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Lumax Industries Ltd.

BSE: 517206 Sector: Auto
NSE: LUMAXIND ISIN Code: INE162B01018
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NSE 00:00 | 27 May 1159.15 106.00
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VOLUME 4295
52-Week high 1820.00
52-Week low 840.00
P/E 22.30
Mkt Cap.(Rs cr) 1,083
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1050.90
CLOSE 1050.90
VOLUME 4295
52-Week high 1820.00
52-Week low 840.00
P/E 22.30
Mkt Cap.(Rs cr) 1,083
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lumax Industries Ltd. (LUMAXIND) - Auditors Report

Company auditors report

To the Members of Lumax Industries Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Lumax Industries Limited("the Company") which comprise the standalone balance sheet as at 31 March2021 and the standalone statement of profit and loss (including other comprehensiveincome) the standalone statement of changes in equity and the standalone statement ofcash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation. (hereinafter referred to as "the standalone financial statements"or "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("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 31 March 2021 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 (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 StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled 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 on the Standalonefinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

The Key Audit Matter How the matter was addressed in our audit
Revenue Recognition See note 3(k) 24 and 44 to the standalone financial statements In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Revenue is measured at fair value of the consideration received or receivable after deduction of any discounts/ rebates and any taxes or duties collected on behalf of the government such as goods and services tax etc. Revenue is recognised only to the extent that it is highly probable a significant reversal will not occur. The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. - assessed the appropriateness of the accounting policy for revenue recognition including those relating to price increase/ decrease and discounts as per the applicableaccounting standards;
The Company considers certain variable considerations such as price adjustment and discounts to be passed to customers on the basis of agreed terms negotiations with customers/ commercial considerations which involves significant judgement and estimates to arrive at the amount of price adjustments to be accrued for adjustment to revenue. - evaluated the design and implementation of the Company’s key internal financial controls over revenue recognition including those relating to price increase/decrease and discounts and tested the operating effectiveness of such controls on selected transactions;
We have considered revenue recognition as a key audit matter on account of the qualitative and quantitative factors as mentioned above. - Inspected samples identified by applying statistical sampling from the underlying documents that revenue has been booked correctly and in the correct period with reference to supporting invoices terms and conditions with customers and receipts from customers;
- Inspected on a sample basis the supporting documents for sales transactions recorded during the period closer to the year end to determine whether revenue was recognised in the correct period;
- evaluated management’s methodology and assumptions used in the calculations of price adjustments. Inspected on sample basis debit note/credit notes issued receipts/payment made as per approved customer contracts agreed price adjustments passed on to the customers and evaluated completeness arithmetical accuracy and validity of the data used in the computation of price adjustments;
- performed analytical procedures on current year revenue and price adjustments based on trends and where appropriate conducting further enquiries and testing;
- inspected manual journals posted to revenue to identify unusual items;
- assessed the adequacy and appropriateness of the disclosures made in accordance with the relevant accounting standard.

Other Information

The Company’s management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany’s annual report but does not include the financial statements and ourauditors’ report thereon.

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 thisregard.

Management’s and Board of Directors’ Responsibility for the StandaloneFinancial Statements

The Company’s Management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs profit/lossand other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the standalone financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements the Management and Board of Directorsare responsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financialreporting process.

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

Obtain an understanding of internal controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct 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 accountingpolicies used and the reasonableness of accounting estimates and related disclosures inthe standalone financial statements made by the Management and Board of Directors.Conclude on the appropriateness of the Management and Board of Directors use of the goingconcern basis 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 auditor’s 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 auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern. Evaluate the overallpresentation structure and content of the standalone financial statements including thedisclosures and whether the standalone financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

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 aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government in terms of section 143 (11) of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. (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 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 financial statements comply with the Ind ASspecified under section 133 of the Act;

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act; and

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 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 as at 31 March 2021 onits financial position in its standalone financial statements - Refer Note 40 to thestandalone financial statements;

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

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and iv. The disclosures in thestandalone financial statements regarding holdings as well as dealings in specified banknotes during the period from 8 November 2016 to 30 December 2016 have not been made inthese financial statements since they do not pertain to the financial year ended 31 March2021.

(C) With respect to the matter to be included in the Auditors’ Report undersection 197(16): In our opinion and according to the information and explanations given tous the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 read with Schedule V of the Act. Theremuneration paid to its directors is in excess of the limits laid down under Section 197read with Schedule V of the Act however necessary approval with respect to the same hasbeen obtained by the Company (refer note 38 to the standalone financial statement). TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For B S R & Associates LLP

Chartered Accountants

Firm Registration No. 116231W/W-100024

Manish Kapoor

Partner

Membership No.: 510688

ICAI UDIN: 21510688AAAABC3961

Place: Gurugram

Date: 11 June 2021

Annexure A to the Independent Auditor’s report

The Annexure referred to in our Independent Auditor’s Report to the members of theCompany on the Standalone financial statements for the year ended 31 March 2021 we reportthat:

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

(b) The Company has a regular programme of physical verification of its fixed assets inwhich all fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were physically verified by themanagement in the current year. In our opinion the periodicity of physical verificationis reasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties of landand buildings included under the head "Property plant and equipment" are heldin the name of the Company as at the balance sheet date.

(ii) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company inventory except stock lying with third partiesand goods in transit has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. Confirmations have beenobtained for stock lying with third parties at the year-end. According to the informationand explanations given to us the discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been properly dealt within the books of account.

