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La Opala RG Ltd.

BSE: 526947 Sector: Industrials
NSE: LAOPALA ISIN Code: INE059D01020
BSE 00:00 | 05 Dec 413.00 -2.25
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NSE 00:00 | 05 Dec 412.25 -3.35
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OPEN 412.50
PREVIOUS CLOSE 415.25
VOLUME 10125
52-Week high 487.00
52-Week low 241.95
P/E 39.71
Mkt Cap.(Rs cr) 4,584
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 412.50
CLOSE 415.25
VOLUME 10125
52-Week high 487.00
52-Week low 241.95
P/E 39.71
Mkt Cap.(Rs cr) 4,584
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

La Opala RG Ltd. (LAOPALA) - Auditors Report

Company auditors report

To the Members of

La Opala RG Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of La Opala RG Limited("the Company") which comprise the Balance sheet as at March 31 2021 theStatement of Profit and Loss (including the Statement of Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information. (The "Financial Statements").

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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements' section of our report. We are independent of the Company inaccordance with the ‘Code of Ethics' issued by the Institute of Chartered Accountants(ICAI) of India together with the ethical requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2021. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how our auditaddressed the matter is provided in that context.

Basis for Opinion

Descriptions of Key Audit Matter How we addressed the matter in our audit
A. Non-Current Investment in Listed Company
Refer to Note 8 to the financial statements. Our procedures in respect of the valuation of listed investment included among others using our internal valuation specialists as part of our audit team to test the valuation inputs and assumptions for this significant listed investment in respect of:
The company hold listed investments which are carried at fair value through other comprehensive income (not to be recycled) and classified as level 2 financial instruments in the fair value hierarchy. The listed investments are included in "Investments" valued at Rs 16140.07 Lakh in the financial statements. We benchmarked inputs used for valuations to current market best practices in assessing the appropriateness of the methodologies applied.
Re-computation of the values and comparing it with valuer calculations and
Our procedures in respect of the classification of investment for accounting purposes included assessing if the company was able to exercise significant influence in respect of this investment by applying the criteria for recognition of an associate set out in IND AS 28 Investment in Associate. The criteria included amongst others assessing whether or not there was representation on the board of the investees participation in policymaking and material transactions etc.
Our Observation:
The share of Investee Company is listed at Calcutta stock exchange but no trading is being done accordingly no active market rate is available at which the investment is being valued. Consequently this listed investment is to be valued by using other available valuation technique as determined by the Independent Valuer. Net asset values method has been used for valuation of the captioned investment. The valuation of listed investments requires the exercise of judgement and the use of subjective assumptions made for valuation by the Valuer. We consider key assumptions and estimates to be within the acceptable range and we assessed the classification of investment and the disclosure (Refer Note: 38) to the financial statements is considered to be reasonable.
Given the significance of the judgements involved in the valuation and classification of listed investments this was considered a key audit matter in our audit of the financial statements.
B. Valuation of inventories
Refer to Note 12 to the financial statements. As described in the accounting policies in Note 1.2.F to the financial statements inventories are carried at the lower of cost and net realizable value. As a result the management applies judgment in determining the appropriate provisions for obsolete stock based upon a detailed analysis of old inventory net realizable value below cost based upon future plans for sale of inventory. We obtained assurance over the appropriateness of the management's assumptions applied in calculating the value of the inventories and related provisions by:
Completed a walkthrough of the inventory valuation process and assessed the design and implementation of the key controls addressing the risk.
Verifying the effectiveness of key inventory controls operating over inventories.
Verifying for a sample of individual products that costs have been correctly recorded.
Comparing the net realizable value to the cost price of inventories to check for completeness of the associated provision.
Reviewing the historical accuracy of inventory provisioning and the level of inventory write-offs during the year.
Recomputing provisions recorded to verify that they are in line with the Company policy.
Our Observation:
Based on the audit procedures performed we did not identity any material exceptions in the valuation of inventories.
C. Valuation and existence of current investments
Valuation and existence of current investments designated at fair value through profit or loss Investments designated at fair value through profit or loss (the Investments) are valued at Rs 29977.13 Lakh and represent 40.41 % of total assets. Further disclosures on the Investments are included at Note 8 to the financial statements. This was an area of focus for our audit and the area where significant audit effort was directed. As at March 31 2021 all Investments are in mutual funds and are actively traded with readily available net assets value. Our audit procedures included updating our understanding of the business processes employed by the Company for accounting for and valuing their investment portfolio. We obtained accounts confirmation from the mutual funds and verified that the company was the recorded owner of all current investments. Our audit procedures over the valuation of the Investments included agreeing the fair valuation of all Investments held at March 31 2021 to the Net Assets Value provided by the respective Mutual funds.
Our Observation:
Based on the audit procedures performed we did not identity any material exceptions in the valuation and existence of Current investments.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring 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.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those charged with governance are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 subsection (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; (b) In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; (c) The Balance Sheet the Statement of Profit and Lossincluding the Statement of Other Comprehensive Income the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account; (d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended from time to time; (e) On the basis of thewritten representations received from the directors as on March 31 2021 taken on recordby the Board of Directors none of the directors are disqualified as on March 31 2021from being appointed as a director in terms of Section 164(2) of the Act;

(f ) With respect to the adequacy of the internal financial controls over financialreporting with reference to financial statement of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".

(g) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid/ provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act; and

(h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous: I. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Note 40 to the financial statements; II. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses.

III. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Singhi & Co.

