Kokuyo Camlin Limited Report on the Audit of the Financial Statements Qualified Opinion
We have audited the accompanying financial statements of Kokuyo Camlin Limited (the “Company”) which comprise the balance sheet as at 31 March 2026, and the statement of profit and loss (including other comprehensive income), statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2026, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
We draw attention to Note 43 to the financial statements of the Company for the year ended 31 March 2026 with respect to loss of ' 2,356.81 lakhs recognsied in the year ended 31 March 2025 representing shortage of physical inventory as ' 1,032.44 lakhs in cost of material consumed (including indirect taxes ' 212.52 lakhs) and ' 1,324.37 lakhs in changes in inventories. Management had not identified the possible impact of this shortage on the prior period’s financial information, if any. As a result, no adjustment was made to the comparative
information resulting in a departure from the recognition and measurement principles of Ind AS 8. Our audit opinion on the financial statements for the year ended 31 March, 2025 was modified accordingly. Our opinion on the current year’s financial statements is also modified because of the possible effect of this matter on the comparability of the current year’s figures and the corresponding figures.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Basis for Qualified Opinion section, we have determined matters described below to be the key audit matters to be communicated in our report.
|
Revenue from Contract with Customers - Timing and Discounts, Incentives and Rebates
See Note 2(d), 22 and 38 to the financial statements
|
|
The key audit matter
|
How the matter was addressed in our audit
|
|
Revenue from the sale of goods is recognised when the control of the
|
In view of the significance of the matter we applied the following audit
|
|
goods has passed to the customers, which is on dispatch/delivery of
|
procedures in this area, among others to obtain sufficient appropriate
|
|
the goods. There is a risk of overstatement of revenue throughout the
|
audit evidence:
|
|
year and as at the year end to achieve performance targets.
Revenue is measured net of discounts, incentives and rebates earned
|
• We have assessed the Company’s accounting policies with respect to revenue recognition, discounts, incentives and
|
|
by customers on the Company’s sales. The estimation of discounts,
|
rebates by comparing with applicable accounting standards.
|
|
incentives and rebates is significant and considered to be complex. There is a risk that revenue may be overstated through incorrect estimation of the discounts, incentives and rebates recognised to achieve performance targets throughout the year and as at the year end.
|
• We have assessed the design and implementation and tested the operating effectiveness of the Company’s internal controls over recording revenue and estimating and recording the amount of accrual for schemes and discounts.
|
|
The key audit matter
|
How the matter was addressed in our audit
|
|
Accordingly, revenue recognition including discounts, incentives and
|
•
|
We have tested, by selecting statistical samples, underlying
|
|
rebates is a key audit matter.
|
•
|
documentation/records for sales transactions recorded throughout the year and as at year end to determine whether revenue has been recognised in the correct period.
We have tested, by selecting statistical samples, the underlying documentation for discounts, incentives and rebates recorded and disbursed during the year.
|
| |
•
|
We have assessed the Company’s computations for accrual of discounts, incentives and rebates, on a sample basis, and compared the accruals made with the approved schemes and underlying documents.
|
| |
•
|
We have compared past trends of payments and reversals of provisions for discounts, incentives and rebates to evaluate the historical accuracy of provisions made.
|
| |
•
|
We have assessed manual journals posted to revenue to identify unusual or irregular items.
|
|
Determination of existence and net realisable value of inventory
|
|
See Notes 2(n) and 8 to the financial statements
|
|
|
|
The key audit matter
|
How the matter was addressed in our audit
|
|
Inventories represent 35.85% of total assets of the Company as at
|
In view of the significance of the matter we applied the following audit
|
|
March 31, 2026. Such inventories are held across various factories,
|
procedures in this area, among others to obtain sufficient appropriate
|
|
warehouses and third party locations as at the reporting date.
|
audit evidence:
|
|
Considering the number of locations and the level of inventory held across these locations, as well as discrepancies pertaining to inventory identified by management during the year, the risk of existence of such inventory is a significant area of audit importance.
|
•
•
|
We have assessed the Company’s policies for inventory measurement and physical verification of inventory.
We have assessed the design and implementation and tested the operating effectiveness of the Company’s controls over
|
|
Further, the inventory valuation also requires management estimates
|
|
the assessment and recording of inventory count process and
|
|
towards write-down of inventory items to its net realizable value
|
|
estimating net realisable value of inventory.
|
|
(wherever applicable) and estimate is required to assess net realizable value for slow moving or non-moving inventory including obsolescence risk.
|
•
|
We observed the inventory count process as at the year end at factories, job-workers and selected depots on a sample basis, inspected the results of the inventory count and assessed the
|
|
Considering the relative significance of the Inventory to the Financial
|
|
variances from books of account including accounting of such
|
|
statements, we have considered the existence of Inventory and net
|
|
variances.
|
|
realizable value of slow / non-moving inventory and obsolescence as key audit matter.
|
•
|
We obtained independent confirmations for inventory lying with third parties.
|
| |
•
|
We assessed the adjustments to bring down the cost of inventory items to their net realisable value at the reporting date is appropriate by assessing the methodology and assumptions adopted by management in this regard including the related adjustments by testing a sample of inventory items as at the reporting date.
|
| |
•
|
We have compared the historical trend of Company’s estimates against actual outcomes to assess the impact of bringing down the cost of inventory items to their net realisable value.
|
Other Information
The Company’s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.
Management’s and Board of Directors’ Responsibilities for the Financial Statements
The Company’s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design 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 has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government of India 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 the Order, to the extent applicable.
2 A. As required by Section 143(3) of the Act, we report that:
a. We have sought and except for the matter described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our 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 so far as it appears from our examination of those books except for the matter described in the Basis for Qualified Opinion paragraph and the matter stated in the paragraph 2(B)(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
c. The balance sheet, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors from 6 April 2026 to 17 April 2026 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2026 from being appointed as a director in terms of Section 164(2) of the Act.
f. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above, in the paragraph 2A(b) above on reporting under Section 143(3)(b) of the Act and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
B. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations as at 31 March 2026 on its financial position in its financial statements - Refer Notes 21, 28 and 29 to the financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d (i) The management has represented that, to the best of their knowledge and belief, as disclosed in the Note 41 a to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of their knowledge and belief, as disclosed in the Note 41 b to the financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in
writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. As stated in Note 13 to the financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
f. Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective softwares:
In respect of the accounting software used for maintaining general ledger, the feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes. Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with.
Further, based on our examination, for the accounting software used for maintaining the books of account relating to payroll, which is operated by a third-party software service provider, in the absence of independent auditor’s report in relation to controls at service organisations, we are unable to comment whether the said software has the feature of recording audit trail (edit log) facility or whether
audit trail feature of the said software was enabled and operated throughout the year for all relevant transactions recorded in the software or whether there were any instances of the audit trail feature being tampered with.
Additionally, except where audit trail (edit log) facility was not enabled and operated in previous year, the audit trail has been preserved by the Company as per the statutory requirements for record retention.
C. With respect to the matter to be included in the Auditor’s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in
accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No.:101248W/W-100022
Maulik Jhaveri
Partner
Place: Mumbai Membership No.: 116008
Date: 15 May 2026 ICAI UDIN:26116008EXCELV3472
|