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Loyal Textile Mills Ltd.

BSE: 514036 Sector: Industrials
NSE: LOYALTEX ISIN Code: INE970D01010
BSE 00:00 | 11 Aug 980.65 -18.35
(-1.84%)
OPEN

999.00

HIGH

1019.00

LOW

968.55

NSE 00:00 | 11 Aug 984.30 -49.70
(-4.81%)
OPEN

1034.00

HIGH

1095.00

LOW

960.00

OPEN 999.00
PREVIOUS CLOSE 999.00
VOLUME 808
52-Week high 1780.00
52-Week low 630.00
P/E 4.83
Mkt Cap.(Rs cr) 473
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 999.00
CLOSE 999.00
VOLUME 808
52-Week high 1780.00
52-Week low 630.00
P/E 4.83
Mkt Cap.(Rs cr) 473
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Loyal Textile Mills Ltd. (LOYALTEX) - Auditors Report

Company auditors report

To the Members of Loyal Textile Mills Limited Kovilpatti.

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the Standalone Ind AS Financial Statements of M/s.LOYAL TEXTILE MILLS LIMITED (‘the Company') which comprise the BalanceSheet as at 31 March 2021 the statement of Profit and Loss (statement of changes inequity) the statement of cash flows and the statement of changes in equity for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2021 and its profit/loss includingother comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance 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 provision of the Companies Act 2013 and the Rules thereunderand have fulfi lled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most signifi cance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

We have no material matters or issues to be reported upon.

Management's Responsibility for the Standalone FinancialStatements

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 and presentation of these Standalone Ind AS Financial Statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with relevant Rules issuedthereunder.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements management isresponsible 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.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting (We draw attention to note no.32(ii)(a) in the financialstatements along with the matters set forth to state that there is no material uncertaintythat exists which may cast significant doubt on the company's ability to continue asa going concern. Our opinion is not modified in respect of this matter) and based on theaudit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as agoing concern. If we conclude that a material uncertainty exists we are required to drawAppendices 87 attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with Governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged With Governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with Governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. 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 purposes of ouraudit.

(b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet the Statement of Profit and Loss the Statementof Cash flows and the Statement of Changes in Equity dealt with by this Report are inagreement with the books of account;

(d) in our opinion the aforesaid Standalone Ind AS FinancialStatements comply with the Accounting Standards specified under Section 133 of the Actread with relevant rule issued thereunder;

(e) on the basis of the written representations received from theDirectors as on 31st March 2021 and taken on record by the Board of Directorsnone of the Directors is disqualified as on 31st March 2021 from beingappointed as a Director in terms of Section 164(2) of the Act; and

(f) with respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".

(g) with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

(i) the Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note No. 32 to the financialstatements;

(ii) the Company did not have any long-term contracts includingderivative contracts; and

(iii) there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of section143(11) of the Act we give in the Annexure B a statement on the matters specified in theparagraph 3 and 4 of the order to the extent applicable.

For Ganesh Prasad
Chartered Accountants
Firm Registration No.000872S
S. Natanagopal
Partner
Membership No.022841
UDIN: 21022841AAAAAZ1041
Place : Madurai
Date : 24th May 2021

ANNEXURE "A" to the Independent Auditor's Report of evendate on the Standalone Ind AS

Financial Statements of Loyal Textile Mills Limited

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 Loyal Textile Mills Limited ("the Company") as of March 31 2021 inconjunction with our audit of the Standalone Ind AS 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 maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 judgement including the assessment ofthe risks of material misstatement of the standalone Ind AS financial statements whetherdue 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 internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(ii) 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

(iii) Provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the standalone Ind AS 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 financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies 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 March 31 2021 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 Institute ofChartered Accountants of India.

