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Lakshmi Energy & Foods Ltd.

BSE: 519570 Sector: Agri and agri inputs
NSE: LAKSHMIEFL ISIN Code: INE992B01026
BSE 00:00 | 03 Jun Lakshmi Energy & Foods Ltd
NSE 05:30 | 01 Jan Lakshmi Energy & Foods Ltd
OPEN 2.50
PREVIOUS CLOSE 2.70
VOLUME 1974
52-Week high 8.55
52-Week low 2.50
P/E
Mkt Cap.(Rs cr) 20
Buy Price 2.50
Buy Qty 24.00
Sell Price 2.70
Sell Qty 295.00
OPEN 2.50
CLOSE 2.70
VOLUME 1974
52-Week high 8.55
52-Week low 2.50
P/E
Mkt Cap.(Rs cr) 20
Buy Price 2.50
Buy Qty 24.00
Sell Price 2.70
Sell Qty 295.00

Lakshmi Energy & Foods Ltd. (LAKSHMIEFL) - Auditors Report

Company auditors report

To the Members of

Lakshmi Energy and Foods Limited.

Report on the Financial Statements as per Ind AS

We have audited the accompanying standalone financial statements ofLakshmi Energy and Foods Limited ("the Company") which comprise the BalanceSheet as at March 312018 and the Statement of Profit and Loss (including othercomprehensive income) Cash Flow Statement and statement of changes in equity for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies act 2013 ("the Act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance including other comprehensive income cashflows and changes in equity of the Company in accordance with the Accounting principlesgenerally accepted in India including the Indian Accounting Standard Ind AS specifiedunder Section 133 of the Act read with the provision of the Companies (Accounts) Rules2014.

This responsibility includes the maintenance of adequate accountingrecords in accordance with the provision of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentations ofthe financial statements that give a true and fair view and free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone IND ASfinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and Rules made there under.

We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the standalone IND AS financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone IND AS financial statements whether due to fraudor error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on the effectiveness of the entity'sinternal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by companiesmanagement as well as evaluating the overall presentation of the financial statements.

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 financialstatement.

Basis of Qualified Opinion

a.) Attention is invited to Note No 10 of the financial statementsTrade receivables amounting to Rs. 3620.75 Million out of which debtors outstandingamounting to Rs 3261.86 Million are outstanding since long from the date they become duefor payment.

"These are long outstanding and we are unable to comment of therecoverability of the same for which no provision has been created for doubtful tradereceivables."

The loss to that extent is under stated and similarly the receivablesthe effect however could not be quantified. Opinion

In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in basisfor Qualified opinion paragraph above the aforesaid standalone financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 312018 and its loss totalcomprehensive income its Cash Flow and changes in equity for the year ended on thatdate.

Emphasis of the Matter.

1. The provision in respect to Gratuity has not been made by theCompany as per Ind. (AS) 19 . The loss/Gain to that extent is under state/overstated theeffect however could not be quantified.

2. The accompanying financial statements has been prepared assuming thecompany will continue as a going concern. As per cash flow attached to the financialstatements the company has suffered negative cash flow from operations conditions thatraise substantial uncertainty about the company ability to continue as a going concern.The financial statements do not include any adjustment that might result from the outcomeof this uncertainty.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirement's

1. 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 Act we give in the Annexure A a statement on the mattersspecified in the paragraph 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act we report that:-

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss Including othercomprehensive income and Cash Flow Statement and the statement of changes in equity dealtwith by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in the basis forQualified opinion paragraph above in our opinion the aforesaid standalone financialstatements comply with the Indian Accounting Standards (Ind As) prescribed under Section133 of the Companies Act 2013 read with Rule 7 of the Companies(Accounts) Rules2014;

e) The matters described in the basis for Qualified Opinionparagraph and emphasis of matter paragraph above in our opinion can adversely affect thefunctioning of the company.

f) On the basis of written representations received from the directorsas on March 312018 and taken on record by the Board of Directors none of the directorsis disqualified as on March 312018 from being appointed as a director in terms ofsection 164(2) of the Companies Act 2013.

g) The qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion paragraphabove.

h) with respect to the adequacy of the internal financial controls overfinancial reporting of the company and the operating effectiveness of such control referto our separate report in Annexure "B. Our report expresses unmodified opinion on theadequacy and operating effectiveness of the company's internal financial controls overfinancial reporting.

i) With respect to the other matters included in the Auditor's Reportin accordance with Rule 11 of Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to explanations given to us:

i. The Company has disclosed the impact of pending litigations in itsfinancial statements with respect to suits on or by the company as referred to in Note32(5) and of the financial statements.

ii. The company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There no amounts which required to be transferred to the InvestorEducation and Protection Fund by the company.

