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Lakhotia Polyesters (India) Ltd.

BSE: 535387 Sector: Industrials
NSE: N.A. ISIN Code: INE191O01010
BSE 00:00 | 01 Aug Lakhotia Polyesters (India) Ltd
NSE 05:30 | 01 Jan Lakhotia Polyesters (India) Ltd
OPEN 8.84
PREVIOUS CLOSE 8.84
VOLUME 10
52-Week high 9.20
52-Week low 8.84
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.84
Sell Qty 52.00
OPEN 8.84
CLOSE 8.84
VOLUME 10
52-Week high 9.20
52-Week low 8.84
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.84
Sell Qty 52.00

Lakhotia Polyesters (India) Ltd. (LAKHOTIAPOLY) - Auditors Report

Company auditors report

Independent Auditor’s Report

To the Members of M/s. Lakhotia Polyester (India) Limited Report on the StandaloneFinancial Statements

Opinion

We have audited the standalone financial statements of M/s. Lakhotia Polyester (India)Limited ("the Company") which comprise the balance sheet as at 31st March 2018and the statement of Profit and Loss statement of changes in equityand statement of cashflows for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information.

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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and profit changes in equity and its cash flows for the year endedon that 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.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these mattersexcept –

A] The company has not prepared Consolidated Financial Statements to include financialof its associate to comply with the provisions of section 129(3) of the Companies Act2013; and

B] The company has not made provision for gratuity payable; and

C] The company has not provided the copies of the agreement for the premises taken onrent and therefore liability on account of operating leases could not be worked out.

Management’s Responsibility for the Standalone Financial 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equityand cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue 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. Those Board of Directors are also responsible for overseeing theCompany’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

Report on Other Legal and Regulatory Requirements

As required by theCompanies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act 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 it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified 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 as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (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 A".

g) 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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements –

The company promoters directors and certain group promoted entities are a party tolitigation with the customs departments for import of certain materials based

upon alleged "misleading information". The matter is pending in Appeal beforethe Central Excise and Customs Appellate Tribunal Mumbai and before the High CourtMumbai. The total demand in the matter raised by the adjudicating authorities is to thetune of Rs. 220.91 Lakhs against company and Rs. 42.00 Lakhs against Shri M.S. Lakhotiathe Managing Director of the company. The amounts as stated are ex interest thereon.ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There has been no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

For R R GUJRATHI & Co.
Chartered Accountants
FRN - 103382W
Nashik Rohit Rajmal Bafna FCA
05.06.2018 Membership No. 113955

ANNEXURE TO AUDITOR’S REPORT

Annexure referred to in paragraph 7 Our Report of even date to the members of LakhotiaPolyesters (India) Limited on the accounts of the company for the year ended 31st March2018.

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that-

(i) (a) The Company is maintaining 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; as informed to us no material discrepancies were noticed on suchverification;

(c) The title deeds of the immovable properties are held in the name of the company.

(ii) The inventories at all business places have been physically verified by themanagement from time to time. In our opinion the frequency of verification is reasonable.As explained to us there were no material discrepancies noticed on physical verificationof inventories as compared to the books of accounts. But the record relating to physicalverification of inventories has not been maintained.

(iii) (a) The company has granted loans to the other parties covered in the registermaintained under section 189 of the Companies Act 2013. Based upon the managementrepresentations as made to us we report that these advances are towards businesstransactions and in the normal course of business activity of the company.

(b) These loans are repayable on demand and hence no schedule of repayment isprepared. Interest has not been charged on these loans / advances.

(c) The loan amounts are not overdue.

(iv) The company has complied with the provisions of section 186 of the Act. But hasnot complied with the provisions of section 185 by advancing a sum to 2 parties havingsubstantial interest of the Managing Director of the company. Maximum outstanding amounton these ledgers is Rs. 499000/ -

(v) The Company has accepted deposits from its directors and relatives and has compliedwith the provisions of the Companies Act 2013.

(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act.

(vii) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is not regular in depositing theundisputed statutory dues including Provident Fund Employees’ State InsuranceIncome-tax (TDS) Profession Tax as applicable with the appropriate authorities inIndia. Following are the amounts due for more than six months but not paid –

Particulars Amount Rs.
Profession Tax 59625/-
Service Tax 5038/-
Income Tax - TDS 342330/-
GST - Reverse Charge 34558/-
TDS - Late Fees & Interest 345580/-

(b) According to the information and explanations given to us and based on the recordsof the company examined by us there are following disputed unpaid amounts –

Particulars Amount Rs. in Lakhs Forum where dispute is pending
Customs Duty 220.91 CESTAT Mumbai

(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not defaulted in repayment ofdues to the banks. No debentures have been issued by the company and hence compliancewith the said clause is not applicable.

(ix) In our opinion and according to the information and explanations given to us thecompany has neither raised any term loan nor collected money by way of initial or furtherpublic offer during the financial year.

(x) During the course of our examination of the books and records of the companycarried in accordance with the auditing standards generally accepted in India we haveneither come across any instance of fraud on or by the Company noticed or reported duringthe course of our audit nor have we been informed of any such instance by the Management.

(xi) The company has paid managerial remuneration in accordance with the provisions ofsection 197 of the Act.

(xii) The company is not a nidhi company.

(xiii) All transactions with the related parties are in compliance with sections 177and 178 of the Act and the details have been disclosed in the Financial Statements asrequired by the applicable Accounting Standards.

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.

(xv) The company has not entered into non - cash transactions with directors or personsrelated to them in the nature prescribed under section 192 of the Act.

(xvi) The company is not required to be registered under section 45 – IA of theReserve Bank of India Act 1934.

For R R GUJRATHI & Co.
Chartered Accountants
FRN - 103382W
Nashik Rohit Rajmal Bafna FCA
05.06.2018 Membership No. 113955

Annexure B to the Independents Auditor’s Report of even date on the standalonefinancial statements of M/s. Lakhotia Polyester (India) Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GrainotchIndustries Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the standalone financial statements of the company for the year ended on thatdate.

Managements Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India(‘ICAI’). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the business including adherence to theCompany’s policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the company’s internal financialcontrols over financial reporting based upon our audit. We have conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by the ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of Internal Financial Controls both Applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls systems 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 financial statement whether due to fraud or error.

Webelieve that the audit evidence wehave obtained is sufficient and appropriate toprovide a basis for our audit opinion on the company’s internal financial controlssystem 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 financial statements for external purposes in accordance with thegenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that - (i) Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company. (ii) Provide reasonableassurance that the transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of the management and directors of the company; and (iii) Providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company’s assets that could have a material effect on thefinancial 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 the Company has in all material respect an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by ICAI.

For R R GUJRATHI & Co.
Chartered Accountants
FRN - 103382W
Nashik Rohit Rajmal Bafna FCA
05.06.2018 Membership No. 113955