To
The Members of
Terrascope Ventures Ltd
(Formerly known as Moryo Industries Limited)
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Terrascope Ventures
Ltd(Formerly known as Moryo Industries Limited) ("the Company"), which
comprise the balance sheet as at 31st March, 2020, and the statement of Profit and Loss,
including statement of Other Comprehensive Income, statement of cash flows and statement
of changes in equity and for the year ended, and notes to the financial statements,
including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Financial Statements give the information required by the
Companies Act, 2013, as amended("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, 2020, and profit/loss
including other comprehensive income,its cash flows and changes in equity for the year
ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the ‘Auditors Responsibilities for the Audit of
the Financial Statements section of our report. We are independent of the Company in
accordance with the ‘Code of Ethics issued by the Institute of Chartered Accountants
of India together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 and the Rules
thereunder, in accordance with these requirements and the Code of Ethics. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion on Financial Statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements for financial year ended March 31,
2020. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. For each matter below, our description of how audit addressed the matter
is provided in the context.
We have determined the matters described below to be the key audit matters to be
communicated in our report. We have fulfilled the responsibility described in the
Auditors Responsibilities for the Audit of the Financial Statements of our report,
including in relation to these matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the risk of material misstatement of
the Financial Statements. The result of our audit procedures. Including the procedures
performed to address the matters below, provide the basis of our audit opinion on
accompanying Financial Statements.
Description of each key audit matter in accordance with SA 701
| Key Audit matters |
How our audit addressed the key audit matter |
| Inter Corporate Loans |
|
| - The value of loans as at 31st March 2020 is significant and there is a high degree
of complexity and judgment involved for the company in the estimating individual and
collective credit impairment provisions and write-offs against these loans. |
Our audit procedure included considering the appropriateness of the companys
accounting policies for impairment of financial assets and assessing compliance with Ind
AS 109. |
| - The Companys impairment provision for receivables from financing business is based
on the expected credit loss approach laid down under Ind AS 109. |
For loans which are assessed for impairment on a portfolio basis we performed
particularly the following procedures: |
| Under this approach, the management has been required to exercise judgment in areas
such as; |
- We understood the methodology and policy laid down for loans given by the company. |
| - calculation of past default rates |
- we have verified the existence of recovery process plant in the event of default. |
| - applying macro-economic factors to arrive at forward looking probability of default;
and |
- we have verified the historical trends of repayment of principal amount of loan and
repayment of interest. |
| - significant assumption regarding the probability of various scenarios and
discounting rates for different industries considering individual borrower profile. |
- we tested the reliability of the key data inputs and related management controls. |
| In view of the high degree of estimation involved in the process of calculation
impairment provision and considering its significance to the overall Ind AS financial
statement, whereby any error or omission in estimation may give rise to a material
misstatement of Ind AS financial statements, it is considered as a key audit matter. |
- we have assessed the assumptions made by the company in making provision considering
forward looking information. |
| Measurement of Investment in accordance with Ind AS 109 "Financial
Instruments" |
Principal Audit procedure: |
| On initial recognition, investment is recognized at fair value in vase of investment
which are recognized at fair value through FVOCI. In that case that transaction costs are
attributable to the acquisition value of the investments. |
- Obtaining an understanding of the companies objectives for such investments and
assessment thereof in terms of Ind AS 109. |
| The Companys investment are subsequently classified into following categories based
on the objective to manage the cash flows and options available in the standard: |
- Obtaining an understanding of the determination of the measurement of the
investments and tested the reasonableness of the significant judgment applied by the
management. |
| - At amortised cost |
- Evaluated the design of internal controls relating to measurement and also tested
the operating effectiveness of the aforesaid controls. |
| - At fair value through profit or loss (FVTPL) |
- Obtaining understanding of basis of valuation adopted in respect of fair value
investment and ensured that valuation techniques used are appropriate in circumstances and
for which sufficient |
| - At fair value through Other comprehensive Income (FVTOCI) The company has assessed
following two objectives: |
|
| - Held to collect contractual cash flows. |
|
| - Realising cash flows through sale of investments. The Company makes decision based
on assets fair value and manages the assets to realize those fair values. |
|
Information other than Financial Statements and Auditors report thereon
The companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual report, but does not include
the Financial Statements and our auditors report thereon.
