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Lakshmi Electrical Control Systems Ltd.

BSE: 504258 Sector: Engineering
NSE: LAKSELECON ISIN Code: INE284C01018
BSE 00:00 | 24 Sep 439.75 4.00
(0.92%)
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446.95

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446.95

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NSE 05:30 | 01 Jan Lakshmi Electrical Control Systems Ltd
OPEN 446.95
PREVIOUS CLOSE 435.75
VOLUME 2779
52-Week high 485.00
52-Week low 192.00
P/E 13.26
Mkt Cap.(Rs cr) 108
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 446.95
CLOSE 435.75
VOLUME 2779
52-Week high 485.00
52-Week low 192.00
P/E 13.26
Mkt Cap.(Rs cr) 108
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lakshmi Electrical Control Systems Ltd. (LAKSELECON) - Auditors Report

Company auditors report

To the Members of LAKSHMI ELECTRICAL CONTROL SYSTEMS LIMITED

Report on the audit of standalone Financial Statements Opinion

We have audited the standalone financial statements of LAKSHMI ELECTRICAL CONTROLSYSTEMS LIMITED ("the Company") which comprise the Balance Sheet as at March31 2021 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 2021 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 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 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.

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 uncertain position of statutory dues of indirect taxes and electricity generation tax under dispute which involves significant judgment to determine the possible outcome of these disputes. We obtained details of completed tax assessments demands received and latest rulings of appellate forums from the 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 and electricity generation tax.
Additionally we considered the effect of new information in respect of material uncertain tax positions and other uncertain position of statutory dues of indirect taxes and electricity generation tax under dispute to evaluate whether any change was required to management’s position on these uncertainties.
2. Assessment of carrying value of Investments Principal Audit Procedures
The Company has invested in listed equity instruments and mutual funds. The evaluation of their fair values is considered as a key audit matter given the relative significance of the value of investments and the fluctuations in their fair values. Our audit procedures in relation to assessing the carrying value of these investments include ascertaining from relevant external sources that the equity instruments and the mutual funds are carried at fair value as on 31st March 2021. In line with general market fluctuations there are significant fair value changes in these investments. We agree with the management’s evaluation of the fair values as at the balance sheet date read with the disclosures by the management in note on Investments [Refer Note No.6].

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 ReportThereon

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 ReportCorporate Governance and Shareholder’s Information but does not include thestandalone financial statements and our auditor’s report thereon. Our opinion on thestandalone financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon. In connection with our audit of the standalonefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information we are required to reportthat fact. We have nothing 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 Section134 (5) of the Companies Act 2013 ("the Act") with respect to the preparationof these 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 thecompany’s financial reporting 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. 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 standalone financial statements.

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

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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 the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists 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 theCompany to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. Materiality is themagnitude of misstatements in the standalone financial statements that individually or inaggregate makes it probable that the economic decisions of a reasonably knowledgeableuser of the standalone financial statements may be influenced. We consider quantitativemateriality and qualitative factors in

(i) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

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 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 aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be 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 ("theOrder") issued by the Central Government in terms of Section 143 (11) of the Act wegive in Annexure "A" a statement on the matters specified in paragraphs 3and 4 of the Order to 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 bythis report 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 ofthe Companies (Accounts) Rules 2014;

e) On the basis of the written representations received from the directors of theCompany as on March 31 2021 taken on record by the board of directors noneof the directors are disqualified as on March 31 2021 from being appointed asa director in 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 toour separate 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: In ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Companies Act 2013. Theremuneration paid to any director is not in excess of the limit laid down under Section197 of the Act. The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) which are required to be commented upon by us.

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 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note No 39 to the standalonefinancial statements.

ii The Company does not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses

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

Place : Coimbatore For M/s Subbachar & Srinivasan
Date : May 28 2021 Chartered Accountants
Firm Registration No.004083S
(T.S.V.RAJAGOPAL)
Partner
Membership No. 200380
UDIN: 21200380AAAAHI8818

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 ELECTRICAL CONTROLSYSTEMS LIMITED of even date).

We report that

1. In respect of its Fixed Assets [Property Plant and Equipment]:

a. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets [Property Plant and Equipment].

b. As explained to us fixed assets [Property Plant and Equipment] have beenphysically verified by the management at regular intervals in accordance with aprogramme of verification which in our opinion provides for physical verificationof all the fixed assets at reasonable intervals having regard to the size of the companyand nature of its assets. According to the information and explanations given tous 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 immovable properties are held in the name of the Company.

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 given any guarantee or provided any security ormade any investments in any body corporate during the year and hence compliance withSection 185 and 186 are not applicable.

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. We have broadly reviewed the cost records maintained by the company specified by theCentral Government under subsection (1) of Section 148 of the Companies Act 2013 asapplicable to the company and are of the opinion that prima facie the specified costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

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 Duty of customs Goods andService Tax and any other statutory dues with the appropriate authorities duringthe year. According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at 31st March 2021 for aperiod of more than six months from 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 the 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 9.18 0.92 2011-12 to 2014-15 CESTAT
The Tamilnadu Tax on Consumption or sale of Electricity Act 2003 Electricity Tax 33.27 NIL 2007-08 and 2009-10 to 2012-13 High Court
Income Tax Act 1961 Income Tax & Interest 49.28 1.08 Assessment Year 2017-18 & 2018-19 Commissioner (Appeals)

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 not raised any money by way of term loans or by way of initial public offer orfurther public offer (including debt instruments) during the year and hence clause 3(ix)of the Order is not applicable to the company.

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. According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid / provided for managerialremuneration during the year read with the requisite terms of approvals as mandated bythe provisions of section 197 and read with Schedule V to the Companies Act 2013.

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 not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

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 undersection 45-IA of the Reserve Bank of India Act 1934.

Place : Coimbatore For M/s Subbachar & Srinivasan
Date : May 28 2021 Chartered Accountants
Firm Registration No.004083S
(T.S.V.RAJAGOPAL)
Partner
Membership No. 200380
UDIN: 21200380AAAAHI8818

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 ELECTRICAL CONTROLSYSTEMS LIMITED 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 haveaudited the internal financial controls over financial reporting of LAKSHMI ELECTRICALCONTROL SYSTEMS LIMITED as of 31st March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended 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 (‘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 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 obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’s judgment includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of standalone financial statements for external purposes in accordancewith generally accepted accounting principles. A company’s internal financial controlover financial reporting includes those policies and procedures that

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

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material 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 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 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

Place : Coimbatore For M/s Subbachar & Srinivasan
Date : May 28 2021 Chartered Accountants
Firm Registration No.004083S
(T.S.V.RAJAGOPAL)
Partner
Membership No. 200380
UDIN: 21200380AAAAHI8818

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