To the Members
M/S SHRI LAKSHMI COTSYN LIMITED
Report on the Audit of the StandalonelndAS Financial Statements
Opinion
We have audited the standalone financial statements of M/S SHRI LAKSHMI COTSYN
LIMITED("the Company"), which comprise the balance sheet as at 31st March 2019,
and the statement of Profit and Loss, statement of changes in equity and statement of cash
flows for the year then ended, and notes to the financial statements, including a summary
of significant accounting policies and other explanatory information
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of affairs of the Company
as at March 31, 2019, and profit/loss, changes in equityand its cash flows for the year
ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing specified under
section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are
further described in the Auditors Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial statements under the
provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
The Companys net worth is negative and the borrowings from Banks and Financial
Institutions have been classified as Non Performing Assets.
The Company is under corporate Insolvency Process under Insolvency And Bankrupty Code
(" the Code"). Its affairs, business and assets are being managed by Resolution
Professional appointed by Honble NCLT Allahabad vide its order dated 30/05/2018 under the
provisions of the code as Interim Resolution Professional and subsequently as Resolution
Professional. The matter is pending before the Honble NCLT Allahabad under the provisions
of the code, however, as the company in under CIRP, the Board stands suspended as on date.
The above factors cast a significant uncertainty on the Companys ability to continue
as a going concern, however the management is claiming that the Company is a going concern
and still in working position and the company had carried out manufacturing activities
during the year and Honble NCLT Allahabad had made requisite order to trace out the way
and investors for its continuity. Further as per the provisions of Insolvency and
Bankruptcy Code, it is incumbent upon Resolution Professional to manage the operations of
the company as a going concern.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance 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 a wholeand hence
we do not provide a pointwise specific opinion.
Matter of Emphasis
i) Attention is drawn to the financial statements which brings out in details the fact
that the Companys net worth has been eroded by its accumulated losses as at the end of
the current year and the company is under corporate Insolvency Process under Insolvency
And Bankruptcy Codeand also the matter is pending before the Honble NCLT Allahabad. This
along with other matters indicate the existence of multiple uncertainty that are
significant to the financial statement as a whole, cast doubt on the Companys ability to
continue as a going concern.
ii) We observed that on the basis of various audits and on the basis of its findings
the company was having a bank account with INDUSIND Bank since previous years and which
had been incorporated only during the previous year by Crediting Adjustment Relating To
Previous Years and Debiting Bank Account by Rs. 1260995.98, BEING OPENING BALANCE AS ON 1st
April,2018 as per Bank Statement, in absence of transactions relating to various previous
years, we are unable to comment on the consequential impact on the liabilities and assets
of the company.
iii) Share Application Money Pending for Allotment Amounting to Rs. 68.43 Crore is
still outstanding in books of accounts, as per management the case is pending before the
RBI, therefore we are unable to comment on the same.
Information Other Than The Financial Statements and Auditors Report thereon
The Companys Board of Directors are responsible for the preparation of other
information included in Boards Report its Annexures and Business Responsibility Report.
Our Opinion on the financial statements does not cover other information and we do not
express any form of assurance conclusion thereon. Our responsibility is to consider
whether the information is materially inconsistent with the standalone financial
statements or our knowledge obtained during the course of our audit or otherwise
materially misstated, and we draw the attention of the members that a Forensic Auditor had
been appointed by the Central Bank of India (Financial Creditor ) for a period April 2010
to March 2018, and various irregularities during the period under its review was mentioned
by the Auditor in their Report, the management had given its representation in this
regards to the concerned Bank.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash flows of the Company in
accordance wthe accounting principles generally accepted in India, including the
accounting Standards specified under section 133 of the Act. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statement that give
a true and fair view and are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditors report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Basis of Disclaimer of Opinion
iv) Attention is drawn to the financial statements which brings out in details the fact
that the Companys net worth has been eroded by its accumulated losses as at the end of
the current year and the company is under corporate Insolvancy Process under Insolvency
And Bankrupty Codeand also the matter is pending before the Honble NCLT Allahabad. This
along with other matters indicate the existence of multiple uncertainty that are
significant to the financial statement as a whole, cast doubt on the Companys ability to
continue as a going concern.
v) We observed that on the basis of various audits and on the basis of its findings the
company was having a bank account with INDUSIND Bank since previous years and which had
been incorporated only during the previous year by Crediting Adjustment Relating To
Previous Years and Debiting Bank Account by Rs. 1260995.98, BEING OPENING BALANCE AS ON 1st
April,2018 as per Bank Statement, in absence of transactions relating to various previous
years,we are unable to comment on the consequential impact on the liabilities and assets
of the company.
