Lahoti Overseas Ltd Directors Report.

To the Members of Laho Ov erseas Limited

Report on the Audit of the Standalone Ind AS Financial

Statements

Opinion

We have audited the standalone financial statements of Laho Overseas Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2020, the Statement of Pro t and Loss (including Other Comprehensive Income), statement of changes in equity, Statement of Cash Flows for the year then ended and notes to the standalone Ind AS financial statements, including a summary of significant accounng policies and other explanatory informaon (hereina er referred to as "the standalone Ind AS financial statements").

In our opinion and to the best of our informaon and according to the explanaons given to us, the aforesaid standalone Ind AS financial statements gives the informa on required by the Act in the manner so required and gives a true and fair view in conformity with the Indian Accounng Standards prescribed under Secon 133 of the Act read with Companies (Indian Accounng Standards) Rules, 2015, as amended, ("Ind AS") and other accounng principles generally accepted in India, of the state of a airs of the Company as at March 31, 2020, and profit and total comprehensive income, 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 Auding (SAs) specified under secon 143(10) of the Companies Act, 2013 and IND AS. Our responsibili es under those Standards are further described in the Auditors Responsibilies for the Audit of the Ind AS Financial Statements secon of our report. We are independent of the Company in accordance with the Code of Ethics issued by The Instut e of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibili es 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.

Key Audit Ma_ers

Key audit ma_ers are those ma_ers that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These ma_ers were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these ma_ers. We have determined the ma_ers described below to be the key audit ma_ers to be communicated in our report.

Descrip_on of Key Audit Ma_er

Sr. No. The Key Audit Matter How the matter was addressed in our audit
1 Foreign Exchange Gain/Loss: Our audit procedures included:
The Company has major revenue from export of yarns and other varied sectors which leads to the inflow and outflow of foreign exchange in regular course of business during the year. a. Assessing the appropriateness of the accounting policies and standards followed by company with applicable accounting standards.
The company is into the practice of entering in the forward contracts with the bank against export orders and the same leads to foreign exchange gain/loss while receiving the payment after the specified lock in period. b. Verifying companys IT and manual controls relating to recording of foreign transactions and fair valuation according to required IND AS.
As per the requirement under IND AS, fair valuation of the receivables has been done based on the exchange rates prevailing as on 31st March, 2020. The gain or loss of the same is routed through Other Comprehensive Income. c. Verifying the forward contract entered with banks for export sales made.
2 Revenue Recognition: Our audit procedures included:
Revenue is measured net of discounts, rebates earned by customers on the companys sales. a. Assessing the appropriateness of the revenue recognition accounting policies, including those relating to discounts, rebates and incentives by comparing with applicable accounting standards.
Due to companys presence across different marketing regions in various countries and the competitive business environment, the estimation of the various types of discounts to be recognised based on sales made during the year is material and considered to be judgemental. b. Testing the design, implementation and operating effectiveness of the Companys general IT controls over the Companys systems and manual controls which govern recording of revenue and discounts, rebates and incentives in the general ledger accounting system.
c. Performing substantive testing by selecting samples of revenue transactions recorded during the year by verifying the underlying documents, which included sales invoices/contracts and shipping documents.
d. Assessing manual journals posted to revenue to identify unusual items.
3 Adoption of Ind AS 115 Revenue from Contracts with Customers: Our audit procedures included:
As described in Note 19 to the Standalone Financial Statements, the Company has adopted Ind AS 115, Revenue from Contracts with Customers (‘Ind AS 115) which is the new revenue accounting standard. The application and transition to this accounting standard is complex and is an area of focus in the audit. Our audit procedures on adoption of Ind AS 115, Revenue from contracts with Customers (‘Ind AS 115), which is the new revenue accounting standard, include
The revenue standard establishes a comprehensive framework for determining whether, how much and when revenue is recognized. This involves certain key judgments relating to identification of distinct performance obligations, determination of transaction price of identified performance obligation, the appropriateness of the basis used to measure revenue recognized over a period. Additionally, the standard mandates robust disclosures in respect of revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. a. Evaluated the design and implementation of the processes and internal controls relating to implementation of the new revenue accounting standard;
The Group adopted Ind AS 115 and applied the available exemption provided therein, to not restate the comparative periods. b. Evaluated the detailed analysis performed by management on revenue streams by selecting samples for the existing contracts with customers and considered revenue recognition policy in the current period in respect of those revenue streams;
4 Note 39 to the Standalone Ind AS Financial Statements, which describes the uncertainties and the impact of Covid-19 pandemic on the Companys operations. c. Evaluated the cumulative effect adjustments as at 1 April 2018 for compliance with the new revenue standard; and
d. Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures.
The impact on relevant assets, source of income and costs has been overall reviewed by us and we noticed that there is no impact on any of the items till now and as assessed and provided for by the Company.

