LN Industries India Ltd.
|BSE: 530745||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE366C01013|
|BSE 11:12 | 07 Aug||LN Industries India Ltd|
|NSE 05:30 | 01 Jan||LN Industries India Ltd|
|BSE: 530745||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE366C01013|
|BSE 11:12 | 07 Aug||LN Industries India Ltd|
|NSE 05:30 | 01 Jan||LN Industries India Ltd|
The Members of
LN INDUSTRIES INDIA LIMITED HYDERABAD 500 073.
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of LN IndustriesIndia Limited ("the Company") which comprises the Balance Sheet as at March 312017 the Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
3. 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 there under. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India as specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand 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 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.
5. 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.
6. In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 its Profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. 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' a statement on the matters specified in paragraphs 3and 4 of the Order.
8. 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 purpose of our audit; (b) In ouropinion proper books of account as required by law have been kept by the Company so far asit appears from our examination of those books; (c) The Balance Sheet Statement of Profitand Loss and Cash Flow Statement dealt with by this Report are in agreement with thebooks of account; (d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014; (e) On the basis of written representations receivedfrom the directors as on March 31 2017 and taken on record by the Board of Directorsnone of the directors is disqualified as on March 31 2017 from being appointed as adirector in terms of section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in
(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) TheCompany disclosed the impact of pending litigations on its financial position in itsstandalone financial statements Refer Note 22.7 to financial statements. ii)The Company did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses. iii) There were no amounts which were requiredto be transferred to the Investor Education and Protection Fund by the Company. iv) TheCompany has provided requisite disclosures in the standalone Ind AS financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures and relying on themanagement representation we report that the disclosures are in accordance with books ofaccount maintained by the Company and as produced to us by the Management ReferNote No.22.10.
'Annexure A' referred to in paragraph 7 of our report of even date:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. However the Company is yet to updatethe record relating to the assets which are diposed off.
(b) The Company has not conducted physically verification of the fixed assets duringthe year. (c) Based upon the audit procedure performed and according to the records of theCompany title deeds of all the immovable properties are held in the name of the Company.
(ii) (a) As explained to us as their stands no Inventories of raw materialsconsumables stores packing materials work -in- progress and finished goods nophysically verification was taken place during the year by the management.
(iii) Accordingly to the information and explanations given to us the Company has notgranted any unsecured loans to Companies or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Accordingly the provision ofclause 3(iii)(a) to (b) of the order are not applicable to the Company.
(a) The Company has outstanding loans from a party. The maximum amount outstandingduring the year in relation to the loans taken aggregated to Rs.824.73 lakhs.
(b) In our opinion and according to the information and explanations given to us norates of interests are specified for the loans taken. The other terms and conditions forthese loans are not prima facie prejudicial to the interest of the Company.
(c) The loans taken from Directors are interest free and subordinate to the debts ofthe Financial Institutions so as to the repayment of principal.
(d) There are no loans dues as the Company has settled all its loans given by Banks andFinancial Institutions.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of Act in respect ofloans investments guarantees and security to the extent applicable to it.
(v) According to the information and explanations given to us the Company has notaccepted any deposit from the public within the meaning of section 73 to 76 of the Act andthe rules framed there under.
Therefore the provisions of clause 3(v) of the order are not applicable to theCompany.
(vi) The Central Government has prescribed maintenance of cost records under theprovisions of Section 148(1) of the Companies Act 2013 in respect of manufactureactivities of the Company. The Company has not maintained accounts and records of suchactivities as there are no manufacturing activity during the year.
(vii) (a) According to the information and explanations given to us the Company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding Provident Fund Employees State Insurance Income tax Wealth Tax Sales taxService tax Customs Duty Excise Duty Cess and other applicable material statutory duesapplicable it.
(b) According to the information and explanations given to us no un-disputed amountspayable in respect of wealth tax sales tax customs duty excise duty and cess were inarrears as at 31st March ' 2017 for period more than six months from the date theybecame payable expecting the following.
(c) According to the information and explanation given to us there are no dues of saletax income tax customs duty wealth tax excise duty and cess which have not beendeposited on account of any dispute except the following.
(viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has cleared all its loans with Bank and FinancialInstitutions during the year.
(ix) According to the information and explanations given to us and based on ourverification the Company has not raised moneys by way of public issue.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bythe management we report that no fraud on or by the Company has been noticed or reportedduring the year.
(xi) No managerial remuneration is paid by the Company during the year hence clause3(xi) is not applicable.
(xii) In our opinion the Company is not a chit fund or a nidhi / mutual benefit fund /society. Therefore the provisions of clause 3(xii) of the Order are not applicable to theCompany.
(xiii) In our opinion all the transactions with the related parties are in compliancewith section 177 and 188 of the Act where applicable and the details have been disclosedin the financial statements as required by applicable accounting standard.
(xiv) The Company has not made any preferential allotment of shares during the year.
(xv) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has notentered into any non-cash transaction with directors or persons connected with him.
(xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Annexure to the Independent Auditor's Report of even date on the Standalone financialstatements of LN
Industries India Limited.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of LNIndustries India Limited ("the Company") as of March 312017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's 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 Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 misstatements 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 controls 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 thattransaction 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 authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisitions 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 limitation 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 to 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 2016 based on theinternal controls 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.