TO THE MEMBERS OF LLOYDS METALS AND ENERGY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of Lloyds Metals and EnergyLimited ("the Company") which comprise the Balance Sheet as at March 31 2017and the Statement of Profit and Loss and Cash Flow Statement for the year then ended anda summary of significant information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows theCompany in accordance with the Accounting Standards notified under section 133 of theCompanies Act 2013 and Rule 7 of the Companies (Accounts) Rules 2014. This responsibilityincludes the design implementation and maintenance of internal control 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 financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence on a test basisabout the amounts and disclosures in the financial statements. The procedures selecteddepend on the auditors judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal control relevant to the Companyspreparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on the effectiveness of the entitys internal control. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by management as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017;
(b) in the case of the Statement of Profit and Loss of the profit for the year endedon that date; and
(c) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure I a statement on thematters specified in paragraphs 3 and 4 of the Order. of
2. We have inquired into the matters specified under section
143(1) and based on the information and explanations given to us there is no matter tobe reported under this section.
3. As required by section 143(3) of the Act we report that:
a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
d) In our opinion the Balance Sheet Statement of
Profit and Loss and Cash Flow Statement comply with the Accounting Standards notifiedunder section
133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules2014;
e) In our opinion and based on the information and explanations given to us there areno financial transactions or matters which have any adverse effect on the functioning ofthe Company.
f) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of subsection (2) ofSection 164 of the Companies Act 2013.
g) There is no qualification reservation or adverse re -mark relating to themaintenance of accounts and other matters connected therewith.
h) The Company has adequate internal financial controls system in place andthere is an operating effectiveness of such controls. A report as Annexure II giving ourresponsibilities and opinion has been annexed herewith.
i) Such other matters as are prescribed by the Companies (Audit and Auditors) Rules2014 namely:-
i. The Company has disclosed the impact if any of pending litigations on itsfinancial position in its financial statements.
ii. The Company has made provision as required under any law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.
iii. There has been no any delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in its financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with thebooks of accounts maintained by the Company.
For and on behalf of
Todarwal & Todarwal
ICAI Reg No : 111009W
M. No. : 134571
ANNEXURE I TO AUDITORS REPORT [Referred to in above the Auditors Report ofeven date to the Lloyds Metals and Energy Limited on the Financial Statements for the yearended 31st March 2017]
1 (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per the information and explanation given to us fixed assets arephysically verified by the management according to a phased programme designed to coverall the locations which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the programme the management during theyear physically verified the fixed assets at certain locations and no materialdiscrepancies were noticed on such verification.
(c) According to the information and explanation given to us and on verification thetitle deeds of immovable properties are held in the name of the Company except for theones kept as collateral security against the Cash Credit limit given by PMC Bank of Rs 20crores below:
Plot no A-1 Ghugus Industrial Area Dist Chandrapur admeasuring 40000 sq mtr Plot noA-2 Ghugus Industrial Area Dist Chandrapur admeasuring 895200 sq mtr
2. As per the information provided to us Inventory has been physically verified by themanagement during the year and no material discrepancies were noticed.
3. (a) According to information and explanation given to us the Company has notgranted any secured or unsecured loans to Companies firms Limited
Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act.
In view of the above provisions of clause 3(iii) (b) and (c) are not applicable to theCompany.
4. In our opinion and according to information and explanation given to us the Companyhas in respect of loans investments guarantees and security provisions complied withsection 185 and 186 of the Companies Act 2013.
5. According to the information and explanation given to us the Company has notaccepted any deposits whether the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act2013. Hence the provisions of clause 3(v) are not applicable to the Company.
6. Pursuant to the rules made by the Central Government the maintenance of CostRecords have been prescribed u/s. 148(1) of the Companies Act 2013. We are of the viewthat prima facie the prescribed accounts and records have been maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
7. (a) According to the books and records as produced and examined by us in accordancewith generally accepted auditing practices in India and also management representationsundisputed statutory dues in respect of Provident fund employees state insuranceIncome Tax Sales Tax Service tax Custom duty Excise duty Value added tax Cess andother statutory dues if any applicable to it has been regularly deposited with theappropriate authorities.
(b) According to the records of the Company the disputed dues in respect of ExciseDuty of Rs 597.94 lacs (Previous year Rs 5.20 Lakhs) and Sales Tax Rs 1.03 lakhs(Previous year Rs 1.03 lakhs) as at March 31st 2017 have not been depositedwith appropriate authorities and no provision has been made for the same:
|Name of the Statute ||Amount (In Lacs) ||Forum where dispute is pending |
|The Central Excise Act 1944 ||5.20 ||Supreme Court |
|The Central Excise Act 1944 ||584.45 ||CESTAT Mumbai |
|The Central Excise Act 1944 ||8.29 ||Commissioner |
| || ||(Appeal) Nagpur |
|The Central Sales Act 1956 ||1.03 ||Joint Commissioner - Sales Tax |
|Total ||598.97 || |
8. In our opinion and according to the information and explanation given to us and thebooks of accounts verified by us the Company has not defaulted in repayment of dues to afinancial institution bank Government or dues to debenture holders.
9. As per information given to us no money was raised by way of initial public offeror further public offer (including debt instruments) nor have any fresh term loans beentaken by the Company during the year. Hence the provisions of clause 3(ix) are notapplicable to the Company.
10. During the course of our examination of the books of account carried in accordancewith the generally accepted auditing standards in India we have neither come across anyinstance of fraud on or by the Company either noticed or reported during the year norhave we been informed of such case by the Management.
11. According to the information and explanation given to us and the books of accountsverified by us the Managerial remuneration has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act. 12. The Company is not a Nidhi Company hence the provision of clause3(xii) are not applicable to the Company. 13. According to the information and explanationgiven to us there are no transactions with the related parties.
14. According to information and explanation given to us the Company during the yearhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures hence the provision of clause 3(xiv) are not applicable to theCompany.
15. According to the information and explanation given to us and the books of accountsverified by us the Company has not entered into any non-cash transactions with directorsor persons connected with him.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For and on behalf of
Todarwal & Todarwal
ICAI Reg No : 111009W
M. No. : 134571
Dated : 12th April 2017
ANNEXURE II TO THE INDEPENDENT AUDITORS REPORT
OF EVEN DATE ON THE FINANCIAL STATEMENTS OF LLOYDS METAL AND ENERGY LIMTED AS ON 31ST
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
To the Members of Lloyds Metal and Energy Limited
We have audited the internal financial controls over financial reporting of LloydsMetal and Energy Limited ("the Company") as of March 31 2017 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Managements Responsibility for Internal Financial Controls
The Companys Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act
Our responsibility is to express an opinion on the Companys 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 as specified under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 auditors judgment 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 internal financial controls system overfinancial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A
Companys internal financial control over financial reporting includes 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 financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the Companys assets that could have a materialeffect 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 controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 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 and on behalf of
Todarwal & Todarwal
ICAI Reg No : 111009W
M. No. : 134571
Dated : 12th April 2017