Our opinion on Standalone Financial Statements does not cover the other information and
we do not express any form of conclusion thereon.
In connection with our audit of Financial Statements, our responsibility is to read the
other information, and in doing so, consider whether such other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Emphasis of Matters
1. During the year company has provided for written of receivables to the extent of Rs.
48.09 lakhs against non-recoverability of the amount receivable.
2. The company has invested in 70000 12% Non-cumulative Preference shares of
Saptashrungi Alloy Private Limited at issue price of Rs. 70 out of which Rs. 50 has been
paid balance Rs. 20 per share is payable on demand and no future obligation has been
accounted in books of accounts of the company.
3. The company has received an order by Securities and exchange board of India
("SEBI") in which they have levied monetary penalty of Rs. 70 lakhs for the
violation of the provisions of Regulations3(a), 3(b), 3(c), 3(d), 4(1), 4(2)(f), 4(2)(k)
and 4(2)(r) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market) Regulations, 2003 and Rs. 30 lakhs under section 23E of SC(R)Act, 1956
for the violations of the provisions of section 21 of the Securities Contracts
(Regulation) Act, 1956 read with clause 43 of the Listing Agreement on April 29, 2020. The
company is in the process of filing an appeal with securities appellant tribunal, no
provision has been booked for the year ended March 31, 2020 though company has provided
contingent liability in the financial statements of the company (Refer Note 25 of
Financial Statements of the company)
Our opinion is not modified in respect of above matter.
Responsibilities of Management for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial performance, cash
flowsand changes in equity of the Company in accordance with the accounting principles
generally accepted in India, including the accounting Standards specified 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 of 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 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 financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the Board of Directors either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
Identify and assess the risk of material misstatement of the Standalone Financial
Statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)
of the Act, we are also responsible for expressing our opinion on whether has adequate
internal financial controls systems in place and the operating effectiveness of such
controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exits
related to events or conditions that may cast significant doubt on the Companys ability
to continue as a going concern. If we conclude that a material uncertainty exits, we are
required to draw attention in our auditors report to the related disclosures in the
Standalone 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
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone Financial
Statements, including the disclosures, and whether the Standalone Financial Statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including and
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we may have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in audit of Standalone financial Statements for the
financial yearended March 31, 2020 and are therefore the Key audit matters. We describe
that these matters in our Auditors report unless law and regulations precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should be not communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such
communications.
Other Matters
In certain cases, the Company has not charged interest on Loans and advances given to
certain parties. The non-charging interest makes these loans Interest free loans and
thereby violates section 186(7) of the Companies Act, 2013. Effect on the aforesaid cannot
be quantified.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditors report) Order 2016, ("The order"),
issues by the central government of India in terms of sub section (11) of Section 143(3)
of the Act, we give in the "Annexure 1" a statement on the matters
specified in paragraph 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 ouraudit.
(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) 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 financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules,2014.
(e) On the basis of the written representations received from the directors as on 31st
March, 2020 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2020 from being appointed as a director in terms
of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company with reference to financial statements and the operating
effectiveness of such controls, refer to our separate Report in "Annexure 2"
to this report;
(g) In our opinion, the management remuneration for the year ended March 31, 2020 has
been paid/provided by the Company to its directors in accordance with the provisions of
section 197 read with Schedule V to the Act.
(h) With respect to the other matters to be included in the Auditors 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 financial statements Refer Note 23 to the 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.
