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Lakshmi Machine Works Ltd.

BSE: 500252 Sector: Industrials
NSE: LAXMIMACH ISIN Code: INE269B01029
BSE 00:00 | 18 Oct 3629.80 -0.45
(-0.01%)
OPEN

3645.05

HIGH

3732.35

LOW

3600.05

NSE 00:00 | 18 Oct 3624.80 -1.15
(-0.03%)
OPEN

3639.95

HIGH

3734.35

LOW

3601.05

OPEN 3645.05
PREVIOUS CLOSE 3630.25
VOLUME 1073
52-Week high 6431.40
52-Week low 3147.25
P/E 22.50
Mkt Cap.(Rs cr) 3,877
Buy Price 3629.80
Buy Qty 5.00
Sell Price 3629.80
Sell Qty 22.00
OPEN 3645.05
CLOSE 3630.25
VOLUME 1073
52-Week high 6431.40
52-Week low 3147.25
P/E 22.50
Mkt Cap.(Rs cr) 3,877
Buy Price 3629.80
Buy Qty 5.00
Sell Price 3629.80
Sell Qty 22.00

Lakshmi Machine Works Ltd. (LAXMIMACH) - Auditors Report

Company auditors report

TO THE MEMBERS OF LAKSHMI MACHINE WORKS LIMITED

Report on the Audit of the Standalone Ind AS financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statementsof Lakshmi Machine Works Limited ("the Company") which comprise the BalanceSheet as at 31st March 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and a summary of the significant accounting policies andother explanatory information (hereinafter referred to as "the standalone Ind ASfinancial 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 Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31st March2019 the profit and total comprehensive income changes in equity and its cash flows forthe year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the CompaniesAct 2013. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Ind AS financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India(ICAI) together with theindependence requirements that are relevant to our audit of the standalone Ind ASfinancial statements under the provisions of the Act and the Rules made thereunder 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 standalone IndAS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not providea separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

KEY AUDIT MATTER RESPONSE TO KEY AUDIT MATTER
Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard.
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Accuracy of revenues and onerous obligations in respect of fixed price contracts. • Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• It is observed that transaction price charged is exworks price and revenue is booked at the time of dispatch of the goods.
• The above method followed by the company is in line with the provisions of Ind AS 115-'Revenue from contracts with customers'
Conclusion: We agree with the management's evaluation. In the process of verifying the accuracy of recognition of revenues of fixed price contracts we have undertaken the following audit approach
• Understood evaluated and tested the key controls over the recognition of revenue from fixed price contracts. We selected a sample of transactions and
• Agreed the applied tariff to the respective terms in the contract.
• Tested revenue calculations and agreed the revenue recognized to the underlying accounting records.
Conclusion: We agree with the management's evaluation.
Assessment of carrying value of investments The company has invested in listed equity instruments and debt instruments. We consider this a key audit matter given the relative significance of the value of investments. Our procedures in relation to assessing the carrying value of investments include the following observations.
• The equity investments are carried at fair value as on 31st March 2019.
• Due to market fluctuation there has been significant value reduction in the equity investments.
• The company has also invested in debt oriented mutual funds and the same has also been recognized at fair market value as on 31st March 2019.
Conclusion: We agree with the management's evaluation

Information Other than the Standalone Ind AS financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone Ind AS financial statements and our auditor's reportthereon.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone Ind ASfinancial 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 conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and those charged with governance forthe standalone Ind AS financial statements

The Company's Board of Directorsis responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS) prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind ASfinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

A further description of the auditor's responsibilities for the auditof the standalone Ind AS financial statements is included in Annexure "A". Thisdescription forms part of our auditor's report.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereportthat:

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 including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Ind AS specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Ruies2014.

e) On the basis of the written representations received from thedirectors as on 31st March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2019 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". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) 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 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 itsfinancial position in its standalone Ind AS financial statements - Refer Note 31.1 toStandalone Ind AS financial Statements.

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 - Refer Note 19 to Standalone Ind AS financialStatements.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the Annexure "C" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

For S. KRISHNAMOORTHY & Co.
Chartered Accountants
Firm Registration No.001496S

 

K.Raghu
Coimbatore Partner
20th May 2019 Membership No.11178

Annexure "A"

To the Independent Auditor's report

Responsibilities for Audit of Standalone 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 Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate 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 financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace 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 statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone Ind ASfinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

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 standalone IndAS financial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's 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.

