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Lotus Chocolate Company Ltd.

BSE: 523475 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE026D01011
BSE 15:27 | 21 Feb 50.95 0.95
(1.90%)
OPEN

52.00

HIGH

52.00

LOW

48.15

NSE 05:30 | 01 Jan Lotus Chocolate Company Ltd
OPEN 52.00
PREVIOUS CLOSE 50.00
VOLUME 735
52-Week high 55.45
52-Week low 16.15
P/E 36.39
Mkt Cap.(Rs cr) 65
Buy Price 48.15
Buy Qty 1851.00
Sell Price 50.95
Sell Qty 747.00
OPEN 52.00
CLOSE 50.00
VOLUME 735
52-Week high 55.45
52-Week low 16.15
P/E 36.39
Mkt Cap.(Rs cr) 65
Buy Price 48.15
Buy Qty 1851.00
Sell Price 50.95
Sell Qty 747.00

Lotus Chocolate Company Ltd. (LOTUSCHOCOLATE) - Auditors Report

Company auditors report

To the Members of Lotus Chocolate Company Limited.

1. Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Lotus ChocolateCompany Limited (‘the Company') which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

2. 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 preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flow of the Company in accordancewith accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with relevant rules issued there under. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

3. Auditors' Responsibility

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 under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement. An audit involves performing procedures toobtain evidence about the amounts and the disclosures in the financial statements. Theprocedures selected depend on the auditors' judgment including assessment of risks ofmaterial misstatement of the financial statements whether due to fraud or error. Inmaking those risk assessments the auditor considers internal financial control relevantto the Company's preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies and the reasonablenessof the accounting estimates made by the Company's Directors 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 on the standalone financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in accordance with the accountingprinciples generally accepted in India: (i) In the case of Balance Sheet of the state ofaffairs as at March 31 2017; (ii) In the case of Statement of Profit and Loss of LOSS forthe year ended on that date; and (iii) In the case of Cash Flow Statement of its cash flowfor the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

(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 a statement on the matters specified in the Paragraph3 and 4 of the Order.

(2) As required 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 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 withAccounting Standards specified under Section 133 of the Act read with Rule 7 of Companies(Accounts) Rules 2014

(e) On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct

(f) With respect to adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B; and

(g) With respect to other matters to be included in the Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements vide Note No. 29 of Notes to the FinancialStatements.

(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable looses.

(iii) According to the records of the Company no amount is required to be transferredto the Investor Education and Protection Fund during the year.

(iv) The Company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 31 to the standalone financial statements.

Place: Hyderabad

Date: 12.06.2017

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Paragraph 5 (1) of Independent Auditors' Report to theMembers of Lotus Chocolate Company Limited On the standalone financial statements for theyear ended on March 31 2017

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a phased programme of physical verification of Fixed Assets whichin our opinion is reasonable having regard to the size of the Company and nature of itsbusiness. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties are held inthe name of the Company

2. The Inventory of finished goods raw materials stores spare parts except thosein transit and with third parties have been physically verified by the management at theyear end. We consider that the frequency of the verification is reasonable having regardto the nature of business and size of the Company. No material discrepancies were noticedon physical verification.

3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Act. Thereforethe provisions of Clause 3(iii) (iii)(a) and (iii)(b) of the said Order are notapplicable to the Company.

4. According to the information and explanations given to us the provisions ofSections 185 and 186 of the Companies Act 2013 in respect of grant of loans makinginvestments and providing guarantees are not applicable to the Company.

5. According to the information and explanations given to us the Company has notaccepted any deposits during the year and hence compliance with the provisions of Sections73 to 76 of the Act and the Companies (Acceptance of Deposit) Rules 2014 as amended withregard to acceptance of deposits are not applicable to the Company.

6. According to the information and explanations given to us maintenance of costrecords is not prescribed for the activities/products manufactured by the Company; hencethe matters relating to the maintenance of cost records are not applicable.

7. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-tax and Sales Tax ServiceTax Value Added Tax Customs Duty Excise Duty Cess and other material statutory duesapplicable to it to the appropriate authorities. According to the records of the Companyand information and explanations given to us none of these undisputed taxes are in arrearsas at March 31 2017 for a period exceeding six month from the date they become payable.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of Income Tax Sales Tax Service Tax CustomDuty Excise Duty and Cess which have not been deposited on account of any dispute. Theparticulars of dues of Customs Duty as at 31st March 2017 which have not been depositedon account of a dispute are as follows:

Name of Statute Nature of dues Amount (Rs in Lakhs) Period to which it relates Forum where pending
Customs Customs Duty 319.04 1996-1997 High Court Chennai
Customs Customs Duty 180.00 1996-1997 Appellate Tribunal Chennai

8. According to the information and explanations given to us we are of the opinionthat the Company has not defaulted in the repayment of dues to financial institutionsbanks government and the Company has not issued any debentures.

9. The Company has not raised any money by way of initial public offer or furtherpublic offer or by way of term loans during the year hence clause (ix) of Companies(Auditor's Report) Order 2016 (CARO) is not applicable.

10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers has beennoticed or reported during the year.

11. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act

12. The Company is not NIDHI company hence clause (xii) of CARO is not applicable tothe Company

13. According to the information and explanations furnished to us and based on ourexamination of books and records we are of the opinion that all transactions with relatedparties are in compliance with sections 177 and 188 of the Companies Act 2013 and all thedetails have been disclosed in the financial statements as per applicable AccountingStandards.

14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with them during the year and hence provisions of Section 192 of the CompaniesAct 2013 are not applicable.

16. The Company is not required to be registered under Section 45-1A of the ReserveBank of India.

Place: Hyderabad

Date: 12.06.2017

ANNEXURE-B TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Paragraph 5 (2) (f) of Independent Auditors' Report to theMembers of Lotus Chocolate Company Limited On the standalone financial statements for theyear ended on March 31 2017

Report on the Internal Financial Controls over Financial Reporting under clause (i) ofsub section 3 of Section 143 of the Companies Act 2013

1. We have audited the internal financial controls over financial reporting of LotusChocolate Company Limited (the Company) as at March 31 2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

2. Management's Responsibility:

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal financial control over financial reportingcriteria established by the Company considering the essential components of control statedin the "Guidance Note on Audit of Internal Financial Controls Over FinancialReporting" issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets and the timely preparation of reliable financial information as requiredunder the Companies Act 2013.

3. Auditor's Responsibility:

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 FinancialReporting" (Guidance Note) issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143 (10) of the Companies Act2013 to the extent applicable to an audit of Internal Financial Controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the 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 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 material weakness exists and testing and evaluating the designand operating effectiveness of internal financial control based on assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatements 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 overfinancial reporting.

4. 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 andexpenditure of the company are being made only in accordance with authorisations ofmanagement and directions 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 material effect on the financial statements.

5. 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

6. Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlsover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2017 based on "the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal controls stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia".

Place: Hyderabad

Date: 12.06.2017