material discrepancies were noticed on suchverification

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of the land and buildings whichare freehold are held in the name of the Company as at Balance Sheet date.

(ii) The inventory except stocks lying with third parties has been physicallyverified by the management at reasonable intervals during the year. In our opinion thefrequency of such verification is reasonable. For stocks lying with third parties at theyear-end written confirmations have been obtained or subsequent utilization verified. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material and have been dealt with in the books of account.

(iii) Based on our audit procedures & according to the information and explanationgiven to us the Company has not granted any loans secured or unsecured to partiescovered in the register maintained under section 189 of the Act and hence 3(iii) of theOrder is not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has complied with provisions ofSection 185 and 186 ofthe Act with respect ofmaking investments. The company has not granted loans provided guarantees andsecurities as applicable.

(v) Based on our audit procedures & according to the information and explanationgiven to us the Company has not accepted any deposits from the public within the meaningof the Act and the rules made there under and hence clause 3(v) of the Order is notapplicable.

(vi) We have broadly reviewed the books of account relating to materials labour andother items of costs maintained by the Company as specified under Section 148(1) of theAct for maintenance of cost records in respect of the products manufactured by theCompany and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. However we have not made a detailed examination of costrecords with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us except for few delays in case of tax deducted at source andprofession tax the Company has generally been regular in depositing undisputed statutorydues including provident fund employees' state insurance income-tax duty of customsGoods and Services Tax (GST) cess and any other statutory dues as applicable with theappropriate authorities.

According to the information and explanation given to us and the records of the Companyexamined by us no undisputed amounts payable in respect of provident fund employees'state insurance income-tax duty of customs Goods and Services Tax (GST) cess and anyother statutory dues were in arrears as at 31 March 2021 for a period of more than sixmonths from the date they became payable. (b) According to the information andexplanations given to us and based on our examination of the records of the Company thereare no dues of Income-tax Sales Tax Service tax Goods and Services Tax (GST) Duty ofcustoms Excise duty and Value added tax as at 31 March 2021 which have not beendeposited with the appropriate authorities on account of any dispute except as statedbelow:

Name of the Statute Nature of dues Amount (Rs. Lakhs) Forum where dispute is pending
Income Tax Act AY 2012-13 & 2013-14 4.43 CIT (Appeals)

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment ofloans or borrowings to bank. The Company doesnot have any loans or borrowings from financial institutions debenture holders or thegovernment during the year.

(ix) According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Accordingly reporting under the clause 3(ix)of the Order is not applicable to the Company.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year nor have we beeninformed of such case by the management.

(xi) According to the information and explanations given to us the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Act the year ended 31 March2021 except that the re-appointment of the Executive Director from 5 February 2021 andthe remuneration paid for the period therefrom amounting to Rs. 1.87 Lakhs being subjectto approval of the shareholders which the Company proposes to obtain in the forthcomingAnnual General Meeting.

(xii) The Company is not a Nidhi company in accordance with Nidhi Rules 2014.Accordingly the provisions of clause (xii) of the Order are not applicable.

(xiii) Based on our audit procedures and according to the information and explanationsgiven to us all the transactions entered into with the related parties during the yearare in compliance with Section 177 and Section 188 ofthe Act where applicable and thedetails have been disclosed in the standalone financial statements as required by theapplicable Indian accounting standards.

(xiv) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not made any preferential allotment of shares allotment orprivate placement ofshares or fully or partly paid convertible debentures during the yearunder review. Accordingly the provisions of clause (xiv) of the Order are not applicable.

(xv) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with them.

(xvi) Based on our audit procedures and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of ReserveBank of India Act 1934.

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
T V Balasubramanian
Partner
Chennai Membership No.027251
30.06.2021 UDIN: 21027251AAAAED9056

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

To the members of Neelamalai Agro Industries Limited

Referred to in paragraph 2(f) on ‘Report on Other Legal and RegulatoryRequirements' of our report of even date Report on the Internal Financial Controls withreference to the aforesaid standalone financial statements under Clause (i) of Sub-section3 of Section 143 ofthe Companies Act 2013 We have audited the internal financialcontrols with reference to standalone financial statements of Neelamalai Agro IndustriesLimited ("the Company") as of 31 March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the Board ofDirectors are responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents ofinternal control stated in the Guidance Note issued by the Institute ofChartered Accountants ofIndia. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offraudsand errors the accuracy and completeness of the accounting records and the timelypreparation ofreliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

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 and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were 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 with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 standalone financial statements whether due to fraud orerror.

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 withreference to financial statements.

Meaning of Internal Financial Controls with reference to standalone financialstatements

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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 with reference to standalonefinancial statements

Because ofthe 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 adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents ofinternal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (the "Guidance Note").

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
T V Balasubramanian
Partner
Chennai Membership No.027251
30.06.2021 UDIN: 21027251AAAAED9056

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