For S. KRISHNAMOORTHY & Co.
Chartered Accountants
Firm Registration No.001496S

 

K.Raghu
Partner
Membership No.11178
Coimbatore
20th May 2019

Annexure "B"

To the Independent Auditor's report

(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' of the Independent Auditors' Report to the membersof the company on the Standalone Ind AS financial Statements for the year ended on 31stMarch 2019)

Report on the Internal financial Controls Over financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of LAKSHMI MACHINE WORKS LIMITED ("the Company") as of 31st March2019 in conjunction with our audit of the standalone Ind AS financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining 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. 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 financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal financial Controls Overfinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

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 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could 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.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 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 S. KRISHNAMOORTHY & Co.
Chartered Accountants
Firm Registration No.001496S

 

K. Raghu
Partner
Membership No.11178
Coimbatore
20th May 2019

Annexure "C"

To the Independent Auditor's report

(Referred to in paragraph under 'Report on Other Legal andRegulatory Requirements' of the Independent Auditors' Report to the membersof the company on the Standalone Ind AS financial Statements for the year ended on31st March 2019).

According to the information and explanations sought by us and given bythe company and the books and records examined by us during the course of our Audit and tothe best of our Knowledge and belief we report the following:

i. In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The fixed assets of the company have been physically verified in aphased periodical manner by the management which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. No material discrepancieswere noticed on such verification.

(c) The title deeds of all the immovable properties of the companyshown under the Fixed Assets as at the balance sheet date are held in the name of theCompany.

ii. The physical verification of inventory has been conducted by themanagement at reasonable intervals. The Company has maintained proper record of inventoryand no material discrepancies were noticed on the physical verification of inventories ascompared to the book records.

iii. The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013 during the financial year.

iv. The Company has not granted loans or made investments or givenguarantees and securities during the year and hence compliance with section 185 and 186are not applicable.

v. The Company has not accepted deposits during the year and does nothave any unclaimed deposits as at 31st March 2019 and therefore the provisions of theclause 3 (v) of the Order are not applicable to the Company.

vi. The Central Government has prescribed the maintenance of costrecords under section 148(1) of the Act. We have broadly reviewed the accounts and recordsof the company in this connection and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have not however carried out adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

vii. According to the information and explanations given to us inrespect of statutory dues:

(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Goodsand Service Tax Customs Duty Cass and other material statutory dues applicable to itwith the appropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Goods and Service Tax Customs Duty Cessand other material statutory dues in arrears as at 31st March 2019 for a period of morethan six months from the date they became payable.

(c) The details of disputed statutory dues are as under:

Name of the Statue Nature of the dues Amount ( र In Lakhs) Amount paid/ adjusted ( र In Lakhs) Forum where dispute is pending ( र In Lakhs)
Central Excise Act1944 Excise Duty Service Tax and 2462.81 Customs Duty 152.42 Appellate authorities Up to Commissioner's Level - र121.15
CESTAT - र2325.32
High Court - र16.33
Income Tax Act 1961 Income tax and 327.22 Interest 327.22 CIT(A) - र252.53
ITAT - र74.69

viii. The Company has not taken any loans or borrowings from financialinstitutions banks and government or has not issued any debentures. Hence reporting underclause 3 (viii) of the Order is not applicable to the Company.

ix. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments) or term loans and hence reporting underclause 3 (ix) of the Order is not applicable to the Company.

x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company or no material fraud on the Company byits officers or employees has been noticed or reported during the year.

xi. In our opinion the Company has paid/provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting underclause 3 (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the standalone Ind AS financialstatements as required by the applicable accounting standards.

xiv. During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly paid convertible debenturesand hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its Directors or persons connected to its directors and hence provisions of section192 of the Companies Act 2013 are not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For S. KRISHNAMOORTHY & Co.
Chartered Accountants
Firm Registration No.001496S

 

K.Raghu
Partner
Membership No.11178
Coimbatore
20th May 2019