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Decillion Finance Ltd.

BSE: 539190 Sector: Financials
NSE: N.A. ISIN Code: INE848N01017
BSE 00:00 | 25 Oct Decillion Finance Ltd
NSE 05:30 | 01 Jan Decillion Finance Ltd
OPEN 11.55
PREVIOUS CLOSE 11.55
VOLUME 69
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P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 11.55
CLOSE 11.55
VOLUME 69
52-Week high 11.55
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Decillion Finance Ltd. (DECILLIONFIN) - Auditors Report

Company auditors report

TO

THE MEMBERS OF DECILLION FINANCE LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Decillion FinanceLimited ("the Company") which comprise the Balance Sheet as at 31 March 2019the Statement of Profit and Loss and the Statement of Cash Flows 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 our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at 31stMarch 2019 itsprofit and its cash flows for the year ended on that date.

Basis for Opinion

We have conducted our audit of the standalone financial statements in accordance withthe Standards on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our 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. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Description of Key Audit Matter

Purchases & Carrying value of the investments held as stock in trade (refer note no9 to the Standalone Financial Statements)

S.No. Key Audit Matter How the matter was addressed in our audit
1. The Company's investments in Shares & Securities (including preference shares) are classified based upon the business model of the Company. As per AS 13 "Accounting for investments" investments that are held for earning income by way of dividends and for capital appreciation or for other benefits including investments in subsidiaries are classified as non-current investments even though they may be readily marketable. Our audit procedures included:
In our audit approach we assessed the valuation methods used and discussed with management regarding the reasonableness of the basis and assumptions used. Our audit procedures included:
1) Understanding investment process with regard to purchase and valuation and evaluation of controls designed and implemented by the management and testing their operating effectiveness;
Shares and other securities held for sale in the ordinary course of business are classified as stock-in-trade. Accounting Standard 13 "Accounting for investments" are not investments as defined in this standard. However the manner in which they are accounted for and disclosed in the financial statements is quite similar to that applicable in respect of current investments. Accordingly the provisions of this standard to the extent that they relate to current investments are also applicable to shares & securities held as stock-in- trade with suitable modifications as specified in this standard. 2) Analyzing the possible indications of decline other than temporary and discussion with the management;
3) Evaluating the management assessment and opinions obtained by them as regards arriving at the cost of investment;
4) Performing relevant substantive testing to assess the cost of the investments made and carrying amount of the non-current investments on sample basis;
5) Testing for any decline other than temporary in the value of long-term investments. Indicators of decline in the value of an investment are obtained by reference to its market value the investee's assets and results and the expected cash flows from the investments; and
The carrying amount for current investments (held as stock-in trade) is valued individually at lower of cost and fair value and presented under the head "Current Assets". 6) In case of investments held as stock-in-trade (for sale in the ordinary course of business) performing relevant substantive testing to assess the valuation of the carrying amount as at the balance sheet date;
The Company has devalued its investments held as stock-in-trade by Rs.1172567/- and charged to Profit and Loss statement as at 31 stMarch 2019. 7) The carrying amount for current investments held as stock-in-trade is the lower of cost and fair value. In respect of investments for which active market exists market value generally provides the best evidence of fair value. The valuation of such investments at lower of cost or fair value provides a prudent method of determining the carrying amount to be stated in the Balance Sheet. Valuation of investments held as stock in trade on overall (on global basis) is not considered appropriate.
Considering the materiality of the amount involved this matter has been identified as Key Audit Matter. However the more prudent and appropriate method is to carry investments individually at the lower of cost and fair value.
8) For current investments held as stock in trade any reduction to fair value and any reversals of such reductions are included in profit and loss statement.
Investments made in Limited Liability Partnerships (refer note no 8 to the Standalone Financial Statements)
2. The Company as on March 31st 2018 had investments in two subsidiaries namely 1) Littlestar Tracom Ltd and 2) Maruti Tie-up Ltd. Our audit procedures included:
Both the above subsidiaries got converted into LLPs on May 31 2018 and the Company continued to hold investments as subsidiaries in these two LLPs (i.e. Littlestar Tracom LLP and Maruti Tie-up LLP as on March 31 2019. The Companies investment in these two subsidiaries amount to Rs 12626250 representing 10.97% of the Company's total assets. 1) Performing analysis of the Notifications issued by the RBI on June 11 2013 where NBFCs were advised vide CC No. 214/03.02.002/2010-11 dated March 302011 that they are prohibited from contributing capital to any partnership firm or to be partners in partnership firms including LLPs. Further as per RBI in cases of existing partnerships NBFCs were advised to seek early retirement from the partnership firms including LLPs Further RBI amended Notifications Nos. DNBS (PD).255/CGM (CRS)-2013 and DNBS (PD).256/CGM (CRS)-2013 both dated June 11 2013 in this regard.
Further NBFCs were advised vide CC No. 214/03.02.002/2010-11dated March 30 2011 that they are prohibited from contributing capital to any partnership firm or to be partners in partnership firms which includes Limited Liability Partnerships (LLPs). In case of existing partnerships NBFCs were advised to seek early retirement from the said partnership firms/LLPs Accordingly this matter has been identified as Key Audit Matter. 2) Inspecting Board minutes and other appropriate documentation of authorization to assess whether the transactions were appropriately authorized.
3) Communicating with the Board of Directors and those charged with Governance in order to understand the time period upto which the Company shall comply with the RBI directives in this regard. Further the meeting of the board of directors of the Company was held on 29thMay 2019 to call an Extra-Ordinary General Meeting of the members of the Company on 16th July 2019 to take approval from members for the disposal of the investments made in LLPs to comply with the RBI directives in this regard.
Statutory and Legal Matters
3. The Company received a notice from BSE dated August 10 2017 regarding issue related to suspected shell companies and appointment of forensic auditor thereon. BSE requested to submit various documents from time to time in this regard along with the queries and other information from the Company. The Company replied to all the queries issued by the BSE and the matter is subjudice as on 31st March 2019. Our audit procedures included:
1) We have checked up the order of the BSE issued pursuant to the SEBI's aforesaid directions and other relevant correspondence with the BSE and with the forensic auditors appointed by the BSE in this regard since inception.
2) We have also checked all the relevant legal petitions applications affidavits rejoinders inter-locutory applications as filed by the Company with Hon'ble High Court at Kolkata.
3) We communicated with the Management and those charged with Governance with respect to this matter and the Company is regular in replying to all the queries raised and all the documents sought by the Exchange (BSE) and by the forensic auditors.
The forensic audit is in process and the matter is subjudice at present.

