Lerthai Finance Limited (Formerly known as Marathwada Refractories Limited)
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Lerthai Finance Limited(Formerly known as Marathwada Refractories Limited) (the Company) whichcomprise the Balance Sheet as at 31st March 2020 and the Statement of Profit and Loss(Including Other Comprehensive Income) the Cash Flow Statement and the statement ofchanges in Equity for the year then ended and a summary of the significant accountingpolicies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs of the Company as at 31st March 2020 and its loss its cash flows and the changesin equity 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 provisions 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 our opinion.
Emphasis of Matter
We draw attention to the following matters in the accompanying Ind AS financialstatements for the year ended March 31 2020:
a. Footnote to Note 4 relating to fair valuation of certain investments accounted foron the basis of valuation report obtained as on Dec 19 2019 as the Management is of theview based on the representation from Investee entity that there has been no substantialchange in the fair value of the investments till the year ended March 31 2020.
Our Opinion is not Modified in respect of these matters.
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 current year. These matters wereaddressed in the context of our audit of the Ind AS Financial Statements as a whole andin forming our opinion thereon and we do not provide a separate opinion on these matters.
a. Business Operations:
The Company is in the process of formulating clear plans about the business withrespect to Investments in Indian Real estate market and technology startups. The Companyis in the plan of setting up its' own Alternative Investment Fund to implement the same.
Currently due to the COVID-19 pandemic the company is closely looking at the marketwith a view to capture the viable assets and deploy the capital. In addition to the abovethe company is optimistic in its plans of identifying and investing in the distress assetsafter raising the funds from the foreign investors with whom the company is closely intalks with.
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially 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 FinancialStatements
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 changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so. Those Board of Directors are also responsiblefor overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the 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 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 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 todesign 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 whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements
including the disclosures and whether the financial statements represent theunderlying transactions 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 safeguard.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report] Order 2016 (the Order]as amended issued by the
Central Government of India in terms of sub-section 11 of section 143 of the Act wegive in the
"Annexure A" a statement on the matters specified in paragraphs 3 and4 of the Order.
2. As required by Section 143 (3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 the statement of changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) rules 2015 as amended.
e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The company does not have any pending litigations which would impact the financialposition of the company as on 31st March 2020.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Guru & Jana
Firm Registration No: 006826S
Membership No: 222625
Date: 23 June 2020
Annexure A to Auditor's Report
The annexure referred to in our report to the members of Lerthai Finance Limited (Formerlyknown as Marathwada Refractories Limited) for the year ended on 31st March2020. We report that:
(i) According to the information and explanations given to us the company does nothold fixed assets and immovable properties at the end of the year. Hence the provisions ofClause 3 (i) (a) to (c) of the Order are not applicable.
(ii) According to the information and explanations given by the management the companydoes not have any inventory. Accordingly provisions of Clause 3 (ii) of the order is notapplicable.
(iii) According to the information and explanation given by the management the Companyhas not granted any loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties covered in the Register maintained under section 189 of theAct. Accordingly the provisions of Clauses 3 (iii) of the Order are not applicable to theCompany.
(iv) According to the information and explanation given by the management the companyhas not given loans/guarantees to which the provisions of Sec.186 of the act apply.However regarding the investments to which the provisions of Sec.186 apply the companyhas complied with the respective provisions of the act.
(v) The Company has not accepted any deposits from the public. Accordingly theprovisions of Clauses 3 (v) of the Order are not applicable to the Company.
(vi) As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31 2020 for a period of more than six monthsfrom the date on when they become payable.
b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.
(viii) According to the information and explanation given by the management theCompany has not borrowed any amount from any financial institutions banks or debentureholders during the year. Accordingly provisions of clause (viii) are not applicable.
(ix) According to the information and explanations given by the management the companyhas not raised moneys by way of initial public offer or further public offer includingdebt instruments and term Loans. Accordingly the provisions of Clause 3 (ix) of the Orderare not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given by the management the companyhas not paid or provided for any managerial remuneration during the year. Hence theprovisions of Clause 3 (xi) of the Order is not applicable.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.
(xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given by the management thecompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. Accordingly the provisions ofclause 3 (xiv) of the Order are not applicable to the Company and hence not commentedupon.
(xv) According to the information and explanations given by the management the companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly the provisions of clause 3 (xv) of the Order are not applicable to theCompany and hence not commented upon.
(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.
For Guru & Jana
Firm Registration No: 006826S
Membership No: 222625
Date: 23 June 2020
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF LERTHAI FINANCE LIMITED (Formerly known as Marathwada RefractoriesLimited)
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 LerthaiFinance Limited (Formerly known as Marathwada Refractories Limited) as of March 312020 in conjunction with our audit of the financial statements of the Company for the yearended 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 internal financial controls system overfinancial 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.
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 31 March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the financial statements of Company which comprise the Balance Sheet as at March 312020 and the related Statement of Profit and Loss and Cash Flow Statement for the yearthen ended and Statement of Changes in Equity and a summary of significant accountingpolicies and other explanatory information and our report even dated expressed anunqualified opinion thereon.
For Guru & Jana
Firm Registration No: 006826S
Membership No: 222625
Date: 23 June 2020