To the Members of Lahoti Overseas Limited
Report on the Audit of the Standalone Ind AS Financial
We have audited the standalone financial statements of Lahofi OverseasLimited ("the Company") which comprise the Balance Sheet as at 31st March2021 the Statement of Profit and Loss (including Other Comprehensive Income) Statementof changes in equity Statement of Cash Flows for the year then ended and notes to thestandalone Ind AS financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone Ind AS financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2021 and profit ( including other comprehensive income) changes in equity and itscash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Companies Act 2013 and IND AS. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements Section of our report.We are independent of the Company in accordance with the Code of Ethics issued by TheInsfitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the Ind AS financial statements under the provisions of theCompanies Act 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Emphasis of Matter
We draw your attention to note no. 35 (b) of the Notes to Accounts thecompany is unable to provide us with the fair value of its Investment in Properties as onthe Balance Sheet date i.e. 31st March 2021 which is required to be disclosedas per Ind AS 116 on "Leases" issued by the Chartered Accountants of India. Thisbeing a mere disclosure requirement it has no financial impact on standalone financialsof the company
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
Description of Key Audit Matter
|The Key Audit Matter ||How the matter was addressed in our audit |
|Revenue Recognition: ||Our audit procedures included: |
|Revenue is measured net of discounts rebates earned by customers on the company's sales. ||Assessing the appropriateness of the revenue recognition accounting policies including those relating to discounts rebates and incentives by comparing with applicable accounting standards. |
|Due to company's presence across different marketing regions in various countries and the competitive business environment the estimation of the various types of discounts to be recognised based on sales made during the year is material and considered to be judgmental. ||Testing the design implementation and operating effectiveness of the Company's general IT controls over the Company's systems and manual controls which govern recording of revenue and discounts rebates and incentives in the general ledger accounting system. |
| ||Performing substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents which included s ales invoices/contracts and shipping documents. |
| ||Assessing manual journals posted to revenue to identify unusual items. |
Information other than the Financial Statement and Auditors ReportThereon
The Company's Management and Board of Directors is responsible for theother information. The other information comprises Board's Report Report on Corporategovernance but does not include standalone financial statements and auditor's reportthereon. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the standalone financial statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the standalone 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 Standalone Financial Statements
The Company's Management And Board of Directors is responsible for thematters stated in section 134(5) of the Companies Act 2013 ("the Act") withrespect to the preparation of these standalone Ind AS financial statements that give atrue and fair view of the financial position financial performance changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Ind AS) specified under section 133of the Act read with relevant rules issued thereunder. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of 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 design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statement that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements
Our objectives are to obtain reasonable assurance about whether the IndAS financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to standalonefinancial statements in place and the operating effectiveness 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 goingconcern basis 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 standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors' report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 of the Companies Act 2013 we give in the Annexure A a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss the Statementof changes in equity and the Cash Flow Statement dealt with by this Report are inagreement with the books of account.
d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
I. The Company does not have any pending litigations which would impactits financial position;
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company
For and on behalf of
Annexure - A to the Independent Auditor's Report
The Annexure referred to in Independent Auditor's Report to the membersof the Company on the standalone Ind AS financial statements for the year ended 31st March2021 we report that:
I. a. In our opinion the Company has maintained proper records showingfull particulars including quantitative details and situation of Property Plant andEquipment.
b. As explained to us physical verification of Property Plant andEquipment is being conducted in a phased programme by the management designed to cover allthe assets at reasonable intervals which in our opinion is reasonable having regard tothe size of the Company and the nature of assets. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
ii. As explained to us physical verification of inventory has beenconducted at reasonable intervals by the management and discrepancies noticed on suchphysical verification between physical stocks and book records were not materialconsidering the operations of the Company and the same have been properly dealt with inthe books of account.
iii. In our opinion and according to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured to anycompanies firms Limited Liability Partnerships or other parties as covered in theregister maintained under Section 189 of the Act. Accordingly clause 3 (iii) (a) (b) and(c) of the order are not applicable.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theAct with respect to loans investments and guarantees made.
v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposit within the meaning of Section 73 to76 of the Act and the rules framed thereunder.
vi. The Central Government has not prescribed the maintenance of costrecords under Section 148(1) of the Act for any of the services rendered by the Company.
a. According to the records of the Company and the information andexplanations given to us the Company has generally been regularly depositing with theappropriate authorities undisputed statutory dues including Provident Fund EmployeesState Insurance Income tax Sales-Tax Duty of Customs Duty of Excise Value added TaxGoods and Service Tax Cess and any other statutory dues applicable to it. There are noundisputed statutory dues as referred to above as at 31st March 2021 outstanding for aperiod of more than six months from the date they become payable.
b. According to the information and explanations given to us the duesin respect of Sales Tax Duty of Customs Excise Duty Service Tax and Goods and ServiceTax is not pending. Dues in respect of Income Tax that have not been deposited with theappropriate authority on account of dispute and the forum where the disputes are pendingare given below:
|Name of Statue ||Nature of Dues ||Amount (Rupees in Lakhs) ||Period to which the amount relates (Previous years) ||Forum where the dispute is pending |
|Income Tax Act ||Income Tax (including Interest) ||90.27 ||2013-14 ||CIT(Appeals) |
| || ||334.92 ||2016-17 ||CIT(Appeals) |
Viii. Based on our audit procedures and according to the informationand explanations given by the management the Company has not defaulted in repayment ofloans from bank. Further as per the records of the Company during the year there were noloans or borrowings from any financial institution government or debenture holders.
iX. In our opinion and according to the information and the explanationgiven to us the term loans have been applied for the purposes for which they wereobtained. Further as per the records the company did not raise any money by way ofinitial public offer or further public offer or further public offer (including debtinstruments ).
X. Based upon the audit procedures performed and to the best of ourknowledge and belief and according to the information and explanations given to us nofraud by the company or any fraud on the Company by its officers or employees has beennoticed or reported during the year.
Xi. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
Xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
Xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable Indian Accounting Standards.
Xiv. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph
3(xiv) of the Order is not applicable.
XV. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered into noncash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
xvi. Based upon the audit procedures performed and the information andexplanations given by the management the Company has not entered into any non-cashtransactions with directors or persons connected with him hence the provision of clause(xv) of the order is not applicable.
xvii. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Annexure - B to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Lahoti Overseas Limited ("the Company") as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to 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 Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an internal financialcontrols with reference to financial statements as at 31st March 2021 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 |
|N. G. THAKRAR & CO. |
|(Firm Regn. no. 110907W) |
|Chartered Accountants |
|NATWAR G. THAKRAR |
|Membership No.: 036213 |
|UDIN 21036213AAAACO5008 |
|Date: 30th June 2021 |