You are here » Home » Companies » Company Overview » Lakshmi Machine Works Ltd

Lakshmi Machine Works Ltd.

BSE: 500252 Sector: Industrials
NSE: LAXMIMACH ISIN Code: INE269B01029
BSE 00:00 | 19 Jan 5072.65 59.00
(1.18%)
OPEN

5040.00

HIGH

5159.00

LOW

5040.00

NSE 00:00 | 19 Jan 5075.25 56.50
(1.13%)
OPEN

5043.85

HIGH

5165.00

LOW

5043.00

OPEN 5040.00
PREVIOUS CLOSE 5013.65
VOLUME 309
52-Week high 5346.00
52-Week low 2001.00
P/E 475.86
Mkt Cap.(Rs cr) 5,418
Buy Price 5072.65
Buy Qty 9.00
Sell Price 5130.00
Sell Qty 3.00
OPEN 5040.00
CLOSE 5013.65
VOLUME 309
52-Week high 5346.00
52-Week low 2001.00
P/E 475.86
Mkt Cap.(Rs cr) 5,418
Buy Price 5072.65
Buy Qty 9.00
Sell Price 5130.00
Sell Qty 3.00

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 statements of LakshmiMachine Works Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone Ind AS financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at 31st March 2020 theprofit and total comprehensive income changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India(ICAI) together with the independencerequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind ASfinancial 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.

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.
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. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
• Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• It is observed that transaction price charged is ex- works 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.
Accuracy of revenues and onerous obligations in respect of fixed price contracts. 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 Our procedures in relation to assessing the carrying value of investments include the following observations.
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. • The equity investments are carried at fair value as on 31st March 2020.
• 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 2020.
• During the year the Company has invested in Non- Convertible Debentures which has been recognised at amortised cost as on 31st March 2020.
Conclusion:
We agree with the management's evaluation

Information Other than the Standalone Ind AS 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 Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto 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 standalone IndAS financial statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements 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 judgements 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 is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 Ind AS financial statements.

A further description of the auditor's responsibilities for the audit of the standaloneInd AS financial statements is included in Annexure "A". This description formspart 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 we reportthat:

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 it 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 Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theInd AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended Inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements – Refer Note 31.1 toStandalone Ind AS Financial Statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 19 to Standalone Ind AS Financial Statements.

iii. There has been no delay in transferring amounts required to be transferred tothe 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 ofthe Companies Act 2013 we give in the Annexure "C" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

For S. Krishnamoorthy & Co.
Chartered Accountants
Firm Registration No. 001496S
K Raghu
Partner
Place: Coimbatore Membership No. 011178
Date: 25th May 2020 UDIN: 20011178AAAABV9886

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 professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

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

• Evaluate the appropriateness of accounting policies used and 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 statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions 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 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 Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

For S. Krishnamoorthy & Co.
Chartered Accountants
Firm Registration No. 001496S
K Raghu
Partner
Place: Coimbatore Membership No. 011178
Date: 25th May 2020 UDIN: 20011178AAAABV9886

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' of the Independent Auditors' Report to the members of the Company on theStandalone Ind AS Financial Statements for the year ended on 31st March2020).Report on the Internal Financial Controls Over Financial Reporting under Clause (i)of Subsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of LAKSHMIMACHINE WORKS LIMITED ("the Company") as of 31st March 2020 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the  internal financial controlsover financial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.

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 financial statements for external purposes in accordance with generallyaccepted accounting Principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with 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 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 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
Place: Coimbatore Membership No. 011178
Date: 25th May 2020 UDIN: 20011178AAAABV9886

Annexure "C" to the Independent Auditor's Report

(Referred to in paragraph under ‘Report on Other Legal and RegulatoryRequirements' of the Independent Auditors' Report to the members of the Company on theStandalone Ind AS Financial Statements for the year ended on 31st March 2020).

According to the information and explanations sought by us and given by the Company andthe books and records examined by us during the course of our Audit and to the best of ourKnowledge and belief we report the following:

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

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

(b) The fixed assets of the Company have been physically verified in a phasedperiodical manner by the management which in our opinion is reasonable having regard tothe size of the Company and the nature of its assets. No material discrepancies werenoticed on such verification.

(c) The title deeds of all the immovable properties of the Company shown under theFixed Assets as at the balance sheet date are held in the name of the Company.

ii. The physical verification of inventory has been conducted by the management atreasonable intervals. The Company has maintained proper record of inventory and nomaterial 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 to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013 during the financial year.

iv. 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.

v. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at 31st March 2020 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 cost records under section148(1) of the Act. We have broadly reviewed the accounts and records of the Company inthis connection and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not however carried out a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

vii. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialstatutory dues in arrears as at 31st March 2020 for a period of more than sixmonths from the date they became payable.

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

Name of the Statute Nature of the dues Amount (R in Lakhs) Amount paid/ adjusted (R in Lakhs) Forum where dispute is pending (Rs in Lakhs)
Central Excise Act1944 Excise Duty Service Tax and Customs Duty 2311.10 124.64 Appellate authorities Up to

Commissioner's Level -

Rs. 114.76
CESTAT - Rs 2196.34
Income Tax Act 1961 Income tax and Interest 207.70 207.70 CIT(A) - Rs. 133.01
ITAT - Rs. 74.69

viii. The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.

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

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.

xi. In our opinion the Company has paid/provided managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.

xiv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

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

For S. Krishnamoorthy & Co.
Chartered Accountants
Firm Registration No. 001496S
K Raghu
Partner
Place: Coimbatore Membership No. 011178
Date: 25th May 2020 UDIN: 20011178AAAABV9886

   

.