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Nilkamal Ltd.

BSE: 523385 Sector: Industrials
NSE: NILKAMAL ISIN Code: INE310A01015
BSE 00:00 | 26 Nov 2389.60 -11.05
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NSE 00:00 | 26 Nov 2379.55 -24.30
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OPEN 2372.65
PREVIOUS CLOSE 2400.65
VOLUME 637
52-Week high 3174.00
52-Week low 1347.95
P/E 32.52
Mkt Cap.(Rs cr) 3,565
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2372.65
CLOSE 2400.65
VOLUME 637
52-Week high 3174.00
52-Week low 1347.95
P/E 32.52
Mkt Cap.(Rs cr) 3,565
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nilkamal Ltd. (NILKAMAL) - Auditors Report

Company auditors report

To the Members of Nilkamal Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Nilkamal Limited ("theCompany") which comprise the standalone Balance Sheet as at 31 March 2021 and thestandalone Statement of Profit and Loss (including Other Comprehensive Income) standaloneStatement of Changes in Equity and standalone Statement of Cash Flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information.

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 ("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 of the StandaloneFinancial 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 together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on the Standalonefinancial 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.

Description of Key Audit Matters

The key audit matter How the matter was addressed in our audit
Revenue recognition
(Refer to Significant Accounting Policy Note 33(m) and Note 25 in the standalone financial statements) In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Revenue of the Company mainly comprises of sale of material handling products and plastic moulded furniture to its customers. Revenue from sale of goods is recognised when control is transferred to the customers. a. Evaluating the Company's accounting policies for revenue recognition in terms of applicable accounting standards
There is a risk of revenue being overstated on account of variation in the timing of transfer of control due to the pressure to achieve performance targets at the reporting period end. b. Testing the design implementation and operating effectiveness of the Company's general IT controls and key IT/manual application controls. These are in respect of the Company's systems which govern timing of recognition of revenue including creation of new customers in the system.
Accordingly timing of recognition of revenue is a key audit matter. c. Performing testing on selected statistical samples of customer contracts. Checked terms and conditions related to acceptance of goods acknowledged delivery receipts and tested the transit time to deliver the goods and its revenue recognition. Our tests of details focused on substantive testing. It included year-end cut-off testing. We carried out audit procedures by selecting samples of revenue transactions recorded during the year and before and after the financial year end. We also selected samples of one off sales to customers by verifying the underlying documents such as sales invoices/contracts and shipping documents.
d. Performing substantive testing by verifying statistical samples of credit notes with underlying sales invoice and delivery documents.
e. Assessing manual journal entries posted to revenue on sample basis to identify unusual items of revenue recorded in the current year.

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

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

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 state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

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

Auditor's 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 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 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 standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures in the standalone financial statements madeby the Management and Board of Directors.

Conclude on the appropriateness of the Management and Board of Directors use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's

Auditor's Responsibilities for the Audit of the Standalone Annual Financial Results(Continued) report to the related disclosures in the standalone financial statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However futureevents or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books. c) The standalone Balance Sheet the standalone Statement ofProfit and Loss (including Other Comprehensive Income) the standalone Statement ofChanges in Equity and the standalone Statement of Cash Flows dealt with by this Report arein agreement with the books of account. d) In our opinion the aforesaid standalonefinancial statements comply with the Ind AS specified under section 133 of the Act. e) Onthe basis of the written representations received from the directors as on 31 March 2021taken on record by the Board of Directors none of the directors is disqualified as on 31March 2021 from being appointed as a director in terms of Section 164(2) of the Act. f)With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) 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. TheCompany has disclosed the impact of pending litigations as at 31 March 2021 on itsfinancial position in its standalone financial statements - Refer Note 34 (a) to thestandalone financial statements. ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses. iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company. iv. The disclosures in thestandalone financial statements regarding holdings as well as dealings in specified banknotes during the period from 8 November 2016 to 30 December 2016 have not been made inthese financial statements since they do not pertain to the financial year ended 31 March2021.