vi) The Turnover of the company is not reconciled with its GST returns, the turnover as
per GST Returns was Rs. 59.24 Cr. against turnover of Rs. 59.09 Cr. as per books of
accounts.
vii) Share Application Money Pending for Allotment Amounting to Rs. 68.43 Crore is
still outstanding in books of accounts, as per management the case is pending before the
RBI, therefore we are unable to comment on the same.
viii) No balance confirmation as on the end of the financial year from Debtors,
Creditors, loans and advances, Inoperative Bank accounts are made available to us hence we
are unable to comment on the same.
Other Matter
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
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 best
of 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 the
Company so far as it appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account
(d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st
March, 2019 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2019 from being appointed as a director in terms of Section
164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure A".
(g) Contingent Liabilities as on 31 March 2019 amounting to Rs. 2007.50 Crore on
account of export obligation for importing capital goods under EPCG Scheme.
(h) With respect to the other matters to be included in the Auditors 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 the explanations given to us:
i. The Company has not disclosed the impact of pending litigations on its financial
position in its financial statements. ;
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts - Refer Note 11(a) & 11(b) to the financial
statements;
iii. There is no dividend payable which is required to be transferred to the Investor
Education and Protection Fund by the Company.
|
For TANDON AND TANDON |
|
Chartered Accountants |
|
Registration No. 002C070C) |
| Place: Kanpur |
Prabhat Tandon |
| Date: 30/10/2019 |
(Partner) |
|
(Membership No.071254) |
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in Para 1 under ‘Report on Other legal and Regulatory
Requirements section of our report of even date)
Re: Shri Lakshmi Cotsyn Ltd. we report that:
(i) a. The company is maintaining proper records showing full particulars including
quantitative details and situation of fixed assets.
b. The company has a program of physical verification of fixed assets, so as to cover
all the items over a period of three years. In accordance with this programme, property,
plant and equipment were verified during the year and no material discrepancies were
noticed on such verification.
c. According to the information and explanations given to us and the records examined
by us and based on the registered sale deeds/transfer deeds etc. evidencing title in
immovable properties which are freehold, we report that the immovable properties
capitalized in the books of account of the company are held in its name.
(ii) a. According to the information, explanations and documents produced for our
verification, we report that the inventory of traded goods and immovable properties have
been physically verified by the management at reasonable intervals during the year at
various locations and no material discrepancies were noticed on such physical
verification.
b. The procedures of physical verification of inventories followed by the management
are reasonable and adequate in relation to the size of the company and the nature of its
business.
c. The company has maintained proper records of inventory. According to the information
and explanations given to us and on the basis of our examination of records, we are of the
opinion that no material discrepancies were noticed on physical verification and the same
have been properly dealt with in the books of accounts.
(iii) a. That as regards the loans to entities covered in the Register maintained u/s
189 of the Companies Act, 2013, it is reported that:
i. The company has not granted loan to its Subsidiary and associates during the year
under consideration.
ii. In our opinion and according to the information and explanations given to us, the
terms and conditions of the grant of such loans are not prejudicial to the companys
interest.
iii. That as per the information and explanations given to us, there is no repayment
schedule in respect of the short term advance given to the subsidiary and the same is
repayable on demand. That, as regards the loans given to the Associate concerns, as per
the information and explanations given to us and the terms of loans/advances made by the
company, no advances are due for payment within one year from the close of the year.
iv. That as per the information and explanations given to us and terms of the loans
given by the company, there are no amounts overdue on account of interest/principal.
(iv) In Our opinion and according to the information and explanations given us, the
company has complied with the provisions of section 185 and 186 of the Companies Act, 2013
in respect of grant of loans, making investments and providing guarantees.
(v) In our opinion and according to the information and explanations given to us, the
company has not accepted any public deposits. No Order has been passed by the Company Law
Board/National Company Law Tribunal or Reserve Bank of India.
(vi) In our opinion and according to the information and explanations given to us, the
company is not liable for maintenance of cost records u/s 148 of the Companies Act, 2013.
(vii) The company is regular in depositing with appropriate authorities undisputed
statutory dues including investor education protection fund, income tax, sales tax, wealth
tax, service tax, & customs duty and other material statutory dues applicable to it.
