THE MEMBERS OF
LANCOR HOLDINGS LIMITED
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of LancorHoldings Limited (hereinafter referred to as "the Holding Company")and itssubsidiaries (the Holding Company and its subsidiaries together referred to as "theGroup")and jointly controlled entity (as defined in the Companies (AccountingStandards) Rules 2006) comprising of the Consolidated Balance Sheet as at 31st March2016 the Consolidated Statement of Profit and Loss the Consolidated Cash Flow Statementfor the year then ended and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the consolidated financialstatements").
Management's Responsibility for the Consolidated Financial Statements
The Holding Company's Board of Directors is responsible for the matters stated insection 134(5) of the Companies Act 2013 (hereinafter referred to as "the Act")with respect to the preparation of these consolidated financial statements that give atrue and fair view of the consolidated financial position consolidated financialperformance and consolidated cash flows of the Group including its Jointly controlledentity in accordance with the accounting principles generally accepted in India includingthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. The respective Governing Bodies of the entities includedin the Group and jointly controlled entity are responsible for maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Group and for preventing and detecting frauds and other irregularities; theselection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error which have been used for the purposeof preparation of the consolidated financial statements by the Board of Directors of theHolding Company as aforesaid.
Our responsibility is to express an opinion on these consolidated financial statementsbased on our audit. While conducting the audit we have taken into account the provisionsof the Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder. We conducted our audit in accordance with the Standards on Auditing specifiedunder Section 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe consolidated financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the consolidated financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the consolidated financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to the HoldingCompany's preparation of the consolidated financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Holding Company's Board ofDirectors as well as evaluating the overall presentation of the consolidated financialstatements. We believe that the audit evidence obtained by us and the audit evidenceobtained by the other auditors in terms of their reports referred to in sub-paragraph (a)of the Other Matters paragraph below is sufficient and appropriate to provide a basis forour audit opinion on the consolidated financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid consolidated financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the consolidated state of affairs ofthe Group and jointly controlled entity as at 31st March 2016 and their consolidatedprofit and their consolidated cash flows for the year ended on that date.
Emphasis of Matter
a) We draw your attention to note no.4.04 (b) of notes to the audited consolidatedfinancial statement relating to circumstances which have been considered for determiningthe period for capitalization of borrowing cost.
b) We draw attention to note no.4.12(a) regarding pending litigation to one of theCommercial Property accounted as fixed assets. Our report is not qualified in respect ofthe above matters.
We did not audit the financial statements of Lancor Maintenance & Services Limited(subsidiary) whose financial statement reflect total assets of Rs.991.28 lakhs as at31st March 2016 total revenues of Rs.543.58Lakhs and net cash flows amounting toRs.39.08lakhs for the year ended on that date as considered in the preparation of theconsolidated financial statements. These financial statements have been audited by otherauditor whose report has been furnished to us by the Management and our opinion on theconsolidated financial statements in so far as it relates to the amounts and disclosuresincluded in respect of this subsidiary and our report in terms of sub-sections (3) and(11) of Section 143 of the Act insofar as it relates to the aforesaid subsidiary is basedsolely on the reports of the other auditor.
Our opinion on the consolidated financial statements and our report on Other Legal andRegulatory Requirements below is not modified in respect of the above matters withrespect to our reliance on the work done and the reports of the other auditor.
Report on Other Legal and Regulatory Requirements
1. As required by sub-section (3) of Section 143 of the Act we report to the extentapplicable that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit of the aforesaidconsolidated financial statements.
(b) In our opinion proper books of account as required by law relating to preparationof the aforesaid consolidated financial statements have been kept so far as it appearsfrom our examination of those books and the reports of the other auditors.
(c) The Consolidated Balance Sheet the Consolidated Statement of Profit and Loss andthe Consolidated Cash Flow Statement dealt with by this Report are in agreement with therelevant books of account and working/recordsmaintained for the purpose of preparation ofthe consolidated financial statements.
(d) In our opinion the aforesaid consolidated financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors of theHolding Company as on 31st March 2016 taken on record by the Board of Directors ofthe Holding Company and the reports of the statutory auditors of its subsidiary companiesincorporated in India none of the directors of the Group companies incorporated in Indiais disqualified as on 31st March 2016 from being appointed as a director interms of Section 164 (2) of the Act.
(f) With respect to adequacy of internal financial controls over financial reporting ofthe group and operating effectiveness of such controls refer to the separate report in"Annexure A"
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The consolidated financial statements disclose the impact of pending litigations onthe consolidated financial position of the Group and jointly controlled entity- Refer NoteNumber 4.12 to the consolidated financial statements.
ii. The Group and jointly controlled entity did not have any material foreseeablelosses on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Holding Company and its subsidiarycompanies incorporated in India.
| ||For G. M. Kapadia & Co. |
| ||Chartered Accountants |
| ||(Firm Registration No.104767W) |
| ||Satya Ranjan Dhall |
|Chennai ||Partner |
|Dated: May 28 2016 ||(Membership No. 214046) |
Annexure "A" to the Independent Auditor's Report
Referred to paragraph 2(f) under the heading Report on other Legal and RegulatoryRequirements' of our report on even date to the financial statements of the Company forthe year ended March 312016
Report on the Internal Financial Controls under Clause (i) of Sub Section 3 of Section143 of the Companies Act 2013 (the "Act")
In conjunction with our audit of the consolidated financial statements of the Companyas of and for the year ended March 312016 we have audited the internal financialcontrols over financial reporting of Lancor Holdings Limited ("the HoldingCompany") and its subsidiary companies which are companies incorporated in India asof that date.
Management's Responsibility for Internal Financial Controls
The respective Board of Directors of the Holding company and its subsidiary companieswhich are companies incorporated in India are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).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 the respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the ICAI and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained bythe other auditor in terms of their report referred to in the Other Matters paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Holding Company and its subsidiary companies which are companiesincorporated in India have in all material respects an adequate internal financialcontrols system over financial reporting were operating effectively as at March 312016based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting insofar as itrelates to one subsidiary company which is incorporated in India is based on thecorresponding reports of the auditors of such company incorporated in India.
| ||For G.M.Kapadia & Co. |
| ||Chartered Accountants |
| ||(Firm Registration No.104767W) |
| ||Satya Ranjan Dhall |
|Chennai ||Partner |
|Dated: May 282016 ||(Membership No. 214046) |