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Loyal Textile Mills Ltd.

BSE: 514036 Sector: Industrials
NSE: N.A. ISIN Code: INE970D01010
BSE LIVE 11:20 | 15 Dec 674.00 28.00
(4.33%)
OPEN

670.00

HIGH

675.00

LOW

670.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 670.00
PREVIOUS CLOSE 646.00
VOLUME 121
52-Week high 889.95
52-Week low 561.10
P/E 14.42
Mkt Cap.(Rs cr) 325
Buy Price 646.00
Buy Qty 1.00
Sell Price 674.00
Sell Qty 3.00
OPEN 670.00
CLOSE 646.00
VOLUME 121
52-Week high 889.95
52-Week low 561.10
P/E 14.42
Mkt Cap.(Rs cr) 325
Buy Price 646.00
Buy Qty 1.00
Sell Price 674.00
Sell Qty 3.00

Loyal Textile Mills Ltd. (LOYALTEXTILE) - Auditors Report

Company auditors report

To

The Members of

LOYAL TEXTILE MILLS LIMITED

KOVILPATTI.

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of M/s. LOYAL TEXTILEMILLS LIMITED ('the Company') which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of Significant Accounting Policies and other explanatory information.

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 of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's 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 the order and the Rules made thereunder. We conducted ouraudit in accordance with the Standards on Auditing specified under Section 143(10) of theAct. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom 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.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone 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 state of affairs of the Companyas at 31stMarch 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1 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 on31stMarch 2017 and taken on record by the Board of Directors none of the Directors isdisqualified as on 31stMarch 2017 from being appointed as a Director in terms of Section164(2) of the Act; and

(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"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 Auditors) Rules 2014 in our opinionand to the best 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 - Refer Note No. 28 to the financial statements;

(ii) the Company did not have any long-term contracts including derivative contracts;and

(iii) there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

(iv) The Company has provided requisite disclosure in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on the audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with the books of accountmaintained by the Company and as produced to us by the Management Refer Note. 41.

2 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 "B" a statement on the matters specified in theParagraphs 3 and 4 of the Order to the extent applicable.

For Suri & Co.
Chartered Accountants
Firm Regn. No. 004283S
R.Krishnamoorthy
Place : Chennai Partner
Date : 29.05.2017 Membership No. 020695

ANNEXURE "A" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Loyal Textile Mills Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section (3) ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of LoyalTextile Mills Limited ("the Company") as of March 31 2017 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's 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 2013.

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 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 included obtaining anunderstanding of internal financial controls over financial reportingassessing 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 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:

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) 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

(iii) 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.

Opinion

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 Suri & Co.
Chartered Accountants
Firm Regn. No. 004283S
R.Krishnamoorthy
Place : Chennai Partner
Date : 29.05.2017 Membership No. 020695

Annexure "B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Loyal Textile Mills Limited.

The Annexure referred to in Paragraph 2 under the heading"Report on Other Legaland Regulatory Requirements" of our Report of even date:

(i)

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

b) According to the information and explanations given to us the fixed assets at alllocations have been physically verified by the Management at reasonable intervals andnomaterial discrepancies were noticed on such verification.

c) According to the information and explanations given to us the title deeds ofimmovable properties as disclosed in Note No. 9 to the Standalone Financial Statementsare held in the name of the Company except for the following:

Particulars Free hold Lease hold
(Rs. in Lakhs) (Rs. in Lakhs)
Gross Block as at 31 March 2017 Nil 165.23
Net Block as at 31 March 2017 Nil 161.90

(ii) As explained to us the inventories at all locations have beenphysically verifiedby the Management at regular intervalsduring the year.The discrepancies noticed onphysical verification of stocks as compared to book records were not material and thesame have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loan secured or unsecured tothe companies firms limitedliability partnership or other parties listed in the register maintained under section 189of the Companies Act 2013.

(iv) The Company has not granted any loan or provided any guarantee or security to theparties covered under Sections 185 and 186 of the Act.In respect ofinvestment insecurities the company has complied with the provisions of section 186 of the Act.

(v) The Company has not accepted any deposits from the public during the year as perthe provisions of section 73 and 76 of the Companies Act 2013. The company hasaccepted/taken interest free inter corporate deposit from a company.

(vi) We have broadly reviewed the cost records maintained by the company as prescribedby the Central Government under Sub-section (1) of Section 148 of the Companies Act 2013andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. We have however not made a detailed examination of the records with aview to determine whether they are accurate or complete.

(vii)

(a) According to the information and explanations given to usthe Company has beenregular in depositing undisputed statutory dues including Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax Duty of Customs Duty of ExciseValue Added Tax Cess andany other Statutory Dues to the appropriate authorities.Inrespect of undisputed Statutory dues payable in respect of above which are outstanding asat 31st March 2017 for a period of more than six months from the date they became payableis given below:

Nature of dues Amount (Rs. in Lakhs)
Advance Licensing 57.11

(b) According to the information and explanations given to us there are no dues ofincome tax service tax duty of customs duty of excise value added tax which have notbeen deposited on account of any dispute. In respect of sales tax which are pendingpayment on account of dispute the information of which is given below :

Name of the Statute Amount Period to which the dues belong Forum where the dispute is pending
(Rs. in Lakhs)
Sales Tax 284.22 A.Y 2002 - 03 2003-04 2005-06 2007-08 2008-09 2009-10 2010-11 2013-14 2014-15 Additional Deputy Commissioner / Joint Commissioner of Sales Tax and Sales Tax Appellate Tribunal

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to financial institutions or banks orGovernment. Thecompany has not issued any debenture.

(ix) The Company did not raise any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. The term loans taken during theyear are applied for the purposes for which the term loans were obtained.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its Officers or employees or reported during the year.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid or provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act.

(xii) The Company not being a Nidhi Companythe requirements of paragraph 3(xii) of theorder is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the transactions with the related parties arein compliance with Sections 177 and 188 of Companies Act 2013 where applicable and thedetails of such transactions have been disclosed in the Financial Statements as requiredby the applicable Accounting Standards.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the company has not entered into any non-cashtransactions with Directors or persons connected with him.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Suri & Co.
Chartered Accountants
Firm Regn. No. 004283S
R.Krishnamoorthy
Place: Chennai Partner
Date : 29.05.2017 Membership No. 020695