We have audited the accompanying standalone financial statements of THE LAKSHMI MILLS COMPANY LIMITED (“the
Company”), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including
Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement and for the year
then ended and notes to the financial statements including a summary of the material accounting policies and
other accounting policies and other explanatory information (hereinafter referred to as the ‘standalone financial
statements’).
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 Companies Act, 2013 [“the Act”], in the
manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed
under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules 2015,
as amended (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2025, its LOSS 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 Auditing (SAs) specified under section 143(10)
of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor’s
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 on the standalone
financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined the matters described below to be the key
audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the Standalone financial statements section of our report, including in relation to
these matters.
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S. No.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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1
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Evaluation of uncertain tax positions
(Refer Note No. 30 to the standalone financial
statements).
The Company has uncertain tax positions of '
899.74 Lakhs including matters under dispute
which involves significant judgment to determine
the possible outcome of these disputes as on the
balance sheet date.
The Company assesses the need to make a
provision or disclose a contingency on a case-to-
case basis considering the underlying facts of each
matter, in consultation with its legal advisors. This
involves a high level of management judgment
and assumptions which impact the risk assessment
and consequential provisioning and disclosure of
contingencies in the financial statements. This area
is significant to our audit, since the completeness
and accuracy of accounting and disclosures for
contingencies is dependent on such management
judgment and assumptions.
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Principal Audit Procedures
We obtained details of the completed tax
assessments and demands and the statutory
appeals preferred by the Company before
appropriate appellate forums.
We evaluated and tested the Company’s processes
and controls for monitoring of litigations,
disputes, compliances and assessment thereof
for determining the likely outcome of disputes.
We reviewed the summary of the litigations
obtained from the management and discussed
the material cases to determine the Company’s
assessment of the likelihood and magnitude of
any liability that may arise.
We analysed the management’s underlying
assumptions and grounds in estimating the
tax provision and the possible outcome of the
disputes at appellate forums.
We considered legal precedents, other rulings
and legal opinions obtained by the management
in evaluating the management’s judgments and
assumptions on these uncertain tax positions.
Additionally, we considered the effect of new
information, if any, in respect of material
uncertain tax positions and other uncertain
position of the tax dues under dispute, to
evaluate whether any change was required to
management’s position on these uncertainties.
We tested the adequacy of disclosures in the
financial statements. We also obtained necessary
representations from the management in regard
to the provisioning and disclosures in respect of
the litigations.
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S. No.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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2
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Recoverability of income tax assets and
Receivables from Government authorities
(Refer Note 8 & 6A to the standalone financial
statements)
As at March 31, 2025 non-current assets in respect
of Income tax assets to the extent of ' 106.23 lakhs
(Net of provisions), current tax assets to the extent
of ' 292.06 Lakhs (Net of provisions) and balances
with revenue authorities to the extent of ' 4.86
Lakhs are outstanding.
This area is significant to our audit, since the
completeness and accuracy of accounting and
disclosures for determining the recoverability of
these items.
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Principal Audit Procedures
We analysed and reviewed the nature of the
amounts recoverable, the sustainability and the
likelihood of recoverability upon final resolution.
The income tax assets represents tax deducted
at source, the taxes paid in advance and taxes
paid towards disputed dues.
The balances with revenue authorities represent
input tax credits eligible for set off. We
considered legal precedents, other rulings and
legal opinions obtained by the management and
the management’s representations in this regard,
in evaluating the management’s judgments and
assumptions on the recoverability / set off of
these balances with revenue authorities.
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3
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Trade receivables and expected credit loss:
(Refer Note 10 to the standalone financial
statements).
The trade receivables as at March 31, 2025 is
' 2353.95 Lakhs and provision for expected credit
loss of ' 269.59 Lakhs.
The provision for the expected credit losses involves
certain judgment with respect to the assessment of
probabilities of default and recovery.
We have considered assessment of expected credit
loss for receivables as a key audit matter because
of the significant management judgement involved
in its estimation and provision.
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Principal Audit procedures
We assessed the appropriateness of the
accounting policy for expected credit loss as per
the relevant accounting standards.
We obtained an understanding of and assessed
the design, implementation and operating
effectiveness of key controls relating to collection
monitoring process, credit control process and
estimation of expected credit losses.
We tested the controls relating to classification
of the receivable balances included in the
receivables ageing report.
We reviewed the ageing, tested the validity of
the receivables, discussed with the management
on the disputes, if any, with the customers,
understood and evaluated the reason for delay
in realization of the receivables and possibility of
realization of the aged receivable.
We assessed the methodology used by
management to estimate the expected credit loss
provision and its compliance with the relevant
accounting standard.
We assessed the reasonableness of estimate of
expected credit loss and performed procedures
relating to the accuracy of the inputs used.
We assessed the adequacy of disclosures relating
to trade receivables and related credit risk.
