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Lakshmi Automatic Loom Works Ltd.

BSE: 505302 Sector: Industrials
NSE: N.A. ISIN Code: INE718M01022
BSE 00:00 | 24 Sep 889.55 -36.55
(-3.95%)
OPEN

971.00

HIGH

971.00

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879.80

NSE 05:30 | 01 Jan Lakshmi Automatic Loom Works Ltd
OPEN 971.00
PREVIOUS CLOSE 926.10
VOLUME 392
52-Week high 1038.00
52-Week low 305.00
P/E 20.23
Mkt Cap.(Rs cr) 60
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 971.00
CLOSE 926.10
VOLUME 392
52-Week high 1038.00
52-Week low 305.00
P/E 20.23
Mkt Cap.(Rs cr) 60
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lakshmi Automatic Loom Works Ltd. (LAKAUTOLOOMS) - Auditors Report

Company auditors report

To

The Members of

M/s. Lakshmi Automatic Loom Works Limited

Report on the audit of standalone Financial Statements

Opinion

We have audited the standalone financial statements of LAKSHMI AUTOMATIC LOOM WORKSLIMITED ("the Company") which comprise the Balance Sheet as at March312020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Cash Flow Statement and for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information. (hereinafter referred to standalone financialstatements).

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 Companies Act 2013 ["the Act"] in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed underSection 133 of the Companies Act 2013 read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 the profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report. We have fulfilled theresponsibilities described in the Auditor's responsibilities for the audit of theStandalone financial statements section of our report including in relation to thesematters.

S.No Key Audit Matter Auditor's Response
1. Evaluation of uncertain tax positions Principal Audit Procedures
The Company did not have material uncertain tax positions other than an uncertain position of service tax dues under dispute which involves significant judgment to determine the possible outcome of these disputes. We obtained details of completed tax assessments and demands received from management. We analysed the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions.
Additionally we considered the effect of new information in respect of material uncertain tax positions and other uncertain position of service tax dues under dispute to evaluate whether any change was required to management's position on these uncertainties.

We have determined that there are no other key audit matters to communicate in ourreport.

Information other than the standalone 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 CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and those charged with governance for the standaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (INDAS) prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement 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.

The Board of Directors are also responsible for overseeing the company's financialreporting process.

Auditors' Responsibility

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism 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 order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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 standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 in terms of Section 143 (11) of the Act we give in Annexure"A" a statement on the matters specified in paragraphs 3 and 4 of the Orderto the extent applicable.

2. As required by Section 143 (3) of the Act based on our audit 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 appears from our examination of those books;

c) the balance sheet the statement of profit and loss (including other comprehensiveincome) statement of changes in equity and the cash flow statement dealt with by thisreport are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed 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 of theCompany as on March 31 2020 taken on record by the Board of Directors none of theDirectors are disqualified as on March 31 2020 from being appointed as a Directorin terms of Section 164 (2) of the Act;

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

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended:

The Company has not paid any remuneration to its Directors during the year exceptsitting fees and hence in our opinion and to the best of our information and according tothe explanations given to us reporting on whether the remuneration paid by the Company toits Directors during the year is in accordance with the provisions of Section 197 of theAct does not arise.

h) with respect to the other matters to be included in the Auditors' 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 standalone financial statements - Refer Note No 28 to thestandalone financial statements.

ii. The Company does not have any long-term contracts including derivative contractsfor which there 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 Subbachar & Srinivasan
Chartered Accountants
Firm Registration No. 004083S
(Sd.) T.S.V. Rajagopal
Partner
Coimbatore Membership No. 200380
June 25 2020 UDIN : 20200380AAAAHE3569

Annexure - "A" to the Independent Auditors' Report

(Referred to in Paragraph 1 under "Report on Other legal and regulatoryrequirements" section of our report to the members of LAKSHMI AUTOMATIC LOOM WORKSLIMITED of even date).

