You are here » Home » Companies » Company Overview » Lotus Chocolate Company Ltd

Lotus Chocolate Company Ltd.

BSE: 523475 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE026D01011
BSE 00:00 | 07 Aug 14.98 0.90
(6.39%)
OPEN

14.49

HIGH

15.30

LOW

13.95

NSE 05:30 | 01 Jan Lotus Chocolate Company Ltd
OPEN 14.49
PREVIOUS CLOSE 14.08
VOLUME 6061
52-Week high 20.40
52-Week low 9.35
P/E 21.71
Mkt Cap.(Rs cr) 19
Buy Price 14.90
Buy Qty 668.00
Sell Price 15.30
Sell Qty 32.00
OPEN 14.49
CLOSE 14.08
VOLUME 6061
52-Week high 20.40
52-Week low 9.35
P/E 21.71
Mkt Cap.(Rs cr) 19
Buy Price 14.90
Buy Qty 668.00
Sell Price 15.30
Sell Qty 32.00

Lotus Chocolate Company Ltd. (LOTUSCHOCOLATE) - Auditors Report

Company auditors report

To The Members of Lotus Chocolate Company Limited Report on the Standalone FinancialStatements Opinion

We have audited the accompanying standalone financial statements of Lotus ChocolateCompany Limited ("the Company") which comprise the standalone Balance Sheet asat March 312019 and the standalone Statement of Profit and Loss (including OtherComprehensive Income) standalone Statement of Changes in Equity and standalone Statementof Cash Flows for the year then ended and a summary of the significant accounting policiesand other 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 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 312019 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SA's) specifiedunder section 143(10) of the Act. Our responsibilities under those SA's 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.

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.

The Key Audit matter How the matter was addressed in our Audit
The Company has a receivable of INR 640.63 lakhs as at 31st March 2019. Our audit procedures in this area included the following:
The Company's operations comprise wide ranging characteristics of individual customers across locations some customers having a higher days sales outstanding than the average days sales outstanding. Consequently there is an inherent exposure to credit risk for these customers. - Obtaining an understanding of and testing key controls over receivables collection process and credit control process over aged receivables and customer credit approvals.
- Assessing the classification of the balances in the receivables ageing by performing an independent re-computation of the aged receivables.
- For a sample of customer balances verified the subsequent receipts against the outstanding year end balances.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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 knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact.

We have nothing to report in this regard.

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 Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit / loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India.

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 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 the 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 SA's we exercise professional judgment andmaintain professional scepticism 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 financial statements in place andthe 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 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue 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.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. (A) 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 it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of Profit and Loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of theCompany as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(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 on its financialposition in its standalone financial statements vide Note No.33 of the notes to thefinancial statements.

ii. The Company did not have any long term contracts including derivate contracts forwhich there were any material foreseeable losses.

iii. The Company has no amount required to be transferred to the Investor Education andProtection Fund during the year.

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31st March 2019.

(C) With respect to the matter to be included in the Auditor's Report U/s 197(16):

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.

For VDNR & Associates
Chartered Accountants
Firm Registration No. 011251S
Venkateswara Reddy D
Place: Hyderabad Partner
Date: 29.05.2019 Membership No. 028488

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT - 31st MARCH 2019

(Referred to in our report of even date)

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

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

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner. In our opinion the manner and periodicity is reasonable having regard tothe size of the Company and the nature of its assets. Pursuant to the program certainfixed assets were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the title deeds provided to us we report that thetitle deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.

ii. The Inventory of Finished goods raw materials stores spare parts except thosein transit and with third parties have been physically verified by management at the yearend. We consider that the frequency of the verification is reasonable having regard tothe nature of business and size of the company. No material discrepancies were noticed onphysical verification.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Therefore the provisions of Clause 3 (iii)(a) (b) and (c) of the said Order are notapplicable to the Company.

iv. In our opinion and according to the information and explanations given to us thecompany has not granted any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act during the year. The Company has complied with theprovisions of Section 186 of the Act in respect of loans making investments and providingguarantees and securities as applicable.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public in accordance with the provisions ofsection 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly paragraph 3(v) of the Order is not applicable to the Company.

vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the activities/products manufacturedby the Company. Accordingly paragraph 3(vi) of the order is not applicable to theCompany.

vii. (a) According to the information and explanations given to us and on the basis ofour examination

of the records of the Company amounts deducted / accrued in the books of account inrespect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Goods and Service Tax Duty of Customs Cess and other materialstatutory dues have been generally and regularly deposited during the year by the companywith the appropriate authorities. According to the information and explanations given tous no undisputed amounts payable in respect of Provident Fund Employees' StateInsurance Income Tax Goods and Service Tax Duty of Customs Cess and other materialstatutory dues were in arrears as at 31st March 2019 for a period of more thansix months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Service Tax Value Added Tax Goods and Service Tax Customs DutyExcise Duty Cess and other material statutory dues in arrears as at 31stMarch 2019 which have not been deposited with the appropriate authorities on account ofany dispute.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of its dues to the banker. The Company during theyear has not availed any loans or borrowings from financial institutions banks andgovernment nor has not issued any debentures.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

x. According to the information and explanations given to us no material fraud by theCompany or no material fraud on the Company by its officers or employees has been noticedor reported during the year.

xi. According to the information and explanations given to us the Company haspaid/provided managerial remuneration in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company as prescribed under section 406 of the Act. Accordinglyparagraph 3 (xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and on the basis ofour examination of the records of the Company transactions with the related parties arein compliance with Section 177 and 188 of the Companies Act 2013 where applicable. Thedetails of such related party transactions have been disclosed in the standalone Ind ASfinancial statements as required by the applicable Accounting Standards.

xiv. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly paid convertible debenturesduring the year. Accordingly paragraph 3 (xiv) of the Order is not applicable to theCompany.

xv. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with its Directors or persons connected to its directors. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company.

xvi. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company

For VDNR & Associates
Chartered Accountants
Firm Registration No. 011251S
Venkateswara Reddy D
Place: Hyderabad Partner
Date: 29.05.2019 Membership No. 028488

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

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")

(Referred to in paragraph 2(A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof LOTUS CHOCOLATE COMPANY LIMITED ("the Company") as of 31st March2019 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31st March 2019 based on the internal financialcontrols with reference to financial statements 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 Institute ofChartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors of the Company is responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to the financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditor's 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 and the Standards on Auditing prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to the financial statements. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withrespect to the financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial controls with reference to financial statements 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 controlswith reference to financial statements 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.

For VDNR & Associates
Chartered Accountants
Firm Registration No. 011251S
Venkateswara Reddy D
Place: Hyderabad Partner
Date: 29.05.2019 Membership No. 028488