To The Members of Venlon Enterprises Limited
Report on the Financial Statements
I have audited the accompanying financial statements of Venlon Enterprises Limited("the Company") which comprise the Balance Sheet as at March 31 2018 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Cash Flows for the year then ended and a summary of thesignificant accounting policies and other explanatory information.
Management's Responsibility for the 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 preparationand presentation of financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
My responsibility is to express an opinion on these financial statements based on myaudit. In conducting my audit I have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.
I conducted my audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that I comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
I believe that the audit evidence obtained by me is sufficient and appropriate toprovide a basis for my audit opinion on the standalone financial statements.
In my opinion and to the best of my information and according to the explanations givento me the aforesaid financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 and its loss total comprehensive income the changes in equity and its cashflows for the year ended on that date.
Emphasis of Matters
a) I draw attention to the matter disclosed in Note 28 (xxvii) other additional notes/information to the financial statements:
b) The financial statements indicate that the Company has accumulated losses and itsnet worth has been fully eroded. The company has incurred cash loss during the currentyear and previous year and the company's current liabilities exceeded its current assetsas at the balance sheet date. The financial statements of the company have been preparedon a going concern basis for the reasons stated in Note 28 (xxvii) other additional notes/information to the financial statements.
My opinion is not modified in respect of this matter.
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 Section 143(11) of the Act I give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
2. As required by Section 143(3) of the Act based on my audit I report that:
a) I have sought and obtained all the information and explanations which to the best ofmy knowledge and belief were necessary for the purposes of my audit.
b) In my opinion proper books of account as required by law have been kept by theCompany so far as it appears from my examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Cash Flow dealt with by this Report are inagreement with the books of account.
d) In my opinion the aforesaid financial statements comply with the Indian AccountingStandards prescribed under section 133 of the Act
e) On the basis of the written representations received from the directors of theCompany as on March 31 2018 taken on record by the Board of Directors none of thedirectors are disqualified as on March 31 2018 from being appointed as a director interms of 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 myseparate Report in "Annexure B". and
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 as amended inmy opinion and to the best of my information and according to the explanations given tome:
i. The Company does not have any pending litigations which would impact its financialposition. ii. The Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
B S PUNEETH Chartered Accountant Membership #233893
Place: Mysuru Date: 30th May 2018
Annexure A to the Independent Auditors' Report
The Annexure referred to in paragraph 1 under the heading "Report on Other Legaland Regulatory Requirements" of my Independent Auditors' Report of even date to themembers of Venlon Enterprises Limited on the financial statements for the year ended 31March 2018
I Report that:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the management according to a phasedprogram designed to cover all the items over a period of three years which in my opinionis reasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.
(c) As per the information and explanation given to me and on the basis of myexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii. The inventory has been physically verified by the management at reasonableintervals. The discrepancies noticed on physical verification of inventory were notmaterial and the same have been properly dealt with in the books of account. iii. a) TheCompany has not granted unsecured loans to Companies covered in the register maintainedunder Section 189 of the Companies Act 2013 (the Act').
b) Accordingly paragraph 3(iii)(b) and 3(iii)(c) of the Order are not applicable tothe Company.
iv. According to the information and explanations given to me the Company has notgiven any loans investments guarantees and security during the year. Accordinglyparagraph 3(iv) of the order is not applicable.
v. The Company has not accepted any deposits from the public within the meaning of
Section 73 to 76 or any other Relevant Provisions of the Act and the rules framedthere under. No order has been passed by National Company Law Tribunal or Reserve Bank ofIndia or any Court or any other Tribunal.
vi. I have broadly reviewed the books of account maintained by the Company in respectof products where pursuance to the Rules made by the Central Government the maintenanceof cost records has been prescribed under section 148(1) of the Act and the prescribedaccounts and records have been made and maintained in respect of the products manufacturedby the Company. I have not however made a detailed examination of the records with aview to determine whether they are accurate or complete.
vii. a) According to the information and explanations given to me and the records ofthe Company examined by us no undisputed statutory dues including provident fundemployees' state insurance sales tax service tax Goods and Service Tax customs dutyvalue added tax excise duty cess and other statutory dues as applicable with theappropriate authorities.
b) According to the information and explanations given to me there are no dues ofProvident Fund Income tax Sales tax Service tax Goods and Service Tax Custom dutyValue added tax Excise duty and Cess and other statutory dues which have not beendeposited on account of any dispute
Viii. According to the records of the Company examined by me and the information andexplanations given to me the Company has not defaulted in repayment of dues to anyfinancial institution or bank as at the balance sheet date. The Company has not issued anydebentures.
ix. According to the information and explanations given to me and the records of the
Company examined by me the Company has not raised money by public offer (includingdebt instruments) during the year. The term loans were applied for the purpose for whichthose were raised.
x. During the course of my examination of the books and records of the company carriedout in accordance with the generally accepted auditing practices in India and accordingto the information and explanations given to me I have neither come across any instanceof material fraud on the company by its officers or employees or by the company noticedor reported during the year nor have we been informed of any such case by the management.
xi. According to the information and explanations given to me and the records of the
Company examined by me the managerial remuneration has been paid in accordance withthe requisite approvals mandated by the provisions of section 197 to be read with scheduleV to the Act.
xii. According to the information and explanations given to me The Company has notbeen incorporated as a "Nidhi Company". Accordingly paragraph 3(xii) of theOrder is not applicable.
xiii. As per the information and explanation given to me and the records examined byme all related party transactions are in compliance with sections 177 and 188 of the Actwhere applicable and the details of such transactions have been disclosed in the FinancialStatements as required by the applicable accounting standards.
xiv. As per the information and explanation given to me and the records examined by methe Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year under review. Accordingly paragraph3(xiv) of the Order is not applicable. xv. According to the information and explanationsgiven to me the Company has not entered into any non-cash transactions with directors orpersons connected with him/her. Accordingly paragraph 3(xv) of the Order is notapplicable.
xvi. The company is not engaged in the business of non-banking financial institution
(NBFI) and hence is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
B S PUNEETH Chartered Accountant Membership #233893
Place: Mysuru Date: 30th May 2018
Annexure B to the Independent Auditors' Report
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")
I have audited the internal financial controls over financial reporting of VenlonEnterprises Limited ("the Company") as of 31st March 2018 inconjunction with my audit of the financial statements of the Company for the year ended onthat 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 (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 the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
My responsibility is to express an opinion on the Company's internal financial controlsover financial reporting based on our audit. I have conducted my audit in accordance withthe Guidance Note on audit of Internal Financial Controls over Financial Reporting (theGuidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit 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 I 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
My audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. My 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.
I believe that the audit evidence I have obtained is sufficient and appropriate toprovide a basis for my 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. The 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.
In my opinion Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2018 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
B S PUNEETH Chartered Accountant Membership #233893
Date: 30th May 2018