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Latent Light Finance Ltd.

BSE: 539909 Sector: Financials
NSE: N.A. ISIN Code: INE515K01018
BSE 05:30 | 01 Jan Latent Light Finance Ltd
NSE 05:30 | 01 Jan Latent Light Finance Ltd

Latent Light Finance Ltd. (LATENTLIGHT) - Auditors Report

Company auditors report

To The Members Of Latent Light Finance Limited (formerly known as Galaxy CommercialLimited)

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Latent Light FinanceLimited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information. In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid financialstatements give the information required by the Companies Act 2013 (‘the Act') inthe manner so required and give a true and fair view in conformity with the AccountingStandards prescribed under section 133 of the Act read with the Companies (AccountingStandard)Rules 2006 as amended ("Accounting standard") and other accountingprinciples generally accepted in India of the state of affairs of the company as at 31stMarch 2019 and its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provision of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for opinion.

Key Audit Matters

Key Audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit matter Auditors' Response
1. Identification of Non-Performing assets (loans) in accordance with Reserve Bank of India(" the RBI")guidelines Our audit approach includes testing the design operating effectiveness of internal controls and substantive audit procedures in respect of asset classification pertaining to loans and advances.
The company has given loans and advances amounting Rs.118189814/- as at 31st March 2019. Identification of non- performing(loans and advances) in accordance with relevant Prudential Regulation issued by the RBI in respect of asset classification pertaining to loans and advances(herein after referred as "Relevant RBI Guidelines") is a key audit matter due to the current processes at the company which requires manual interventions management estimates and judgement and level of regulatory and other stakeholder focus. In particular:
We have evaluated the company internal control system in adhering to the relevant RBI guidelines regarding assets assets classification pertaining to loans and advances.
We have identified and tested the design and implementation as well as operational effectiveness of key control pertaining to monthly monitoring of overdue positions by business and finance team.
Accordingly our audit was focused on asset classification pertaining to advances due to materiality of the balances. We have test checked loans and advances to examine the validity of the recorded amount loan documentations examined the manual statements of accounts indicators of impairment and compliance with asset classification pertaining to loans and advances
Evaluated the management judgment process and review controls over asset classification and discussed the asset classification with senior management including the Chief Executive Officer and Chief Financial Officer.

Information other than the Financial Statements and Auditors' Report thereon

The Company's Board of Directors is responsible for the preparation of otherinformation which comprises the Director's Report including annexures to Director'sReport

Management Discussion and Analysis Report and Report on Corporate Governance but doesnot include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information andaccordingly we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with financial statements or our knowledge obtained during the course ofaudit or otherwise appears to be materially misstated. Based on the work we haveperformed if we conclude that there is a material misstatement of this other information;we are required to report the fact. We have nothing to report in this regard.

Responsibility of Management for Financial 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

That Board of Directors is also responsible for overseeing the company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentation 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 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charge with governance we determine thosematters that were of most significance in the audit of financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public benefits of such communication.

Report on other legal and regulatory requirements

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 Companies Act 2013 we give in the "Annexure (A)" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

As required by Section 143 (3) of the Act we report to the extent applicable 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 the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 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 termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure (B)".

g) With respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of section 197(16) of the Act as amended

In our opinion and to the best of our information and accordingly to the explanationsgiven to us no remuneration has been paid by the company to its directors during theyear.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with

Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i. There is no pending litigation which would have its impact on financial statement ofthe Company.

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

iii. There are no amounts required to be transferred to the Investor Education andProtection Fund by the Company.

For Divyank Khullar & Associates

Chartered Accountants

ICAI Firm Registration No. : 025755N

Sd/-

Divyank Khullar

Partner

Membership No. : 528399

Place: New Delhi

Date: 30th May 2019

ANNEXURE (A) TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF LATENT LIGHT FINANCE LIMITED (formerly known as Galaxy Commercial Limited)

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31 March 2019 we report that:

(i) (a) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets (property plant and equipment).

(b) According to the information and explanations given to us the Company has aregular programme of physical verification of its property plant and equipment by whichall fixed assets (property plant and equipment) are verified at periodic intervals. Inour opinion the period of verification is reasonable having regard to the size of theCompany and the nature of its assets. No material discrepancies were noticed duringphysical verification of fixed assets (property plant and equipment).

(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.

(ii) According to the information and explanations given to us the management hasconducted physically verification in respect of finished goods at reasonable intervals. Nomaterial discrepancies were noticed during physical verification of inventories ascompared to book records.

(iii) In our opinion and according to the information and explanations provided to usthe Company has granted loans to a Company covered in the register maintained undersection 189 of the Companies Act 2013 (‘the Act').

(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the parties listed in the register maintained under section 189of the Act were not prima facie prejudicial to the interest of the Company.

(b) The terms of arrangement do not stipulate any repayment schedule and the loans arerepayable on demand with interest.

(c) There is no overdue amount in respect of the loans granted to a Company listed inthe register mintained under section 189 of the Act;

(iv) In our opinion and according to the information and explanations provided to usthe Company did not make any investment as per provisions of section 186(1) of the Act.Further the Company is exempted from compliance of section 185 and 186 (exceptsub-section "1" of Section 186) of the Act.

(v) According to the information and explanations provided to us the Company has notaccepted any deposits from the public. Accordingly the directives issued by Reserve Bankof India and the provisions of section 73 to 76 or any other relevant provisions of theAct and rules framed thereunder in this regard are not applicable.

(vi) According to the information and explanations provided to us the CentralGovernment has not specified for maintenance of cost records under section 148(1) of theCompanies Act 2013 in respect of the activities carried on by the Company. Hence theprovisions of paragraph 3(vi) of the Order is not applicable to the Company.

(vii) In respect of statutory dues;

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company is regular in depositing withappropriate authorities undisputed statutory dues including provident fund investoreducation and protection fund employees' state insurance income-tax sales tax servicetax custom duty excise duty value added tax goods and service tax and other materialstatutory dues as applicable.

Further there are no undisputed amounts payable outstanding as at 31 March 2019 for aperiod of more than six months from the date they become payable.

(b) According to the information and explanations given to us there are no materialstatutory dues which have not been deposited with the appropriate authorities on accountof any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not raised loan or borrowings from banks financial institutions andGovernment or debenture holders during the year under audit and therefore paragraph3(viii) of the Order is not applicable.

(ix) According to the information and explanations provided to us the company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) and not availed the facility of term loans during the year under audit andtherefore paragraph 3(ix) of the Order is not applicable.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no fraud on or by the companyor any fraud by its officers or employees was noticed or reported during the year.

(xi) To the best of our knowledge and according to the information and explanationsgiven to us no managerial remuneration has been paid or provided during the year underaudit. Accordingly paragraph 3(xi) of the Order is not applicable on the Company.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(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 suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations given 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 under audit.

(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 him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) To the best of our knowledge and according to the information and explanationsgiven to us the company has registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For Divyank Khullar & Associates

Chartered Accountants

ICAI Firm Registration No. : 025755N

Divyank Khullar

Partner

Membership No. : 528399

Place: New Delhi

Date: 30th May 2019

ANNEXURE- (B) TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF LATENT LIGHT FINANCE LIMITED (formerly known as Galaxy Commercial Limited)

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 internal financial controls over financial reporting of LatentLight Finance Limited ("the Company") as of March 31 2019 in conjunctionwith our audit of the financial 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

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 on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For Divyank Khullar &Associates

Chartered Accountants

ICAI Firm Registration No. : 025755N

SD/-

Divyank Khullar & Associates

Partner

Membership No. : 528399

Place: New Delhi Date: 30th May 2019

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