Information Other than the 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 in the Company's annual report but doesnot include the standalone financial statements and our auditor's report thereon. Ouropinion on the standalone financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the 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 StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Companies (Accounting Standard) Rules 2014 and the Companies(Accounting Standard) Amendment Rules 2016.This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements Management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

That Board of Directors are also responsible for overseeing the Company's financialreporting 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 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 proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial control system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto 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 representthe underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually origin aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in

I. planning the scope of our audit work and in evaluating the results of our work; andII. to evaluate the effect of any identified misstatements in the financial statements.

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 charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 ("the Order")issued by the Central Government in terms of Section143(11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraph 3 and 4 of theorder to the extent applicable.

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 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 Statement of Cash Flowdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies(Accounting Standards) Amendment Rules 2016.

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 with reference tofinancials statements of the Company and the operating effectiveness of such controlsrefer to our separate 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 best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations as at March 31 2019 onits financial position in its standalone financial statements (Refer note 20 (f) to thestandalone financial statements).

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

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

3) With respect to the matter to be included in the Auditor's Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 read with Schedule V to the Act.

Place: Kolkata For and on behalf of
Date: 29th May 2019 C.K. CHANDAK& CO
Chartered Accountants
Firm Registration Number: 326844E
CA Chandra Kumar Chandak
Proprietor
Membership Number: 054297

Annexure –"A" to the Independent Auditor's Report

[Referred to in Paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the Members of DecillionFinance Limited on the standalone financial statements for the year ended 31stMarch 2019].

i. In respect of the Company's Fixed Assets:

( A) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

( B) Fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies were identified on such verification.