 

Managements Responsibility for Standalone Financial

Statements

The Companys Board of Directors is responsible for the ma_ers stated in secon 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparaon of these standalone Ind AS financial statements that give a true and fair view of the financial posion, financial performance, changes in equity and cash flows of the Company in accordance with the accounng principles generally accepted in India, including the Indian Accounng Standards (Ind AS) specified under secon 133 of the Act read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accoun ng records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preven ng and detec ng frauds and other irregularies; selecon and applicaon of appropriate accounng policies; making judgments and esma tes that are reasonable and prudent; and design, implementaon and maintenance of adequate internal financial controls, that were operang e ecv ely for ensuring the accuracy and completeness of the accounng records, relevant to the preparaon and presentaon of the Ind AS financial statement that give a true and fair view and are free from material

misstatement, whether due to fraud or error.

In preparing the Ind AS financial statements, management is responsible for assessing the Companys ability to connue as a going concern, disclosing, as applicable, ma_ers related to going concern and using the going concern basis of accoun ng unless management either intends to liquidate the Company or to cease operaons, or has no realisc alternav e but to do so.

Those Board of Directors are also responsible for

overseeing the companys financial reporng process.

Auditors Responsibili es for the Audit of the Ind AS

Financial Statements

Our objec ves are to obtain reasonable assurance about whether the Ind AS 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 Ind AS financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-secon (11) of secon 143 of the Companies Act, 2013, w e give in the Annexure A, a statement on the ma_ers specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Secon 143(3) of the Act, we report that:

a) We have sought and obtained all the informaon and explanaons 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 examinaon of those books. c) The Balance Sheet, the Statement of Pro t and Loss, the Statement of changes in equity 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 Ind AS financial statements comply with the Accoun ng Standards specified under Secon 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the wri en representaons received from the directors as on 31st March, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2020 from being appointed as a director in terms of Secon 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporng of the Company and the operang e ecv eness of such controls, refer to our separate Report in "Annexure B".

g) With respect to the other ma_ers 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 informa on and according to the explanaons given to us:

I The Company does not have any pending lig aons

which would impact its financial posion;

ii. The Company has made provision, as required under the applicable law or accounng standards, for material foreseeable losses, if any, on long-term contracts including derivav e contracts;

iii. There were no amounts which were required to be transferred to the Investor Educaon and Protecon Fund by the Company.

For PALAN & Co

Firm Regn. No. : 133811W

Chartered Accountants

Sd/-

Chandrahas K. Palan

Proprietor

Membership Number: 100741

UDIN : 20100741AAAAAW7843

Place: Mumbai Date: July31,2020

Annexure - A to the Independent Auditors Report

The Annexure referred to in Independent Auditors Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31st March 2020, we report that:

(i)(a) In our opinion, the Company has maintained proper records showing full parcular s including quant av e details and situaon of Property, Plant and Equipment.

(i)(b) As explained to us, physical veri ca on of Property, Plant and Equipment is being conducted in a phased programme by the management designed to cover all the assets at reasonable intervals, which in our opinion is reasonable having regard to the size of the Company and the nature of assets. According to the informaon and explanaons given to us no material discrepancies were noced on such veri caon.

(i)(c) According to the informaon and explanaons given to us and on the basis of our examinaon of the records of the Company, the tle deeds of immovable properes are held in the name of the Company.

(ii) As explained to us veri caon of inventory has been conducted at reasonable intervals by the management and discrepancies noced on such veri caon between physical stocks and book records were not material considering the operaons of the Company and the same have been properly dealt with in the books of account.

(iii) In our opinion and according to the informaon and explanaons given to us, the Company has not granted any loans, secured or unsecured, to any companies, rms, Limited Liability Partnerships or other pares as covered in the register maintained under Secon 189 of the Act.

(iv) In our opinion and according to the informaon and explanaons given to us, the Company has complied with the provisions of secon 185 and 186 of the Act, with respect to loans, investments and guarantees made.

(v) In our opinion and according to the informaon and explanaons given to us, the Company has not accepted any deposit within the meaning of Secon 73 to 76 of the Act, and the rules framed thereunder.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records have been prescribed under Secon 148 (1) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examinaon of the records with a view to determining whether they are accurate or complete.