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S. No.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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4
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Assessment of carrying value of Investments
[Refer Statement of Changes to Equity and Note
No.5 to the standalone financial statements]
The Company has invested in equity instruments
that are stated at fair values through OCI and the
cumulative fair value changes through OCI (net of
deferred taxes) is ' 76,423.57 Lakhs as on March
31, 2025. In line with general market fluctuations,
there are significant fair value changes in these
investments. The evaluation of their fair values is
considered as a key audit matter given the relative
significance of the value of investments and the
fluctuations in their fair values.
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Principal Audit Procedures
Our audit procedures in relation to assessing
the carrying value of these investments include
ascertaining from relevant appropriate external
sources that the equity instruments are carried
at fair value as on 31st March 2025.
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5
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Assessing the recoverability of the carrying value
of Investment property including investment
properties under construction
[Refer Note No.4 to the standalone financial
statements]
As at 31st March 2025, the carrying value of the
Investment Property is ' 17,882.81 Lakhs and
carrying value of Investment Property under
construction is ' 108.64 Lakhs. The Company
reviews on an annual basis such carrying values for
any indicators of impairment to ensure that the
Investment Properties are not carried at more than
their recoverable amount.
We considered the assessment of the carrying value
of Investment Property as a key audit matter due
to the significance of the balance and significant
estimates and judgments involved in the impairment
assessment and disclosure of fair values.
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Principal Audit Procedures
Our audit procedures included, among other
things the following:
We assessed the Company’s valuation
methodology and assumptions based on current
economic and market conditions in determining
the recoverable amount.
We obtained and read the valuation report used
by the Company’s management for determining
the fair value (‘recoverable amount’) of the
investment property.
We considered the independence, competence
and objectivity of the external specialist
involved by the management in determination of
valuation.
We assessed the Company’s valuation methodology
applied and compared key property related data
used as input with historical actual data.
We assessed the key assumptions used in
Company’s valuation methodology.
We compared the recoverable amount of the
investment property to the carrying value in
books.
We assessed the disclosures made in the financial
statements in this regard.
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We have determined that there are no other key audit matters to communicate in our report.
information Other than the standalone Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the preparation of the other information. The other
information comprises the information included in the Management Discussion and Analysis, Board’s Report
including Annexures to Board’s Report, Report on Corporate Governance and Shareholder’s Information, but does
not include the standalone financial statements and our report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears
to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and those charged with governance for the standalone Financial Statements
The Company’s 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 (including Other Comprehensive Income), Changes in
Equity of the Company and its cash flows in accordance with the Indian Accounting Standards (IND AS) prescribed
under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended,
and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding 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 standalone financial statements 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 Company’s 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.
The Board of Directors are also responsible for overseeing the company’s financial reporting process.
Auditors’ Responsibility
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 standalone 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 management’s 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 Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s 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 auditor’s 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 standalone financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone
financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i)
planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of
any identified misstatements in the standalone financial statements.
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 standalone financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”) issued by the Central Government
in terms of Section 143 (11) of the Act, we give in Annexure “A” a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, based on our audit 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
appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement
of Changes in Equity and Statement of Cash flows 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 Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules
2015;
e) On the basis of the written representations received from the directors of the Company as on March 31,
2025 taken on record by the board of directors, none of the directors are disqualified as on March 31,
2025 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 “B” and
g) With respect to the other matters to be included in the Auditor’s Report in accordance with the
requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the
remuneration paid by the Company to its directors during the year is in accordance with the provisions
of section 197 of the Companies Act, 2013. The remuneration paid to any director is not in excess of the
limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other
details under Section 197(16) which are required to be commented upon by us.
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, as amended, in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone
financial statements - Refer Note No. 30 to the standalone financial statements.
ii. The Company does not have any long-term contracts including derivative contracts on which provision
for material foreseeable losses is required to be made under any law or accounting standards;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education
and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, other than
as disclosed in the notes to the accounts, where applicable, no funds (which are material either
individually or in the aggregate) have been advanced or loaned or invested (either from borrowed
funds or share premium or any other sources or kind of funds) by the Company to or in any other
person or entity, including foreign entity (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend
or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
The Management has represented, that, to the best of its knowledge and belief, other than as disclosed
in the notes to the accounts, where applicable, no funds (which are material either individually or
in the aggregate) have been received by the Company from any person or entity, including foreign
entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that
the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material
misstatement.
v. The Company has not proposed any dividend for the year nor for the previous year and hence reporting
on whether the provisions of section 123 of the Companies Act, 2013 have been complied with, for the
dividend proposed for the year or declared during the previous year and paid during the year is not
applicable.
vi. Based on our examination, which included test checks, the Company has used accounting software
for maintaining its books of account for the financial year ended March 31, 2025 which has a feature
of recording audit trail (edit log) facility and the same has operated throughout the year for all
relevant transactions recorded in the accounting software, except for standalone external software
used for human resource management which is non-editable at database level. The audit trail has
been preserved by the Company as per statutory requirements for record retention. Further, during
the course of our audit we did not come across any instance of audit trail feature being tampered
with.
For M/s Subbachar & Srinivasan
Chartered Accountants
Firm Registration No.004083S
(T.S.V.RAJAGOPAL)
Coimbatore Membership No. 200380
28th May, 2025 UDIN:25200380BMHYDI2346
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