Report on Other Legal and Regulatory Requirements (Continued)

(C) 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 us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Co LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Rishabh Kumar
Partner
Mumbai Membership No. 402877
03 June 2021 ICAI UDIN: 21402877AAAADF5538

Annexure A to the Independent Auditors' Report – 31 March 2021

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2021 we report the following: (i) (a) The Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich the fixed assets are verified by the management according to a phased programmedesigned to cover all the items over a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with the programme the Company hasphysically verified certain fixed assets during the year and we are informed that nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 1 to the standalone financial statements are held in the name of theCompany other than those disclosed in the table below:

Asset class No of Gross Block Net block Remarks
cases (Rs in Lakhs) (Rs in Lakhs)
Freehold land 1 0.68 0.68 Pending completion of the relevant formalities of some of the fixed assets which vested in the Company pursuant to the scheme of amalgamation such assets continue to be in the name of the erstwhile amalgamated companies.
Buildings 23 224.66 197.96

(ii) The inventory except for goods in transit and stocks lying with third partieshas been physically verified by the management at reasonable intervals during the year. Inour opinion the frequency of such verification is reasonable. In respect of stocks lyingwith third parties at the year-end written confirmations have been obtained. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material and have been adequately dealt with in books of account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Companies Act 2013 (‘the Act'). Accordingly paragraph 3 (iii) of theOrder are not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has not granted any loans during the year or provided any guarantees or securityto the parties covered under Section 185 of the Act. The Company has complied with theprovisions of Section 186 of the Act in respect of the investments made by the Company.

Annexure A to the Independent Auditors' Report – 31 March 2021 (Continued)

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from public in accordance with provisions of Sections 73to 76 or any other relevant provisions of the Act and the rules framed thereunder.Accordingly paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(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 Employees' StateInsurance Income-tax Goods and Service tax Duty of Customs Cess and other materialstatutory dues have been generally regularly deposited during the year by the Company withthe appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Sales-taxGoods and Service tax Service tax Duty of Customs Duty of Excise Value added tax Cessand other material statutory dues were in arrears as at 31 March 2021 for a period of morethan six months from the date they became payable. (b) According to the information andexplanations given to us there are no dues of Income-tax Sales tax Service tax Duty ofCustoms Duty of Excise 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. in Lakhs) Period to which the amount relates Forum where the dispute is pending
Central Sales Tax Act and Local Sales Tax of various states Central Sales Tax and Local Sales Tax (including Value Added Tax) - 2001-2002 to 2004-2005 Supreme Court
0.26 2010-11 Commercial Tax Officer
26.13 2012-2013 to 2014-2015 Excise and Taxation officer
22.57 2012-2013 2013-14 Commissioner – Appeals
5.35 2015-16 Additional Commissioner – Appeals
47.37 2017-18 High Court
33.94 2015-16 and 2017-18 Deputy Commissoner (VAT)
Central Excise Act 1944 Excise Duty 72.22 June 2009 to September 2014 Commissioner –Appeals
10.17 2008-2013 Commissioner –Appeals
32.31 October 2014 to March 2015 Customs Excise & Service tax Appellate tribunal ("CESTAT")
39.88 April 2015 to December 2015 Customs Excise & Service tax Appellate tribunal ("CESTAT")
30.36 April 2013 to September 2014 Customs Excise & Service tax Appellate tribunal ("CESTAT")
74.95 January 2016 to June 2017 Commissioner – Appeals
11.93 April 2016 to June 2017 Commissioner – Appeals
Income Tax Act 1961 Tax Deducted at Source 29.58 2019-20 Commissoner of Income Tax - Appeals

* Amount is net of payments made under dispute

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks. The Companydoes not have any loans or borrowings from financial institutions or government or dues todebenture holders during the year. (ix) According to the information and explanations giveto us and based on our examination of the records of the Company the Company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) during the year. In our opinion and according to the information andexplanations given to us the term loans taken by the Company have been applied for thepurposes for which they were raised.

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

(xi) In our opinion and according to the information and explanations given to us themanagerial remunerationhasbeenpaidorprovidedinaccordancewiththerequisiteapprovalsmandatedbytheprovisionsofSection197read 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 and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usthe Company has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act where applicable and the details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act read with relevant rules.

(xiv) According to the information and explanations give 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 to the Company.

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

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Rishabh Kumar
Partner
Mumbai Membership No. 402877
03 June 2021 ICAI UDIN: 21402877AAAADF5538

Annexure B to the Independent Auditors' report on the standalone financial statementsof Nilkamal Limited for the year ended 31 March 2021 Report on the internal financialcontrols with reference to the aforesaid standalone financial statements under Clause (i)of Sub-section 3 of Section 143 of the Companies Act 2013 (Referred to in paragraph(2(A)(f)) under ‘Report on Other Legal and Regulatory Requirements' section of ourreport of even date) Opinion

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

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2021 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note")

Annexure B to the Independent Auditors' report on the standalone financial statementsof Nilkamal Limited for the year ended 31 March 2021 (Continued) Management'sResponsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its 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 Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the standalone financial statements whether due tofraud 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 withreference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone financial statements include thosepolicies and procedures that (1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of standalone financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Rishabh Kumar
Partner
Mumbai Membership No. 402877
03 June 2021 ICAI UDIN: 21402877AAAADF5538

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