for K Singh & Associates

Chartered Accountants Firm's Registration Number: 012458N

CA. Kultar Singh Partner

Membership Number: 091673

Place of Signature: Khamanon

Date: 31th Oct 2018

Annexure- A to the Independent Auditors' Report

Referred to in paragraph 1 under ‘Report on other Legal andRegulatory Requirements' section of our report of even date. We report that:

1. (a) The company has maintained proper records showing fullparticulars including quantitative details and situation of

Property plant and Equipment;

(b) The Company has a programme of verification of Property plant andequipment to cover all the items in a phased manner over a period of two years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets .Pursuant to the programme property plant and equipment were physically verifiedby the management during the year. According to the information and explanation given tous discrepancies noticed on such verification were not material and have been properlydealt in the books of account.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed andtransfer deed provided to us we report that the title deeds of immovable properties areheld in the name of the company.

2. (a) The management has conducted the physical verification ofinventory at reasonable intervals during the year and no material discrepancies werenoticed on such physical verification.

(b) In our opinion and according to the information and explanationsgiven to us the procedures of physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the company and thenature of its business.

3. The Company has not granted any loans secured and unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Act.

4. In our opinion and according to the information and explanationsgiven to us the company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 in respect of loans investments guarantees and security.

5. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits during the year from the public inaccording with the provisions of Sections 73 to 76 or any other relevant provisions of theAct and rules framed there under. Accordingly paragraph 3(v) of the order is notapplicable to the Company.

6. The maintenance of cost records has been specified by the CentralGovernment under section 148(l) of the Companies Act 2013 in respect of power generationunit of the Company. We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 as amended and prescribedby the Central Government of India under sub section (l) of section 148 of the CompaniesAct and are of the opinion that prima facie the prescribed records have been maintained.We have however not made detailed examination of the cost records so as to determinewhether they are accurate or complete.

7. (a) According to information and explanations given to us and on thebasis of our examination of the books of account

and records the Company has been generally regular in depositingundisputed statutory dues including Employees State Insurance Income-Tax Sales tax GSTService tax Duty of Customs Duty of ExciseValue added Tax Cess and any other statutorydues with the appropriate authorities. According to the information and explanations givento us no undisputed amounts payable in respect of the above were in arrears as at March312018 for a period of more than six months from the date on when they become payable

(b) According to the information and explanation given to us there areno dues of sales tax service tax/GST duty of customs duty of excise value added taxoutstanding on account of any dispute. Income Tax dues outstanding on account of disputesare as follows:-

Name of the Statutes Nature of dues Amount ] (Rs. In Millions) Period to which amount relates Forum where dispute is pending
Income Tax Act 1961 Demand Raised 65.50 AY 2008-09 Punjab & Haryana High Court

8. In our opinion and according to the information and explanationsgiven to us the Company has defaulted in the repayment of fund based and non-fund basedborrowings to the banks as the account has been classified as NPA. Besides thesefacilities there is no default in the repayment of loans/borrowings to the other financialinstitutions Government or debenture holders.

9. Based upon the audit procedures performed and the information andexplanations given by the management the Company has not raised moneys by way of initialpublic offer including debt instruments and term Loans. Accordingly the provisions ofclause 3 (ix) of the order are not applicable to the Company and hence not commented upon.

10. Based upon the audit procedures performed and the information andexplanations given by the management we report that no fraud by the Company or on thecompany by its officers or employees has been noticed or reported during the year.

11. The Company has paid any managerial remuneration during thefinancial year ending 31st March 2018 however the company has sought the necessaryapproval and mandated as per the provisions of section 197 read with schedule V of theCompanies Act 2013.

12. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company therefore the provisions of para 3(xii)of the Order is not applicable to the Company.

13. According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

14. Based upon the audit procedures performed and the information andexplanations given by the management the company has made preferential allotment sharesduring the year by way of conversion of Series 2 convertible warrants (3660000 warrants)into 3660000 Equity shares of Rs. 2/- each during the year under review. Accordinglythe provisions of section 42 of the Companies Act 2013 have been complied with and theamount raised has been used for the purpose for which the funds raised.

15. Based upon the audit procedures performed and the information andexplanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him and hence provisions of Section192 of the Act are not applicable.

16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.

for K Singh & Associates

Chartered Accountants Firm's Registration Number: 0I2458N

CA. Kultar Singh

Partner

Membership Number: 091673

Place of Signature: Khamanon

Date: 31th Oct 2018

Annexure - B to the Auditors' Report

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

We have audited the internal financial controls over financialreporting of Lakshmi Energy and Foods Limited ("the Company") as of 31st March2018 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining 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(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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 internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 judgment 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 Company's internal financialcontrols system over financial reporting.

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 the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould 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 financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2018 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the ICAI.

for K Singh & Associates

Chartered Accountants Firm's Registration Number: 012458N

CA. Kultar Singh

Partner

Membership Number: 091673

Place of Signature: Khamanon

Date: 31th Oct 2018