We report that

1. In respect of its Fixed Assets:

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

b. As explained to us fixed assets have been physically verified by the management atregular intervals in accordance with a programme of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals havingregard to the size of the Company and nature of its assets. According to the informationand explanations given to us no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and the records examinedby us the title deeds of all freehold immovable properties are held in the name of theCompany.

2. In respect of its inventories:

As explained to us physical verification of inventories has been conducted atreasonable intervals by the management during the year and no material discrepancies werenoticed.

3. The Company has not granted any loan secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013 during the Financial Year and hence sub-clauses(a) to (c) of clause (iii) of the Order are not applicable to the Company.

4. The Company has not granted loans or made investments or given guarantees andsecurities during the year and hence compliance with Section 185 and 186 are notapplicable.

5. The Company has not accepted any deposits from the public during the year to whichthe provisions of Sections 73 to 76 of the Act are applicable and as such clause 3(v) ofthe Order is not applicable.

6. The maintenance of cost records has not been specified by the Central Governmentunder Section 148(1) of the Companies Act 2013 read with the Companies (Cost Records andAudit) Rules 2014 for the business activities carried out by the Company. Thus reportingunder clause 3(vi) of the order is not applicable to the Company.

7. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in respect of the statutory dues:

a. The Company is regular in depositing undisputed statutory dues including ProvidentFund Employees' State Insurance Income Tax Sales Tax Service Tax Goods and ServiceTax Duty of Customs Duty of Excise Value Added Tax and any other statutory dues withthe appropriate authorities during the year. According to the information and explanationsgiven to us no undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at 31st March 2020 for a period of more than six monthsfrom the date they became payable.

b. According to the information and explanations given to us the details of disputedstatutory dues that have not been deposited on account of dispute is as under:

Name of Statute Nature of the Dues Amount (Rs. in Lakhs) Amount paid / adjusted (Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Central Excise Act/ Service Tax Act Service Tax 8.86 Nil February 2007 to September 2008 Customs Excise & Service Tax Appellate Tribunal Chennai.

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to any FinancialInstitution Bank Government or dues to Debenture holders.

9. In our opinion and according to the information and explanations given to us theCompany has utilized the money raised by way of term loan for the purposes for which itwas raised. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

10. To the best of our knowledge and belief and according to the information andexplanations given to us during the course of our examination of the books and records ofthe Company carried out in accordance with the auditing standards generally accepted inIndia no fraud on or by the Company was noticed or reported during the year that causesthe standalone financial statements to be materially misstated.

11. The Company has not paid any managerial remuneration during the year and hence therequirement of getting requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013 is not applicable.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has converted 200000 - 6% NonCumulative Optionally Convertible Preference Shares [OCPS] of Rs.100/- each into 291757Equity Shares of Rs.10/- each at a Premium of Rs.58.55 per share on preferential basis tothe Promoter group and the requirements of Section 42 and other applicable provisions ofthe Companies Act 2013 in this regard have been complied with.

15. 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 non-cashtransactions with Directors or persons connected with him. Accordingly clause 3(xv) ofthe Order is not applicable.

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

For Subbachar & Srinivasan
Chartered Accountants
Firm Registration No. 004083S
(Sd.) T.S.V. Rajagopal
Partner
Coimbatore Membership No. 200380
June 25 2020 UDIN : 20200380AAAAHE3569

Annexure - "B" to the Independent Auditors' Report

(Referred to in Paragraph 2(f) under "Report on Other legal and regulatoryrequirements" section of our report to the members of LAKSHMI AUTOMATIC LOOM WORKSLIMITED of even date).

Report on the Internal Financial Controls over Financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of LAKSHMIAUTOMATIC LOOM WORKS LIMITED as of 31st March 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 (‘ICAI'). 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 the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of Management and Directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Subbachar & Srinivasan
Chartered Accountants
Firm Registration No. 004083S
(Sd.) T.S.V. Rajagopal
Partner
Coimbatore Membership No. 200380
June 25 2020 UDIN : 20200380AAAAHE3569

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