(C) There were no immovable properties held in the name of the Company.

ii. The inventory comprises of securities held as stock-in trade and are verified bythe management with the confirmation statements received from the depository on a regularbasis. In our opinion the frequency of such verification is reasonable. The Company ismaintaining proper records of securities held as stock-in trade and no discrepancies werenoticed on comparing the statement from custodian with books of account.

iii. According to the information and explanations given to us the Company has grantedunsecured loans repayable on demand to companies and other parties covered in the registermaintained under section 189 of the Companies Act 2013.

( A) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that the terms and conditions of theaforesaid loans granted by the Company are not prejudicial to the interest of the Company.The Schedule of repayment of principal and payment of interest has been stipulated for theloans granted and the repayment is regular.

( B) The aforesaid loans are repayable on demand accordingly provision of Clause3(iii) (b) and (c) of the Order are not applicable to the Company. iv. Based oninformation and explanations given to us in respect of loans and investments the Companyhas complied with the provisions of Section 185 and 186 of the Companies Act asapplicable.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from public within the meaning of sections 73 to 76or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder. Hence Clause (v) of the Order is not applicable.

vi. The Central Government has not prescribed the maintenance of cost records for anyof the products or services of the Company under Sub-section (1) of Section 148 of the Actand rules framed there under. Hence Clause (vi) of the Order is not applicable.

vii. (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including Income tax Goods & Service tax Value added taxcess and any other material statutory dues applicable to it and the extent of the arrearsof outstanding dues as on the last day of the financial year concerned were not for aperiod of more than six months from the date they became payable.

(b) However according to information and explanation given to us the following dues ofIncome tax have not been deposited by the Company on account of disputes.

Name of Statute Nature of dues Amount under dispute Period to which the amount relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax and Interest Rs. 1307970/- A.Y. 2014-15 Cit (Appeals)

The Company has filed appeal before CIT (Appeals) on January 13 2017.

viii. The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause 3(viii) of the Order is not applicable to the Company.

ix. In our opinion and according to the information and explanations given to us theCompany has not raised moneys by way of initial public offer or further public offer(including debt instruments) or term loans and hence reporting under clause 3 (ix) of theOrder is not applicable to the Company.

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations give us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.Hence reporting under Clause (xiv) of this Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected with them as referred to in Section 192 of the Act.

xvi. According to the information and explanations given to us the Company is a Nondeposit taking Systematically not important Non-Banking Financial Company and is dulyregistered under Section 45-IA of the Reserve Bank of India Act 1934.

Place: Kolkata For and on behalf of
Date: 29th May 2019 C.K. CHANDAK& CO
Chartered Accountants
Firm Registration Number: 326844E
CA Chandra Kumar Chandak
Proprietor
Membership Number: 054297

Annexure –"B" to the Independent Auditors' Report

[Referred to in Paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the Members of DecillionFinance Limited on the standalone financial statements for the year ended 31stMarch 2019].

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the "Act")

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of DECILLION FINANCE LIMITED ("the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date. In our opinion the Company has in all material respects anadequate internal financial controls with reference to standalone financial statements andsuch internal financial controls were operating effectively as at March 31 2019 based onthe internal control with reference to standalone financial statements 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 (the ‘Guidance Note').

Management's Responsibility for Internal Financial Controls

The Company's Management and the Board of Directors of the Company are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential component of stated in the Guidance Note issued by the Instituteof Chartered Accountants of India. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls withreference to standalone financial statements based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls withreference to financial statements. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to standalonefinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effective internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud 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 withreference to standalone financial statement.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control with reference to standalone financial statementis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol with reference to standalone financial statement includes those policies andprocedures that:-

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) 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

(iii) 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 with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Place: Kolkata For and on behalf of
Date: 29th May 2019 C.K. CHANDAK& CO
Chartered Accountants
Firm Registration Number: 326844E
CA Chandra Kumar Chandak
Proprietor
Membership Number: 054297