To the Members of Loyal Textile Mills Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statementsof M/s. LOYAL TEXTILE MILLS LIMITED (the Company') which comprise the Balance Sheetas at
31 March 2018 the statement of Profit and Loss (including othercomprehensive income) the statement of cash flows and the statement of changes in equityfor the year then ended and a summary of Significant Accounting Policies and otherexplanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedinSection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation and presentation of these Standalone Ind AS Financial Statements that give atrue 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 accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand 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.
Our responsibility is to express an opinion on these Standalone Ind ASFinancial Statements based on our audit.
We have taken into account the provisions of the Act the Accountingand Auditing Standards and matters which are required to be included in the audit reportunder the provisions of the Act the order and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the standaloneInd AS financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Standalone IndAS Financial Statements.
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 including Ind AS ofthe state of affairs of the Company as at 31stMarch 2018 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act we report that: (a) wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. (b) in our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books; (c) the Balance Sheet the Statement ofProfit and Loss the Statement of Cash flows and the Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account; (d) in our opinion theaforesaid Standalone Ind AS Financial Statements comply with the Accounting Standardsspecified under Section 133 of the Act read with relevant rule issued thereunder; (e) onthe basis of the written representations received from the Directors as on 31stMarch 2018and taken on record by the Board of Directors none of the Directors is disqualified as on31stMarch 2018 from being appointed as a Director in terms of Section 164(2) of the Act;and (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 A".
(g) with respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 financial statements - Refer Note No. 32 to the financial statements; (ii)the Company did not have any long-term contracts including derivative 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
Place: Chennai Partner Date: 25.05.2018 Membership No. 022841
ANNEXURE "A" to the Independent Auditor's Report of even dateon 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 2018 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 andef3 cient 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.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over
3 nancial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the Auditor'sjudgement including the assessment of the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that: (i) pertain to themaintenance of records that in reasonable detail accurately and fairly re3 ect thetransactions and dispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and Directors of the company; and (iii) 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 standalone Ind AS financialstatements.
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.
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 2018 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.
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For Ganesh Prasad
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Firm Registration No. 000872S
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|Place: Chennai || |
|Date: 25.05.2018 || |
Membership No. 022841
Annexure "B" to the Independent Auditor's Report of even dateon the Standalone Ind AS Financial Statements of Loyal Textile Mills Limited.
The Annexure referred to in Paragraph 2under the heading"Report onOther Legal and Regulatory Requirements" of our Report on the standalone Ind ASfinancial statements of even date we report that: (i) a) The Company has maintainedproper records showing full particulars including quantitative details and situation offixed assets; b) The Company has a programme of periodic physical veri3 cation of fixedassets at all locations by which during the year the Company has veri3 ed fixed assets atselected locations in a phased manner and we were informed that no material discrepancieswere noticed on such veri3 cation. c) According to the information and explanations givento us and based on the the title deeds of immovable properties as disclosed in Note No.6.2 to the Standalone Ind AS Financial Statements are held in the name of the Companyexcept for the following:
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|Particulars || || || |
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(Rs. in Lakhs)
(Rs. in Lakhs)
|Gross Block as || |
|at 31st March || || || |
|2018 || || || |
(ii) As explained to us the inventories at all locations have beenphysically veri3 ed by the Management at regular intervals during the year.Thediscrepancies noticed on physical veri3 cation of stocks as compared to book records werenot material and the same have been properly dealt with in the books of account.
(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 companies3 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 ustheCompany has been regular in depositing undisputed statutory dues including ProvidentFund Employees' State Insurance Income Tax Sales Tax Service Tax Duty of CustomsDuty of Excise Value Added Tax Cess and any other Statutory Dues to the appropriateauthorities.In respect of undisputed Statutory dues payable in respect of above which areoutstanding as at 31st March 2018 for a period of more than six months from the date theybecame payable is given below:
|Nature of dues || |
Amount (Rs. In Lakhs)
|Advance Licensing || |
(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 Sales || |
Amount (Rs. in lakhs) 243.54
Period to which the dues belong Asst Year
|Forum where the dispute is pending Addl. Dy. |
|Tax || || |
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|Sales Tax |
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| || || ||Tribunal |
|VAT || |
Asst year 2007- 08 2008-09 2009-10 2010-11
|Addl. Dy Commissioner / Joint |
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|Commissioner Madurai Bench of Madras High Court |
|Central Excise || |
|Madurai Bench of Madras High Court |
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|Service Tax || |
2008-09 2010-11 2011-12
|Service Tax Appellate Tribunal |
(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
Place: Chennai Partner
Membership No. 022841