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Tilaknagar Industries Ltd.

BSE: 507205 | NSE: TI |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE133E01013 | SECTOR: Breweries & Distilleries

BSE Live

Mar 30, 16:00
15.40 0.00 (0.00%)
Volume
AVERAGE VOLUME
5-Day
12,333
10-Day
13,096
30-Day
12,533
6,334
  • Prev. Close

    15.40

  • Open Price

    15.90

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Mar 30, 15:44
15.40 0.10 (0.65%)
Volume
AVERAGE VOLUME
5-Day
75,840
10-Day
105,101
30-Day
77,761
39,789
  • Prev. Close

    15.30

  • Open Price

    14.55

  • Bid Price (Qty.)

    15.40 (55)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Tilaknagar Industries Ltd. (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS Financial Statements”).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, consolidated statement of profit and loss including other comprehensive income, statement of changes in equity and statement of cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (“Ind AS”) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis for Qualified Opinion

1 The management has not impaired one of the ENA plants as required by Indian Accounting Standard (Ind AS 36) Impairment of Assets, though there is an indication of impairment. Reference is invited to Note 45 of the standalone Ind AS financial statements.

2 The Company has not made impairment of advances given to certain parties amounting to Rs. 6,074.08 Lacs, as required by Indian Accounting Standard (Ind AS 109) Financial Instruments. Reference is invited to Note 46 of the standalone Ind AS financial statements.

3 The Company has not impaired for Equity Investment of Rs. 1,543.35 Lacs in its wholly owned subsidiary Prag Distillery (P) Ltd. as required by Indian Accounting Standard (Ind AS 36) ‘Impairment of Assets’ though the Subsidiary has been referred to National Company Law Tribunal for Corporate Insolvency Resolution Process (CIRP) under the provisions of Insolvency and Bankruptcy Code 2016 (the Code) by its creditors. Reference is invited to Note 50 of the standalone Ind AS financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its loss including other comprehensive income, statement of changes in equity and its cash flows for the year ended on that date.

Material Uncertainty related to Going Concern

We draw attention to Note 52 in the standalone Ind AS financial statements that the Company has incurred net loss during the year and due to accumulated losses the net worth has been eroded. Further the current liabilities have exceeded the total assets. These events indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to Note 14 (g) in the standalone Ind AS financial statements that the Company has defaulted in repayment of principal dues and interest payable to banks and financial institutions. The Company has provided interest liability based on last available sanction letter on the principal outstanding and is actively in discussion with the lenders for debt restructuring / one time settlement. Pending the final outcome of the settlement with the lenders, no further adjustment have been made in the standalone Ind AS financial statements in respect of the principal amount of loan and interest provided thereon.

Our opinion is not qualified in respect of this matter. Other matter

The standalone financial statements of the Company for the year ended March 31, 2017 and the transition date opening Balance Sheet as at April 01, 2016 were audited by another firm of Chartered Accountants which issued a modified opinion vide their audit report dated May 29, 2017 in respect of point no 1 and 2 described in Basis for Qualified Opinion paragraph above.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditors Report) Order 2016 (“the Order”) issued by Central Government of India in terms of sub section (11) of section 143 of the Act, we give in ‘Annexure A’, a statement on the matters specified in paragraphs 3 and 4 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 best of 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, except for non-compliance with Ind AS 36 ‘Impairment of Assets’ and Ind AS 109 ‘Financial Instruments’ as mentioned in the Basis for Qualified Opinion paragraph.

e) The matter described in the Basis for Qualified Opinion paragraph and in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ‘Annexure B’.

i) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. Refer Note 49 to the standalone Ind AS financial statements;

ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

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

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

Report on Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Companies Act, 2013 (“the Act”) of Tilaknagar Industries Ltd. (“the Company”)

i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) All fixed assets have not been physically verified by the management during the year but there is a regular program of verification over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii) The management has conducted physical verification of inventory at the year end. In our opinion the frequency of such verification is reasonable. The discrepancies noticed on verification between the physical stock and book records were not material.