(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. Accordingly paragraph 3 (iii) of the Order is not applicable to the Company.

(iv) According to the information and explanations given to us the Company has notgiven any loans or provided any guarantee or security as specified under section 185 and186 of the Companies Act 2013. Moreover in respect of the investments made by theCompany requirements of section 186 of the Companies Act 2013 have been complied with.

(v) According to the information and explanations given to us the Company has notaccepted any deposits as mentioned in the directives issued by the Reserve Bank of Indiaand the provisions of section 73 to 76 or any other relevant provisions of the Act and therules framed there under. Accordingly paragraph 3(v) of the Order is not applicable tothe Company.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013 in respect of certain products manufactured bythe Company. We have broadly reviewed the cost records maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government of India under sub-section (1) of Section 148 of the Act and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(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 ofaccount in respect of undisputed statutory dues including Provident Fund Employees StateInsurance Income-tax Duty of customs Goods and Services tax Cess and other materialstatutory dues have generally been regularly deposited with the appropriate authoritiesthough there has been slight delays in few cases related to payment of Income-taxProvident fund Labour welfare fund and Professional tax. Further as explained to us theCompany did not have any dues on account of Value added tax Sales tax Duty of excise andService tax during the current year. According to the information and explanations givento us no undisputed amounts payable in respect of Provident Fund Employees StateInsurance Income-tax Sales tax Service tax Duty of customs Duty of excise Valueadded tax Goods and Services tax Cess and other material statutory dues were in arrearsas at 31 March 2021 for a period of more than six months from the date they became due forpayment.

(b) According to the information and explanations given to us except as stated belowthere are no dues of Income tax Sales tax Service tax Goods and Services tax Duty ofcustoms Duty of excise and Value added tax that have not been deposited with theappropriate authorities on account of any dispute:

Name of the Statute Nature of the dues Amount (Rs. in lakhs) Amount paid (Rs. in lakhs) Period to which amount relates Forum where dispute is pending
Finance Act 1994 Demand for disallowance of Cenvat credit in respect of outward transportation 2.31 - 2014-15 Commissioner of Excise (Appeals)
Customs Act 1962 Demand on account of classification of certain imported goods 6.51 - 2016-17 Commissioner of customs (Appeals)
Customs Act 1962 Demand for wrongful availment of duty drawback. 1.16 - 2015-16 Commissioner of customs (Appeals)
Customs Act 1962 Demand for wrongful availment of duty drawback. 2 - 2015-16 Deputy Commissioner
Central Excise Act 1956 Demand for short payment of excise duty for non-inclusion of designs/ drawings provided by the Customer. 518.66 - 2013-14 to 2017-18 Director General of GST Intelligence
Central Excise Act 1956 Demand for short payment of excise duty for non-inclusion of designs/ drawings provided by the Customer. 719.15 - 2013-14 to 2018-19 Director General of GST Intelligence
Income tax Act 1961 Demand for disallowance of loyalty incentives and under valuation of Inventory 3083.71 - AY 2018-19 Income Tax Appellate Tribunal
Central Sales Tax Act 1961 Demand against non submission of various Forms 84.89 - 2011- 12 and 2015-16 to 2017-18 Assessing officer
Central Sales Tax Act 1961 Demand against non- submission of various Forms 20.23 - 2001-02 Joint Commissioner of Sales tax (Appeals)

(viii) In our opinion and according to the information and explanations given to usthe Company has availed the moratorium as prescribed by Reserve Bank of India andaccordingly has not defaulted in repayment of dues to banks or financial institutions.The Company did not have any loans or borrowings from government or any dues to debentureholders during the year.

(ix) According to information and explanations given to us the Company has not raisedany money by way of initial public offer or further public offer (including debtinstruments) and did not have any term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid/provided for managerial remuneration inaccordance with 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.

(xiii) According to information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable.

The details of such related party transactions have been disclosed in the standalonefinancial statements as required by applicable accounting standards.

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

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with directors. Accordingly paragraph3(xv) of the Order is not applicable.

(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.

For B S R & Associates LLP

Chartered Accountants

Firm Registration No. 116231W/W-100024

Manish Kapoor

Partner

Membership No.: 510688

ICAI UDIN: 21510688AAAABC3961

Place: Gurugram

Date: 11 June 2021

Annexure B to the Independent Auditor’s report on the standalone financialstatements of Lumax Industries Limited for the period ended 31 March 2021

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph (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 the standalonefinancial statements of Lumax Industries Limited ("the Company") as of 31 March2021 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 the standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2021 based on the internal financialcontrols with reference to the standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

Management’s and Board of Directors’ Responsibility for Internal FinancialControls

The Company’s management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to the standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote. 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 company’spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to the standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to the standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to the standalone financial statements were establishedand maintained and whether such controls operated effectively in all material respects.Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to the standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tothe standalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’s judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany’s internal financial controls with reference to the standalone financialstatements.

Meaning of Internal Financial controls with Reference to the Standalone FinancialStatements

A company’s internal financial controls with reference to the standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company’s internalfinancial controls with reference to the standalone financial statements include thosepolicies 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 havea material effect on the Standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to the StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tothe standalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to the standalone financial statements to future periods aresubject to the risk that the internal financial controls with reference to the standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

For B S R & Associates LLP

Chartered Accountants

Firm Registration No. 116231W/W-100024

Manish Kapoor

Partner

Membership No.: 510688

ICAI UDIN: 21510688AAAABC3961

Place: Gurugram

Date: 11 June 2021

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