The Members of Lawreshwar Polymers Limited
Report on the Audit of Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of Lawreshwar PolymersLimited ("the Company") which comprise the Balance Sheet as at March 31 2019and the Statement of Profit and Loss (including Other Comprehensive Income) Statement ofChange in Equity and Statement of Cash Flow for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policies andother explanatory information (hereinafter referred to as "Standalone FinancialStatements").
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 a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 March 2019 and profit (including othercomprehensive 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 Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Emphasis of Matter
We draw attention to Note No. 5 regarding accounting of Insurance claim w.r.t. fire atKaladera Plant. The same has been accounted for on the basis of Surveyor's Report/Management best judgement estimates.
Our opinion is not modified with respect to above matter.
Key Audit Matters
Key audit matters ('KAM') are those matters that in our professional judgment were ofmost significance in our audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.
|The Key Audit Matter ||How was the matter addressed in our audit |
|Revenue Recognition:- || |
|Revenue is one of the key profit derivers and is therefore susceptible to misstatement. Cut-off is the key assertion in so far as revenue recognition is concerned since an inappropriate cut-off can result in material misstatement of result for the year. ||Our audit procedure with regard to revenue recognition include testing controls automated and manual around dispatches/ deliveries inventory reconciliations and circularization of receivable balances substantive testing for cut-offs and analytical review procedure. |
|Discounts and Incentives:- || |
|Discounts and incentives to dealers / customers are administered through various schemes including incentives. These are material items of business cost. The calculation of the amount of expense to be recognized is both voluminous complex and involves significant judgement. ||Our audit procedures included assessment of the design and implementation of controls in addition to testing the effectiveness of key controls in respect of recognition of the expenses for such discounts and incentives. We have considered each significant type of discount recognized and assessed the appropriateness of the judgement applied while recognizing the expenses including the methodology and inputs used in calculating the amount and in some cases re-performed the calculation. Our audit procedures also included verification of appropriate authorization analytical review and actual charge for the year and review of historical trends in respect of these expenses. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompanys annual report but does not include the standalone financial statements andour auditors' report thereon. These reports are expected to be made available to us afterthe date of this audit report.
Our opinion on the standalone financial 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 standalone financial statements or our knowledge.
Management's Responsibility for the standalone Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Standalone Financial Statements that give a true and fair view of thefinancial position state of affairs profit / loss (including other comprehensiveincome) changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Audit of Standalone Financial Statements
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 skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the operating effectiveness 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 managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors1 report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 auditors' 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.
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
Report on Other Legal & Regulatory Requirement
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 ofthe Act we give in the Annexure a statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.
(A) 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 purpose 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 Statement of Cash Flow dealt with by thisReport 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 Companies (IndianAccounting Standards) Rules 2015 as amended.
e. On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure II".
(B) 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 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 as at 31 March 2019 onits financial position in its standalone financial statements - Refer Note 33 to thestandalone financial statements.
ii. The Company did not have any long term contract including derivatives contracts forwhich there were any material foreseeable losses; and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
(C) With respect to the matter to be included in the Auditors' Report under section197(16):
For Ravi Sharma & Company Chartered Accountants FRN:015143C
(CA Paras Bhatia)
Partner M.No. 418196 Date: 27th May 2019 Place: Jaipur
Annexure I to the Independent Auditors Report
With reference to the Annexure I referred to in the Independent Auditors' Report to themembers of the Company on the Standalone Financial Statements for the year ended 31 March2019 we report the following:
(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management during the year andthere is a regular program of verification which in our opinion is reasonable havingregard to the size of the company and the nature of its assets No material discrepancieswere noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
(ii) (a) The inventory has been physically verified during the year by the management.In our opinion the frequency of verification is reasonable.
(b) The discrepancies noticed on physical verification of inventory as compared to bookrecords were not material and have been properly dealt with in the books of accounts.
(c) In our opinion and according to the information and explanation given to us and onthe basis of our examination of the records of inventory the company is maintainingproper records of inventory. The discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been properly dealt within the books of accounts.
(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms or other parties covered in theregister maintained under section 189 of the Companies Act 2013 ('the Act).Accordingly the provisions of clause 3(iii)(a) (b) & (c) of the order are notapplicable to the company.
(iv) In our opinion and according to the information and explanations given to usthe company has complied with the provisions of section 185 and 186 of the Companies Act2013 In respect of loans investments guarantees and securities given.
(v) The Company has not accepted any deposits from the Public within the meaning of thedirectives issued by the Reserve Bank of India Provisions of Section 73 to 76 of the Actany other relevant provisions of the Act and the relevant rules framed thereunder.
(vi) According to the information &. explanation given to us the CentralGovernment has not prescribed the maintenance of cost records under Section 148(1) of theCompanies Act 2013 in respect of manufacture of its products by the company.
(vii) In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund EmployeesState Insurance Income-tax Goods and Services tax duty of Customs Cess and othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities except for a few delays.
According to the information and explanations given to us no undisputed amount payablein respect of the aforesaid due were outstanding as at March 31 2019 for a period of morethan six months from the date of becoming payable.
(b) According to the information and explanation given to us there are no pendingdues of Provident fund Employees' State Insurance Income-tax Goods and Services taxduty of Customs Cess and other material statutory dues which are not deposited on accountof dispute.
(viii) According to information and explanation given to us by the management ason balance sheet date the company is not in default w.r.t. repayment of loans andborrowings to a financial institutions banks or government further the company has notissued any debentures.
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management during the year under review the company did not raised moneys byway of initial public offer or further public offer including debt instruments. To thebest of our knowledge and belief and according to the Information and Explanation given tous term loans availed by the company were prima facie applied by the company during theyear for the purpose for which the loan were Obtained.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.
(xi) In our opinion and according to the information and explanations given to us andbased on examination of the records of the Company the Company has paid / providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
(xii) According to information and explanations given to us in our opinion theCompany is not a Nidhi Company as prescribed in Section 406 of the Act. Therefore theprovisions of clause 4 (xii) of the Order are not applicable to the Company.
(xiii) According to information and explanations given to us and based on examinationof the records of the company all transactions with the related parties are in compliancewith section 177 and 188 of the Act and the details of such transactions have beendisclosed in the Financial Statements as required by the applicable accounting standards.
(xiv) According to information and explanations given to us and based on examination ofthe records of the company the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
(xv) According to information and explanations given to us and based on examination ofthe records of the company the company has not entered into any non-cash transactionswith directors or persons connected with him. Accordingly the provisions of clause 3 (xv)of the Order are not applicable to the Company and hence not commented upon.
(xvi) According to information and explanations given to us the company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934 andaccordingly the provisions of clause 3 (xvi) of the Order are not applicable to theCompany and hence not commented upon
For Ravi Sharma & Company Chartered Accountants FRN:015143C
(CA Paras Bhatia)
Partner M.No. 418196 Date: 27th May 2019 Place: Jaipur
Annexure II to the Independent Auditors' Report
(Referred to in paragraph l(A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
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 with reference to Standalone FinancialStatements of Lawreshwar Polymers Limited (hereinafter referred to as "theCompany") as of March 31 2019 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that. ManagementsResponsibility for Internal Financial Controls
The Board of Directors of the company are responsible for establishing and maintaininginternal financial controls based on the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the respectivecompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofinternal financial controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 auditors 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 Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls with reference to Financial Statements
A companys 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 withgenerally 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 detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to FinancialStatements
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.
In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Ravi Sharma & Company Chartered Accountants FRN:015143C
(CA Paras Bhatia)
Partner M.No.: 418196 Date: 27th May 2019 Place: Jaipur