iii) The Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable.

iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the investments made, loans, securities and guarantee given.

v) The Company has not accepted any deposits during the year within the meaning of the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

vi) We have broadly reviewed the books of account maintained by the Company in respect of products pursuant to the rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company’s products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income tax, Sales Tax, Service tax, Customs Duty, Excise Duty, Goods and Services Tax (‘GST’), Value Added Tax, Cess and any other material statutory dues, to the extent applicable, have generally been regularly deposited with the appropriate authorities during the year though there have been delays.

b) According to the information and explanations given to us, there are no undisputed dues in respect of Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Services Tax (‘GST’), Value Added Tax, Cess and any other material statutory dues applicable to it, which were outstanding, at the year end for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, the dues outstanding of Income Tax or Sales Tax or Excise Duty that have not been deposited on account of any dispute are as follows:

(Rs. in Lacs)

Name of the Statute

Nature of dues

Period to which it relates

Amount

Forum where the Dispute is pending

Income Tax Act, 1961

Income Tax

A.Y. 2009-2010

562.47

CIT (Appeals)

Sales Tax Laws

Central Sales Tax

F.Y. 2011-2012

295.06

Joint Commissioner (Appeals)

Sales Tax Laws

MVAT

F.Y. 2010-2011

36.94

Deputy Commissioner (Appeals)

Sales Tax Laws

Central Sales Tax

F.Y. 2010-2011

244.96

Deputy Commissioner (Appeals)

Sales Tax Laws

Central Sales Tax

F.Y. 2009-2010

272.20

Deputy Commissioner (Appeals)

viii) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has defaulted in repayment of principal amount of loans and interest to banks and financial institutions. There were no outstanding dues to Government or any debenture holders anytime during the year. The details of default are given below :

(Rs. in Lacs)

Name of lenders

Nature of Loan

Particulars

Amount of default as at Balance Sheet date

Period of default

EARC - (Loan take over from Axis Bank Limited)

Cash Credit

Interest

1,700.01

March 2016 to March 2018

EARC - (Loan take over from IFCI)

Term Loan

Interest

7,148.67

December 2015 to March 2018

EARC - (Loan take over from Punjab National Bank)

Cash Credit

Interest

5,178.84

October 2015 to March 2018

State Bank of India

Cash Credit

Interest

6,656.37

January 2016 to March 2018

Bank of India

Cash Credit

Interest

7,478.20

October 2015 to March 2018

Industrial Development Bank of India

Cash Credit

Interest

1,042.60

June 2016 to March 2018

EARC - (Loan take over from Axis Bank Limited)

Cash Credit

Outstanding Amount

5,495.55

March 2016 to March 2018

EARC - (Loan take over from Punjab National Bank)

Cash Credit

Outstanding Amount

11,176.42

October 2015 to March 2018

State Bank of India

Cash Credit

Outstanding Amount

15,496.73

January 2016 to March 2018

Bank of India

Cash Credit

Outstanding Amount

16,475.65

October 2015 to March 2018

Industrial Development Bank of India

Cash Credit

Outstanding Amount

2,499.71

June 2016 to March 2018

ix) The Company did not raise any money by way of initial public offer or further public offer including debt instruments during the year. The Company has not taken any term loan from Banks during the year. According to the information and explanations given to us the term loans taken in the past have been defaulted as referred in point (viii) above.

x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

xi) In our opinion, managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 of the Act read with Schedule V to the Act.

xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable Indian Accounting standards.

xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

(Referred to in paragraph (f) under ‘Report on other Legal and Regulatory Requirements section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act”)

We have audited the internal financial controls over financial reporting of Tilaknagar Industries Ltd. (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013 to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that :

1) pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company.

2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorisation of management and directors of the Company.

3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For M. M. Parikh & Co.

Chartered Accountants

Firm Registration No.107557W

Kishor M. Parikh

Place : Mumbai Partner

Date : June 14, 2018 Membership No. 031110