For Ganesh Prasad
Chartered Accountants
Firm Registration No.000872S
S. Natanagopal
Partner
Membership No.022841
UDIN: 21022841AAAAAZ1041
Place : Madurai
Date : 24th May 2021

Annexure "B" to the Independent Auditor's Report of evendate on the Standalone Ind AS

Financial Statements of Loyal Textile Mills Limited

The Annexure referred to in Paragraph 2 under the heading "Reporton Other Legal and Regulatory Requirements" of our Report on the Standalone Ind ASfinancial statements of even date we report that:

(i) a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets;

b) The Company has a programme of periodic physical verifi cation offixed assets at all locations by which during the year the Company has verifi ed fixedassets at selected locations in a phased manner and we were informed that no materialdiscrepancies were noticed on such verification.

c) According to the information and explanations given to us and basedon the the title deeds of immovable properties as disclosed in Note No. 9 to theStandalone Ind AS Financial Statements are held in the name of the Company except forthe following:

Particulars Free hold (Rs. in Lakhs) Lease hold (Rs. in Lakhs) Remarks
Gross Block as at 31st March 2021 Nil 161.90 SIPCOT Lease hold Land

(ii) As explained to us the inventories at all locations have beenphysically verifi ed by the Management at regular intervals during the year. We areinformed that the discrepancies noted on such verifi cation of stocks as compared to bookrecords were not material and the same have been properly dealt with in the books ofaccounts. However no detailed examination has been carried out by us.

(iii) In our opinion and according to the information and explanationsgiven to us the Company has not granted any loan secured or unsecured to the companiesfi rms limited liability partnership or other parties listed in the register maintainedunder section 189 of the Companies Act 2013.

(iv) The Company has not granted any loan or provided any guarantee orsecurity to the parties covered under Sections 185 and 186 of the Act. In respect ofinvestment in securities the company has complied with the provisions of section 186 ofthe Act.

(v) The Company has not accepted any deposits from the public duringthe year as per the provisions of section 73 and 76 of the Companies Act 2013. The companyhas accepted/taken interest free inter corporate deposit from a company.

(vi) We have broadly reviewed the cost records maintained by thecompany as prescribed by the Central Government under Sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. We have however not made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to usthe Company has been regular in depositing undisputed statutory dues including ProvidentFund Employees' State Insurance Income Tax Sales Tax Service Tax Duty ofCustoms Duty of Excise Value Added Tax Cess and any other Statutory Dues to theappropriate authorities. In respect of undisputed Statutory dues payable in respect ofabove which are outstanding as at 31st March 2021 for a period of more than six monthsfrom the date they became payable is given below:

Nature of dues Amount (Rs. in Lakhs)
Advance Licensing Nil

(b) According to the information and explanations given to us thereare no dues of income tax service tax duty of customs duty of excise value added taxwhich have not been deposited on account of any dispute. In respect of sales tax which arepending payment on account of dispute the information of which is given below:

Name of the Statute Demand Paid/ adjusted against refunds Period to which the dues belong Forum where the dispute is pending
Sales Tax 205.70 84.90 2005-06 2007-08 2008-09 2009-10 2013-14 ADC – TNVLY Dy Commr. (Appeal)
CST (SVTM) 795.54 - 2018 Commercial Tax Offi cer
VAT 984.48 373.86 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Addl. Commissioner
TNGST 41.78 28.31 2018 Appellate Commissioner
Labour cases Pending 3.14 - Different dates Cases pertain to accident compensation/ Bonus/ ESI Benefi t/ Disciplinary cases

(viii) According to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions or banks orGovernment. The company has not issued any debenture.

(ix) The Company did not raise any moneys by way of initial publicoffer or further public offer (including debt instruments) during the year. The term loanstaken during the year are applied for the purposes for which the term loans were obtained.

(x) According to the information and explanations given to us nomaterial fraud by the Company or on the Company by its Officers or employees or reportedduring the year. (xi) According to the information and explanations given to us and basedon our examination of the records of the company the company has paid or provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act.

(xii) The Company not being a Nidhi Company the requirements ofparagraph 3(xii) of the order is not applicable.

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company the transactions with the relatedparties are in compliance with Sections 177 and 188 of Companies Act 2013 whereapplicable and the details of such transactions have been disclosed in the FinancialStatements as required by the applicable Accounting Standards.

(xiv) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the company has not entered intoany non-cash transactions with Directors or persons connected with him.

(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.

For Ganesh Prasad
Chartered Accountants
Firm Registration No.000872S
S. Natanagopal
Partner
Membership No.022841
UDIN: 21022841AAAAAZ1041
Place : Madurai
Date : 24th May 2021

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