Chartered Accountants

Firm Registration Number: 302049E
(Navindra Kumar Surana)

Partner

Place: Kolkata Membership Number: 053816
Date: May 252021 UDIN:21053816AAAAEK8186

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of La Opala RG Limited of even date) i.In respect of the Company's fixed assets: a. The Company has maintained proper recordsshowing full particulars including quantitative details and situation of fixed assets. b.The Company has a program of verification to cover all the items of fixed assets in aphased manner over a period of 3 years which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. Pursuant to the program aportion of property plant & equipments were physically verified by the managementduring the year. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification. c. According to the information andexplanations given to us and on the basis of our examination of the records of theCompany the title deeds of immovable properties are held in the name of the Company asshown in Note No. 3 of the financial statements except 2 (two) cases of buildings withgross value of Rs 990.01 Lakh

(Net carrying amount Rs 938.14 Lakh) titles for which is pending registration. ii. Thephysical verification of inventory excluding inventories in transit have been conducted atreasonable intervals by the Management during the year. The discrepancies noted onphysical verification of inventory as compared to book records were not material. iii. TheCompany has not granted any loan to parties covered in the register maintained undersection 189 of the Companies Act 2013. Thus paragraph 3(iii) of the Order is notapplicable.

iv. In our opinion and according to the information and explanations given to us theCompany has not given any loan not made any investment and have not provided anyguarantee in respect of which Section 185 and 186 of the Companies Act 2013 areapplicable. Accordingly the paragraph 3(iv) of the Order is not applicable. v. TheCompany has not accepted deposits during the year and does not have any unclaimed depositsas at March 31 2021 and therefore the provisions of the clause 3 (v) of the Order arenot applicable to the Company. vi. Pursuant to the rules made by the Central Government ofIndia the Company is required to maintain cost records as specified under section 148(1)of the Act in respect of its product. We have broadly reviewed such accounts and recordsand are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained but no detailed examination of such records and accounts have beencarried out by us. vii. According to the information and explanations given to us and onthe basis of our examination of the books of account: a. The Company is generally regularin depositing undisputed statutory dues including Provident Fund Employee's StateInsurance Income Tax Customs Duty Goods and Service tax Cess and other statutory dueswith the appropriate authorities. According to the information and explanations given tous and the records of the Company examined by us no undisputed statutory dues as abovewere outstanding as at March 31 2021 for a period of more than six months from the datethey became payable b. According to the information and explanation given to us the duesof sales tax income tax and duty of excise which have not been deposited on account ofany dispute and the forum where the dispute is pending as on March 31 2021 are as under:

Name of the statute Nature of dues Amount Year Forum where dispute is pending
(Rs In Lakh)
Jharkhand VAT Act 2005 Sales Tax 5.12 2007-08 Commissioner of Commercial Tax Ranchi Jharkhand
Income Tax Act 1961 Income Tax 23.84 2011-12 Commissioner of Income Tax (Appeals) Kolkata
14.72 2012-13
35.70 2013-14
124.20 2015-16
54.17 2017-18
0.40 2012-13
The Central Excise Act 1944 Duty of Excise 4.28 2009-10 Customs Excise & Service Tax Appellate Tribunal Kolkata

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingto any financial institution or bank as at the Balance sheet date. The Company did nothave any borrowing from Government and dues to debenture holders as at balance sheet date.ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company. x. Based upon the audit procedure performedfor the purpose of reporting the true and fair view of the financial statements andaccording to the information and explanations given to us no fraud by the Company or nomaterial fraud on the Company by its officers or employees has been noticed or reportedduring the year. xi. The Company has paid/provided managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act. xii. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of the Order is not applicable to the Company. xiii. In our opinion and according tothe information and explanations given to us the Company is in compliance with Section177 and 188 of the Companies Act 2013 where applicable for all transactions with therelated parties and the details of related party transactions have been disclosed in thefinancial statements as required by the applicable Indian Accounting Standards. xiv.During the year the Company has not made any preferential allotment or private placementof shares or fully or partly paid convertible debentures and hence reporting under clause

3 (xiv) of the Order is not applicable to the Company. xv. In our opinion and accordingto the information and explanations given to us during the year the Company has notentered into any non-cash transactions with its Directors or persons connected to itsdirectors and hence provisions of section 192 of the Companies Act 2013 are notapplicable to the Company. xvi. The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Therefore the provisions of Clause 3(xvi)of the Order are not applicable to the company.

For Singhi & Co.

Chartered Accountants

Firm Registration Number: 302049E
(Navindra Kumar Surana)

Partner

Place: Kolkata Membership Number: 053816
Date: May 252021 UDIN:21053816AAAAEK8186

ANNEXURE ‘B' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of La Opala RG Ltd. of even date)

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 with referenceto financial statement of La Opala RG Limited ("the Company") as of March 312021 in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting with reference to financial statement based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting (the "Guidance Note") issued by the Institute ofChartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting with reference to financial statement 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 over financial reporting with reference to financialstatement and their operating effectiveness. Our audit of internal financial controls overfinancial reporting with reference to financial statement included obtaining anunderstanding of internal financial controls over financial reporting with reference tofinancial statement assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 with reference to financial statement.

Meaning of Internal Financial Controls over financial reporting with reference tofinancial statement

A company's internal financial control over financial reporting with reference tofinancial statement is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting with reference to financial statementincludes those policies and procedures that (1) pertain to the maintenance of recordsthat 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 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 acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Limitations of Internal Financial Controls over financial reporting with reference tofinancial statement

Because of the inherent limitations of internal financial controls over financialreporting with reference to financial statement including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting with reference to financial statement to future periodsare subject to the risk that the internal financial control over financial reporting withreference to financial statement may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

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 with reference to financial statement and such internal financialcontrols over financial reporting with reference to financial statement were operatingeffectively as at March 31 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For Singhi & Co.

Chartered Accountants

Firm Registration Number: 302049E
(Navindra Kumar Surana)

Partner

Place: Kolkata Membership Number: 053816
Date: May 252021 UDIN:21053816AAAAEK8186

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