Independent Auditor's Report
The Members of
Lawreshwar Polymers Limited
Report on the Financial Statements
We have audited the accompanying standalone financial statements of LawreshwarPolymers Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 and the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.
Management's Responsibility for the standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
Basis for Qualified Opinion
Refer Note No. 15 of Notes on Financial Statements regarding loss by fire &non-provision of shortfall in insurance claim amounting to Rs. 18674521/-.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March2017 and its profit/loss and its cash flows forthe year ended on that date.
Report on Other Legal & Regulatory Requirement
1. As required by the Companies (Auditor's 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 statement on the matters specified in the paragraph 3and 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 bestof 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 by theCompany so far as it appears from our examination of those books;
c. The balance sheet the statement of profit and loss and the cash flow statementdealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid standalone 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 as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act;
f. As required under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 on the Internal Financial Control over Financial Reporting to the extent applicablerefer our separate report in Annexure II and
g. With respect to the other matters to be included in the Auditor's 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 effect of pending litigations (if any) are disclosed by way of Note in thefinancial statements- Refer Note 35 to the financial statements;
ii. The Company did not have any long term contract including derivatives contracts forwhich there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealing in Specified Bank Notes as define in theNotification S.O. 3407(E) dated the November 8' 2016 to December 30 2016. Based on auditprocedures performed and presentations provided to us by the management we report thatthe disclosures are in accordance with the books of accounts maintained by the Company andas produce to us by the Management.
For A.Bafna & Company Chartered Accountants FRN: 003660C
(CA Vivek Gupta) Partner M.No. 400543 Date: 27th May 2017 Place: Jaipur
Annexure I to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2017 we reportthat:
(i) (a) The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management during the yearand there is a regular program of verification which in our opinion is reasonable havingregard to the size of the company and the nature of its assets No material discrepancieswere noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) (a) The inventory has been physically verified during the year by themanagement. In our opinion the frequency of verification is reasonable.
(b) The discrepancies noticed on physical verification of inventory as compared tobook records were not material and have been properly dealt with in the books of accounts.
(c) In our opinion and according to the information and explanation given to us andon the basis of our examination of the records of inventory the company is maintainingproper records of inventory. The discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been properly dealt within the books of accounts.
(iii) The Company has not granted loans to companies firms or other partiescovered in the register maintained under section 189 of the Companies Act 2013 ('theAct') hence clause (iii) (a) (b) & (c) of the order are not applicable.
(iv) In our opinion and according to the information and explanations given to usthe company has complied with the provisions of section 185 and I86 of the Companies Act2013 In respect of loans investments guarantees and security
(v) The Company has not accepted any deposits from the Public and hence thedirectives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 orany other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules2015 with regard to the deposits accepted from the public are not applicable
(vi) According to the information & explanation given to us the company hasmaintained cost accounts & records as prescribed by the Central Government underSection 148(1) of the Companies Act 2013. However we have not made a detailed examinationof such accounts & records with a view to determine whether they are adequate orcomplete.
(vii) In respect of statutory dues:
(a) According to the records of the company undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Service Tax Duty ofCustoms Value Added Tax Cess and other material statutory dues have been regularlydeposited during the year by the Company with the appropriate authorities except for a fewdelays. According to the information and explanations given to us no disputed amountpayable in respect of the aforesaid due were outstanding as at March 31 2017for a periodof more than six months from the date of becoming payable.
(b) According to the information and explanation given to us there are no pendingdues of Income Tax Sales Tax Service Tax Duty of Custom Duty of Excise Value AddedTax or Cess which are not deposited on account of dispute.
(viii) The Company have not defaulted in repayment of dues to a financialinstitutions banks or debenture holders during the year.
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management during the year under review the company has not raised moneys byway of initial public offer or further public offer including debt instruments. To thebest of our knowledge and belief and according to the Information and Explanation given tous term loans availed by the company were prima facie applied by the company during theyear for the purpose for which the loan were Obtained.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.
(xii)In Our Opinion the Company is not a Nidhi Company. Therefore the provisionsof clause 4 (xii) of the Order are not applicable to the Company.
(xiii) In our opinion all transactions with the related parties are in compliancewith section 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) Based upon the audit procedures performed and the information andexplanations given by the management the company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the provisions of clause 3 (xiv) of the Order are notapplicable to the Company and hence not commented upon.
(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
(xvi) In our opinion the company is not required to be registered under section 45IA of the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3(xvi) of the Order are not applicable to the Company and hence not commented upon .
For A.Bafna & Company Chartered Accountants FRN: 003660C Sd/-
(CA Vivek Gupta) Partner M.No. 400543 Date: 27th May 2017 Place: Jaipur
Annexure II to the Independent Auditors' Report
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 Standalone financial statements of the Company asof and for the year ended March 31 2017 We have audited the internal financial controlsover financial reporting of Lawreshwar Polymers Limited (hereinafter referred to as"the Company") which is a company incorporated in India as of that date.
Management's Responsibility for Internal Financial Controls
The respective Board of Directors of the company are responsible for establishing andmaintaining internal financial controls based on the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to therespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies 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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofinternal financial controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
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 systemover 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; 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 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 Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For A.Bafna & Company Chartered Accountants FRN:003660C
(CA Vivek Gupta)
Partner M.No.: 400543
Date: 27th May 2017