(vii)(a) According to the records of the Company and the informaon and explanaons given to us, the Company has generally been regularly deposi ng with the appropriate authori es undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales-Tax, Duty of Customs, Duty of Excise, Value added Tax, Goods and Service Tax, Cess and any other statutory dues applicable to it. There are no undisputed statutory dues as referred to above as at 31st March, 2020 outstanding for a period of more than six months from the date they become payable.

(vii)(b) According to the informaon and explanaons given to us, the dues in respect of Income Tax, Sales Tax, Duty of Customs, Excise Duty and Service Tax is not pending.

(viii) Based on our audit procedures and according to the informaon and explanaons given by the management, the Company has not defaulted in repayment of loans from bank. Further as per the records of the Company, during the year there were no loans or borrowings from any financial instuon, government or debenture holders.

(ix) In our opinion and according to the informaon and the explanaons given to us, the term loans have been applied for the purposes for which they were obtained. Further as per the records, the Company did not raise any money by way of ini al public offer or further public offer (including debt instruments).

(x) Based upon the audit procedures performed and to the best of our knowledge and belief and according to the informaon and explanaons given to us no fraud by the company or any fraud on the Company by its o cers or employees has been noced or reported during the year.

(xi) According to the informaon and explanaons give to us and based on our examinaon of the records of the Company, the Company has paid/provided for managerial remuneraon in accordance with the requisite approvals mandated by the provisions of secon 197 r ead with Schedule V to the Act.

(xii) In our opinion and according to the informaon and explanaons given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the informaon and explanaons given to us and based on our examinaon of the records of the Company, transacons with the related pares are in compliance with secons 177 and 188 of the Act where applicable and details of such transacons have been disclosed in the financial statements as required by the applicable Indian Accounng Standards.

(xiv) According to the informaon and explanaons given to us and based on our examinaon of the records of the Company, the Company has not made any preferen al allotment or private placement of shares or fully or partly converble debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

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

For PALAN & Co

Firm Regn. No. : 133811W

Chartered Accountants

Sd/-

CHANDRAHAS K. PALAN

Proprietor

Membership No: 100741 Place: Mumbai

UDIN : 20100741AAAAAW7843

Date: 31 July, 2020

Annexure - B to the Independent Auditors Report

Report on the Internal Financial Controls under Clause (i) of Sub-secron 3 of Sec_on 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporng of Laho Overseas Limited ("the Company") as of 31st March, 2020 in conjuncon with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial

Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporng criteria established by the Company considering the essenal components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Ins tute of Chartered Accountants of India (ICAI). These responsibilies include the design, implementaon and maintenance of adequate internal financial controls that were operang e ecv ely for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevenon and detecon of frauds and errors, the accuracy and completeness of the accoun ng records, and the mely prepara on of reliable financial informaon, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporng based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auding , issued by ICAI and deemed to be prescribed under secon 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Instut e 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 over financial reporng was established and maintained and if such controls operated e ec vely in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporng and their opera ng e ec veness. Our audit of internal financial controls over financial repor ng included obtaining an understanding of internal financial controls over financial repor ng, assessing the risk that a material weakness exists, and tesng and evaluang the design and operang e ecv eness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone 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 over financial reporng.

Meaning of Internal Financial Controls over Financial

Repor_ng

A companys internal financial control over financial reporng is a process designed to provide reasonable assurance regarding the reliability of financial reporng and the preparaon of financial statements for external purposes in accordance with generally accepted accounng principles. A companys internal financial control over financial reporng includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transacons and disposions of the assets of the company; (2) provide reasonable assurance that transac ons are recorded as necessary to permit preparaon of financial statements in accordance with generally accepted accoun ng principles, and that receipts and expenditures of the company are being made only in accordance with authorisa ons of management and directors of the company; and (3) provide reasonable assurance regarding prevenon or mely detecon of unauthorised acquision, use, or disposion of the companys assets that could have a material effect on the financial statements.

Inherent Limitaons of Internal Financial Controls Over

Financial Reporng

Because of the inherent limitaons of in ternal financial controls over financial repor ng, 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, projecons of any evaluaon of the internal financial controls over financial reporng to future periods are subject to the risk that the internal financial control over financial reporng may become inadequate because of changes in condions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an internal financial controls with reference to financial statements as at 31st March, 2020, 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

For PALAN & Co

Firm Regn. No. : 133811W

Chartered Accountants

Sd/-

CHANDRAHAS K. PALAN

Proprietor

Membership No: 100741 Place: Mumbai

UDIN : 20100741AAAAAW7843

Date: 31 July, 2020