According to the information and explanations given to us, no undisputed amounts payable
in respect of provident fund, income tax, sales tax, wealth tax, customs duty, VAT, cess
and other material statutory dues were in arrears as at 31st March 2019 for a
period of more than six months from the date they became payable, except for PF and ESI as
mentioned below:-
| SI. No. Particulars |
Amount (In Lacs.) |
| 1. Contribution to Employee Provident Fund |
1987.50 |
| 2. Contribution to Employee State Insurance |
316.25 |
(viii) The Company has outstanding dues to financial institutions, banks and others
during the year and all the loan accounts of the company are NPA as on date. The
bank/financial institution wise details of outstanding amounts (as per books of accounts)
are as under:-
| SI. No. Name of Bank |
Rs. In Lacs |
| 1 Andhra Bank |
7,048.64 |
| 2 Bank of Baroda |
8,721.69 |
| 3 Canara Bank |
4,945.54 |
| 4 Central Bank of India |
6,344.93 |
| 5 Corporation Bank |
4,154.04 |
| 6 Edelweiss Assets Reconstruction Company Ltd. |
7,066.10 |
| 7 Exim Bank |
2,339.68 |
| 8 IDBI Bank |
307.64 |
| 9 IFCI Ltd. |
526.63 |
| 10 Indian Bank |
6,847.94 |
| 11 Oriental Bank of Commerce |
2,804.51 |
| 12 Punjab National Bank |
3,574.14 |
| 13 Saraswat Bank |
10,278.83 |
| 14 State Bank of india |
18,190.22 |
| 15 Syndicate Bank |
41,654.95 |
| 16 Union Bank of India |
37,012.48 |
| 17 Uco Bank |
2,244.76 |
| 18 Vijaya Bank |
3,164.80 |
| Grand Total |
3,27,227.53 |
(ix) In our opinion and according to the information and explanations given to us, the
company has not applied term loans, hence not applicable.
(x) According to the information and explanations given to us, no fraud by the company
or on the company, by its officers or employees has been noticed or reported during the
course of our audit.
(xi) In our opinion and according to the information and explanations given to us, the
company has paid/provided managerial remuneration in accordance with the requisite
approvals mandated by the provisions of section 197 r.w. Schedule V of the Companies Act,
2013.
(xii) The Company is not a Nidhi Company and hence the reporting under clause (xii) of
CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us,
the company has complied with Sections 177 and Section 188 of the Companies Act, 2013,
where applicable, for all transactions with related parties and the details of related
party transactions have been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures and hence reporting under
clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, the
company has not entered into any non-cash transactions with its directors or directors of
its subsidiary or associate companies or persons connected with them during the year under
consideration and hence provisions of section 192 of Companies Act, 2013 are not
applicable.
(xvi) In our opinion the company is not required to be registered under Section 45- IA
of the Reserve Bank of India Act, 1934.
|
For TANDON AND TANDON |
|
Chartered Accountants |
|
Registration No. 002C070C) |
| Place: Kanpur |
Prabhat Tandon |
| Date: 30/10/2019 |
(Partner) |
|
(Membership No.071254) |
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in Para 2(f) under ‘Report on Other legal and Regulatory
Requirements section of our report of even date)
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER SECTION 143(3)(l) OF THE COMPANIES ACT,
2013 ("THE ACT")
We have audited the internal financial controls with reference to financial statements
of Shri Lakshmi Cotsyn Limited ("the Company") as of March 31, 2019 in
conjunction with our audit of the financial statements of the Company for the year ended
on that date
Opinion
In our opinion, to the best of our information, and according to the explanations given
to us, the company has, in all material aspects, an adequate internal financial controls
system over financial reporting and such internal financial controls with reference to
financial statements were operating effectively as at March 31st 2019, based on
the internal control over financial reporting criteria established by the company
considering the essential components of internal control stated in Guidance Note of Audit
of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financialcontrols based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls with reference to financial statements based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of Internal financial controls with
reference to financial statements (the "Guidance Note") and the Standards on
Auditing, to the extent applicable to an audit of internal financial controls, both issued
by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls with reference to
financial statements was established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial with reference to financial statements and their operating
effectiveness. Our audit of internal financial controls with reference to financial
statements included obtaining an understanding of internal financial controls over
financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal controls based on the
assessed risk. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
with reference to financial statements.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial
Statements
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls with reference to
financial statements to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
|
For TANDON AND TANDON |
|
Chartered Accountants |
|
Registration No. 002C070C) |
| Place: Kanpur |
Prabhat Tandon |
| Date: 30/10/2019 |
(Partner) |
|
(Membership No.071254) |
+91-9892691696
