To the Members of
Tilak Ventures Limited (Formerly Known as "Tilak Finance Limited")
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of TilakVentures Limited (Formerly Known as "Tilak Finance Limited") ("theCompany") which comprise the balance sheet as at 31st March 2019 the statement ofprofit and loss statement of changes in equity and the cash flow statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs (financial position) of the Company as at 31st March 2019 and profit (financialperformance including other comprehensive income) its cash flows and changes in equityfor 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended 31st March 2019. These matters were addressed in the context of our audit ofthe standalone Ind AS financial statements as a whole and in forming our opinion thereonand we do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.
|Key Audit matters ||How our audit addressed the key audit matter |
|(a) Impairment of financial assets (expected credit losses) || |
|Ind AS 109 requires the Company to recognise impairment loss allowance towards its financial assets (designated at amortised cost and fair value through other comprehensive income) using the expected credit loss (ECL) approach. Such ECL allowance is required to be measured considering the guiding principles of Ind AS 109 including: || We read and assessed the Company's Accounting policies for impairment of financial assets and their compliance with Ind AS 109. |
| || We evaluated the reasonableness of the Management estimates by understanding the process of ECL estimation. |
| unbiased probability weighted outcome under various scenarios; || Tested the ECL model including assumptions and underlying computation. |
| time value of money; || |
| impact arising from forward looking macro-economic factors and; || Assessed the floor/minimum rates of provisioning applied by the Company for loan products with inadequate historical defaults. |
| availability of reasonable and supportable information without undue costs. || Audited disclosures included in the Ind AS financial statements in respect of expected credit losses |
|Applying these principles involves significant estimation in various aspects such as: || |
| grouping of borrowers based on homogeneity by using appropriate statistical techniques; || |
| staging of loans and estimation of behavioral life; || |
| determining macro-economic factors impacting credit quality of receivables; || |
| estimation of losses for loan products with no/minimal historical defaults. || |
|Considering the significance of such allowance to the overall financial statements and the degree of estimation involved in computation of expected credit losses this area is considered as a key audit matter || |
Management's Responsibility for the Standalone 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance (including other comprehensive income) cashflows and changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of 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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the financial statementsmanagement is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives areto obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement whether due to fraud or error and to issue an auditor'sreport that includes our opinion. Reasonable assurance is a high level of assurance butis not a guarantee that an audit conducted in accordance with SAs will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial 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. 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 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 safeguards.
From the matters communicated with those charged with governance we are required todetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the Order to the extent applicable.
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 cash flow statement andstatement of change in equity dealt with by this Report are in agreement with the books ofaccount.
(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;
(e) on the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
(f) with respect to adequacy of internal financial control over financial reporting ofthe company and the operating effectiveness of such controls refer to our separate reportin "Annexure B" and
(g) with respect to other matters to be included in the Auditor's Report in accordancewith 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. The Company does not have any pending litigations which would impact its financialposition in the aforesaid standalone Ind AS financial statements.
ii. the Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. The company is not liable to transfer any amounts to the Investor Education andProtection Fund. Therefore there has been no delay in transferring amounts required tobe transferred to the Investor Education and Protection Fund by the Company.
For Pravin Chandak & Associates
Firm's registration number: 116627W
Membership number: 049391
21st May 2019
Annexure A to the Independent Auditors' Report- 31st March 2019
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31 March 2019 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a regular programme of physical verification of fixed assets. Nomaterial discrepancy was noticed during physical verification.
(c) The company does not have any immovable property hence the clause is notapplicable.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year. No material discrepancies were noticed on suchverification.
(a) The Company has granted loans to two party covered in the register maintained undersection 189 of the Companies Act 2013 (the Act') amount in involved is Rs.14100000/.
(b) In the case of the loans granted to any parties in the register maintained undersection 189 of the Act the borrowers have been regular in the payment of the interest asstipulated. The terms of arrangements do not stipulate any repayment schedule and theloans are repayable on demand. Accordingly paragraph 3(ii) (b) of the order is notapplicable to the Company in respect of repayment of the principal amount.
(c) There are no overdue amounts for period of more than ninety days in respect of theloans granted to the bodies corporate listed in the register maintained under section 189of the Act.
(iv) The company has complied with the provisions of section 185 & 186 of the Actexcept company has granted loans to 20 parties wherein interest charged is less thanprevailing yield government security for relevant tenure. Amount of such loans as on 31stMarch 2019 is Rs 41399156/- and company has granted loan to 29 party wherein nointerest has been charged. Amount of such loans as on 31st March 2019 is Rs.37575672/-.
(v) During the year Company has not accepted any deposits from the public hence theclause is not applicable.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees' state insurance and duty of excise
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales taxservice tax duty of customsvalue added tax were in arrears as at 31 March 2019 for a period of more than six monthsfrom the date they became payable. However company is subject to pay dues underProfessional Tax but no amount was deposited till the reporting date.
(viii) The Company did not have any outstanding dues to financial institutions banksor debenture holders during the year.
(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer during the year. The company has not taken any term loans during the year.
(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.
(xi) The company has paid managerial remuneration in accordance with provisions of thesection 197 read with Schedule V of the Companies Act.
(xii) The company is not a Nidhi Company hence the clause is not applicable.
(xiii) All the transactions with the related parties are in compliance with sections177 and 188 of Companies Act 2013 and the necessary details have been disclosed in theFinancial Statements etc as required by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year
(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him.
(xvi) As per provisions of section 45-IA of RBI Act 1934 a company is classified undervarious categories of Non-Banking Finance company if the company's financial assets aremore than 50% of the total assets of the company and Gross Income from Financialactivities constitute more than 50% of the gross income. Accordingly the company isrequired to get registered with provision of RBI as A NBFC company i.e .Finance Company.Though the company is engaged in Finance activity and its financial assets are more than50% of total assets but the income relating to finance activity constitutes less than 50%of gross total Income of the company in our opinion it satisfies only one test and as suchis not required to get registered under section 45-IA of the RBI Act1934. Thus we are ofthe opinion that NBFC provisions are not applicable in the current financial year.
For Pravin Chandak & Associates
Firm's registration number: 116627W
Membership number: 049391
21st May 2019
Annexure B to the Auditor's Report-31st March 2019
Report on the Internal Financial Controls under Clause (i) of sub- section 3 of theSection 143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of M/s TilakVentures Limited (Formerly Known as "Tilak Finance Ltd.")(the company) as of31st March 2019 in conjunction with our audit of the financial statements of the companyfor 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 Accountant of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 Not on Audit of Internal Financial Controls over Financial Reporting(the Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act2013 to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 judgment 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of 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 authorization of theManagement 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 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.
According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at March 312019.
a) The Company did not have an appropriate internal control system for granting Loans.Demand and other loans given are governed by the Board policies. Considering the closemonitoring of Board no appraisal renewal Policies Procedure Committee or documentshave been prescribed and executed.
b) The Company's internal control system is not commensurate to the size and scale ofoperation over purchase and sale of shares and inventoryand for expenses incurred.
A material weaknesses' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.
In our opinion except for the effects / possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria the Companyhas maintained in all material respects adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as of March 312019 based on the internal control over financialreporting criteria established by the company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Chartered Accountants of India.
We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 312019financial statements of the Company and the material weaknesses does not affect ouropinion on the financial statements of the Company.
FOR PRAVIN CHANDAK & ASSOCIATES
Firm's registration number: 116627W
Pravin Chandak Partner
Membership number: 049391