The Members of Ladderup Finance Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Ladderup FinanceLimited ("the Company") which comprise the balance sheet as at 31stMarch 2019 and the statement of Profit and Loss and Cash flows statements for the yearthen ended including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as the " Standalone 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 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 st March 2019 the profit and itscash 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 (SAs). Our responsibilities under those Standards arefurther described 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 (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and Ethics. We believe that the audit evidence we have obtained is sufficientbasis for our audit opinion.
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.
|Key audit matters ||How our audit addressed the key audit matter |
|Investment in Subsidiary ||Our procedures in relation to verification of investment made in subsidiary include: |
|Company have acquired equity Shares and optionally convertible preference shares of Godland Enterprises Private Limited. ||Evaluating the independent professional valuer's competence capabilities and objectivity; |
|Godland Enterprises Pvt. Ltd. holds 100% Equity Shares of M/s. Waterproof Corporation Private Limited. ||Assessing the valuation methodology used by the independent professional valuer to estimate the fair value of the investment. |
|Whether the proper compliance was made with regards to Accounting Standard & Valuation of investment. ||Recording of investment made in the books and compliance with accounting standard. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included not include the standalone financialstatements and our auditor's report thereon. The Board's Report including Annexures toBoard's Report is expected to be made available to us after the date of this auditor'sreport. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements:
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so. Those Board of Directorsare also responsible for overseeing the Company's financial reporting 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial As part of an audit in accordance withSAs we exercise professional judgment and maintain professional skepticismthroughout theaudit. 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 control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the standalone financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit. We also provide thosecharged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards. From the matters communicated with those charged withgovernance we determine those matters that were of most significance in the audit of thefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A' a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section143 (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 Balance Sheet Statement of Profit this Report are in agreement with the booksof account;
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
(e) On the basisofthewrittenrepresentations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act;
(f) With respect to the adequacy of the Internal financial controls over financialreporting the Company and operative effectiveness of such controls refer to our separatereport in "Annexure B". Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting
(g) With respect to the other matters to be included in the Auditor's report inaccordance with the requirements of the sub-section In our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by theCompany to its directors during the year is in accordance with the provisions of Section197 of the Act.
(h) 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 as amended inour opinion and to the best of our information and according to the explanations given to
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;
ii. The Company did not have any long-term contracts including derivative contracts asat 31st March 2019 for which there were any material foreseeable losses; and
iii. There has been delay in transferring amounts of Rs. 201471/- required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31st March 2019. The amount has been transferred on 22nd May 2019.
For SHAH GUPTA & CO.
Firm Registration No.: 109574W
Membership No. 135823
Date: 23rd May 2019
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' section of our report of even date to the financial statements ofthe Company for the year ended 31st March 2019:
i. a) The Company has maintained proper records showing full particulars includingquantitative details and situations of fixed assets.
b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. In accordance with this programme certainfixed assets were during the year by the Management. According to the information andexplanations given to us no material discrepancies were noticed on such
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 areheld in the name of the Company as at the balance sheet date.
ii. Since the Company does not have inventory the Clause 3(ii) of the Order is notapplicable to the Company.
iii. According to the information and explanations given by the Management the companyhas granted unsecured loans to companies covered in the register maintained under section189 of the Companies Act 2013.
a) In our opinion the rate of interest and the other terms and conditions of the grantof such loans were not prima facie prejudicial to the company's interest;
b) The borrowers have been regular in the payment of the interest as stipulated. Theterms of arrangements do not stipulate any repayment schedule and the loans are repayableon demand. Accordingly paragraph 3(iii)(b) of the Order is not applicable to the Companyin respect of repayment of the principal amount;
c) There are no overdue amounts in respect of such loans.
iv. Based on information and explanation given to us the Company has complied withprovisions of Section 185 and 186 of the Act in respect of grant of loans makinginvestments and providing guarantees and securities the Company has not accepted anydeposit
v. Accordingtothe from the public with the meaning of the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed there under. Accordingly clause 3(v) of theorder is not applicable to the company.
vi. To the best of our knowledge and as explained the Central Government has notprescribed maintenance of cost records under sub-section (1) of Section 148 of the notapplicable to the Company. vii. According to the information and explanations given to usin respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding provident fund Income-Tax Cess Goods and Service Tax and other materialstatutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amount payable in respect of provident fund Income-TaxCess Goods and Service Tax and other material statutory dues in arrears as at 31st March2019 for a period of more than six months from the date they became payable.
(c) According to the records of the Company there are no dues of provident fundIncome-Tax Cess Goods and Service Tax and other material statutory dues which have notbeen deposited on account of any disputes other than as follows:
|Name of the status ||Nature of Dues ||Amount (Rs. In Lakh) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Tax ||154860 ||A.Y. 2012-2013 ||CIT (Appeals) |
|Income Tax Act 1961 ||Tax ||302050 ||A.Y. 2013-2014 ||CIT (Appeals) |
|Income Tax Act 1961 ||Tax ||1257380 ||A.Y. 2015-2016 ||CIT (Appeals) |
viii. According to the information and explanations given year in repayment of dues toits bankers non-banking financial company and government. The Company did not have anyoutstanding debenture during the year.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyclause 3 (ix) of the Order is not applicable to the Company.
x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employee has been noticed or reported duringthe year.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii. According to the information and explanations given to us the Company is not aNidhi Company. Accordingly the provision of clause 3 (xii) of the Order is not applicableto the Company.
xiii. According to the 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 and details of suchtransactionshave been disclosed in the standalone financial statements as required by theapplicable 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. Accordingly clause 3(xiv) of the Order is not applicable to the Company.
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 them and hence provisions of section192 of the Act are not applicable. Accordingly clause 3(xv) of the Order is notapplicable to the Company. xvi. According to the information and explanations given to usand based on our examination of the records of the Company the Company is registeredunder Section 45-IA of the Reserve Bank of India Act 1934.
For SHAH GUPTA & CO.
Firm Registration No.: 109574W
Membership No. 135823
Date: 23rd May 2019
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
Report on the internal financial controls under clause (i) of sub-section 3 of section143 of the Companies Act 2013 ("the Act") We have audited the internalfinancial controls over financial reporting of Ladderup Finance Limited ("theCompany") as of 31st March 2019 in conjunction with our audit of the Standalonefinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancialcontrols based on the internal control over financialreportingcriteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (The "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 ("theAct").
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositionsof the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal controls over financial reporting to futureperiods are subject to the risk that the internal financial control overfinancialreporting may become inadequate because of changesinconditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion to the best our information and according to the explanation given tous the Company has in all material respects an adequate internal financial controlssystem over financial reporting such internal financial controls over financial reportingwere operating effectively as at 31st March 2019 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For SHAH GUPTA & CO.
Firm Registration No.: 109574W
Membership No. 135823
Date: 23rd May 2019