You are here » Home » Companies » Company Overview » Lakshmi Mills Company Ltd

Lakshmi Mills Company Ltd.

BSE: 502958 Sector: Industrials
NSE: LAKSHMIMIL ISIN Code: INE938C01019
BSE 00:00 | 27 Jan 1790.05 -34.90
(-1.91%)
OPEN

1832.00

HIGH

1835.00

LOW

1790.05

NSE 05:30 | 01 Jan Lakshmi Mills Company Ltd
OPEN 1832.00
PREVIOUS CLOSE 1824.95
VOLUME 54
52-Week high 2025.00
52-Week low 1100.00
P/E
Mkt Cap.(Rs cr) 125
Buy Price 1790.00
Buy Qty 10.00
Sell Price 1830.00
Sell Qty 2.00
OPEN 1832.00
CLOSE 1824.95
VOLUME 54
52-Week high 2025.00
52-Week low 1100.00
P/E
Mkt Cap.(Rs cr) 125
Buy Price 1790.00
Buy Qty 10.00
Sell Price 1830.00
Sell Qty 2.00

Lakshmi Mills Company Ltd. (LAKSHMIMIL) - Auditors Report

Company auditors report

To the Members of The Lakshmi Mills Company Limited

Report on the audit of standalone Financial Statements

Opinion

We have audited the standalone financial statements of The Lakshmi Mills CompanyLimited ("the Company") which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Cash Flow Statement and for the year then ended and notes tothe financial statementsincluding a summary of the significant accounting policies andother explanatory information. (hereinafter referred to standalone financial statements).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ["the Act"] in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed underSection 133 of the Companies Act 2013 read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 the Loss and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

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 of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report. We have fulfilled theresponsibilities described in the Auditor's responsibilities for the audit of theStandalone Ind AS financial statements section of our report including in relation tothese matters.

S. No. Key Audit Matter Auditor's Response
1 Evaluation of uncertain tax positions Principal Audit Procedures
The Company has uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes (Refer note 30) We obtained details of completed tax assessments and demands received upto the end of the financial year and till the date of finalisation of our report from management. We analysed the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. We considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions to evaluate whether any change was required to management's position on these uncertainties
2 Recoverability of Income tax assets and Receivables from Government authorities As at March 31 2020 non-current assets in respect of Income tax assets to the extent of ' 60.96 lakhs and Receivable from government authorities to the extent of ' 80.21 lakhs are outstanding. Principal Audit Procedures

We analysed and reviewed the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution. The income tax assets represents tax deducted at sources; the amounts receivable from government authorities represent input tax credits eligible for set off and as such we considered and concluded that these recoverables are sustainable upon final resolution.

We have determined that there are no other key audit matters to communicate in ourreport.

Information Other than the standalone Financial Statements and Auditor's Report Thereon

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 CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalonefinancial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalonefinancial statements or our knowledgeobtained during the course of our audit or otherwise appears to 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 standaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(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 (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (INDAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. The Board of Directors are also responsible for overseeing thecompany's financial reporting process. Auditors' Responsibility

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. 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 financial statements.

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the standalone financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements 1. As required by the Companies(Auditor's Report) Order 2016 ("the Order") issued by the Central Government interms of Section 143 (11) of the Act we give in Annexure "A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c) The balance sheet the statement of profit and loss (including other comprehensiveincome) statement of changes in equity and the cash flow statement dealt with by thisreport are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e) On the basis of the written representations received from the directors of theCompany as on March 31 2020 taken on record by the board of directors none of thedirectors are disqualified as on March 31 2020 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure "B" and

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

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Companies Act 2013.

h) With respect to the other matters to be included in the auditors' report inaccordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 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 financial statements - Refer Note No.30 to the standalonefinancial statements.

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

iii There was no requirement during the year to transfer amounts to the InvestorEducation and Protection Fund by the Company.

For M S Jagannathan and Visvanathan
Chartered Accountants
Firm Registration No 001209 S
M V Jeganathan
Coimbatore Membership No. 214178
24th June 2020 UDIN: 20214178AAAABS2647

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the members of The Lakshmi Mills Company Limited ofeven date)

1 A The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

B The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the period andno material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.

C According to the information and explanations given to us and the records examined byus and based on the evidences received from Banks Immovable properties whose title deedshave been pledged as security for Term Loans and cash credit facilities availed from Banksare held in the name of the Company. In respect of freehold properties these have beenconfirmed by the management.

2 A As explained to us inventories have been physically verified by the management atregular intervals during the year.

B In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.

C In our opinion and according to the information and explanations given to us thecompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification as compared to the book records.

3 During the year the company has not granted any loan secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Companies Act 2013 and hence Clause (b) and (c) is not applicable.

4 During the year Company has not made any loans or investments or given anyguarantees and hence disclosure under this clause related to compliance with theprovisions of Section 185 and 186 of the Act does not arise.

5 The company has not accepted any deposits from the public and as such clause 3(v) ofthe Order is not applicable.

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

7 A According to the information and explanations given to us the company is regularin depositing undisputed statutory dues including Provident Fund Employees' Stateinsurance Income tax Service Tax value added tax and any other statutory dues with theappropriate authorities during the year. According to the information and explanationsgiven to us no undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at 31st March 2020 for a period of more than six months from the date theybecame payable.

B According to the information and explanations given to us the details of disputedstatutory dues that have not been deposited on account of dispute is as under:

(Rs.in Lakhs)

Nature of Statute Nature of Dues Amount Rs. lakhs Amount

paid/

adjusted

Period to which the amount relates Forum where dispute is pending
Central Excise / Service Tax Rebate claim 48.63 April 2015 to March 2017 Commissioner of GST and Central Excise (Appeals)
Income tax Income tax 28.57 4.30 A Y 2014-15 CIT(Appeals)

8 In our opinion and according to the information and explanation given to us thecompany has not defaulted in repayment of dues to any of the banks.

9 The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) during the year. The Company had utilised the termloans for the purpose for which it was raised.

10 To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the company was noticed or reported during theyear that causes the financial statements to be materially misstated.

11 According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

12 In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly clause 3(xii) of the Order is not applicable.

13 According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14 According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15 According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

16 The Company is not required to be registered under section 45-1A of the Reserve Bankof India Act 1934.

For M S Jagannathan and Visvanathan
Chartered Accountants
Firm Registration No 001209 S
M V Jeganathan
Coimbatore Membership No. 214178
24th June 2020

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of The Lakshmi Mills Company Limited ofeven date)

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

We have audited the internal financial controls over financial reporting of The LakshmiMills Company Limited ("the Company") as of March 31 2020 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business 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 Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial 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 in 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 Company's internal financial control systemover financial reporting.

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 financialstatements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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 of 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 and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2020 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.

For M S Jagannathan and Visvanathan
Chartered Accountants
Firm Registration No 001209 S
M V Jeganathan
Coimbatore Membership No. 214178
24th June 2020

.