ANNEXURE "1"
Referred to in Paragraph 1 under the heading of "Report on other Legal and
Regulatory Requirements" of our report to the members of Terrascope Ventures Ltd
(Formerly known as Moryo Industries Limited) of even date
On the basis of such checks as we considered appropriate and in terms of the
information and explanations given to us, we report that: -
i. In respect of companies fixed assets:
a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of its fixed assets.
b) The Company has a regular program of physical verification of its fixed assets by
which fixed assets are verified in a phased manner over a period of three years. In
accordance with this program, certain fixed assets were verified during the year and no
material discrepancies were noticed on such verification. In our opinion, this periodicity
of physical verification is reasonable having regard to the size of the Company and the
nature of its assets.
c) There are no immovable properties held by the Company.
ii. The management has conducted physical verification of inventory at reasonable
intervals during the year and no material discrepancies were noticed on such physical
verification. X
iii. According to the information and explanations given to us, the Company has not
granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships
or other parties listed in the register maintained under Section 189 of the Companies Act,
2013. Accordingly, the provisions of clauses 3(iii) (a), (b) and (c) of the order are not
applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the
Company has not advanced loans to directors / to a company in which the Director is
interested to which provisions of section 185 of the Companies Act, 2013 apply and hence
not commented upon. In our opinion and according to the information and explanations given
to us in certain cases the Company has not charged interest on Loans and advances given to
certain parties. The non-charging interest makes these loans Interest free loans and
thereby violates section 186(7) of the Companies Act, 2013. Effect on the aforesaid cannot
be ascertained from the available information and explanations given to us by the company
and hence not commented upon.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of
the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly,
the provisions of clause 3(v) of the Order are not applicable to the Company
vi. The maintenance of cost records has not been specified by the Central Government
under Section 148(1) of the companies Act, 2013 for the business activities carried out by
the company, thus reporting under clause 3(vi) of the order is not applicable to the
Company.
vii. a) According to information and explanations given to us, the Company has been
generally regular in depositing undisputed statutory dues, including Provident Fund,
Employees State Insurance, Income Tax, Goods and Service Tax, Custom Duty, Cess,
Professional Tax and other material statutory dues applicable to it with the appropriate
authorities.
b) According to the information and explanations given to us, no undisputed amounts
payable in respect of provident fund, employees state insurance, income-tax, ,goods and
service tax, sales-tax, duty of custom, duty of excise, cess and other material statutory
dues were outstanding, at the year end, for a period of more than six months from the date
they became payable
c) According to the records of the Company, the dues outstanding of income-tax,
sales-tax, service tax, goods and service tax. duty of custom, duty of excise, value added
tax and cess on account of any dispute, are as follows:
| Name of Statute |
Nature of the dues |
Amount |
Period to which the amount relates |
Forum where dispute is pending |
| Income Tax Act, 1961 |
Income Tax dues |
66,45,460/- |
AY2013-14 |
CIT (A) |
| Income Tax Act, 1961 |
Income Tax dues |
1,21,44,840/- |
AY2014-15 |
CIT (A) |
viii. The Company has not taken any loans from Government, any Financial Institution or
debenture holders during the year.
ix. The Company did not raise any money by way of Initial Public offer, further public
offer or term loan during the year, thus reporting under clause 3(ix) of the order is not
applicable to the Company.
x. To the best of our knowledge and according to the information and explanations given
to us, no fraud by the Company or no material fraud on the company by its officers or
employees has been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us, the
company has paid / provided managerial remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197 read with Schedule V to the Companies
Act.
xii. In our opinion and according to the information and explanations given to us, the
Company is not a Nidhi company. Therefore, paragraph 3(xii) of the Order is not
applicable.
xiii. In our opinion and according to the information and explanations given to us, the
Company is in compliance with Sections 177 and 188 of the Companies Act, 2013 where
applicable, for all transactions with the related parties and the details of related party
transactions have been disclosed in the Standalone Financial Statements as required by the
applicable accounting standards.
xiv. During the Year, the company has not made any preferential allotment or private
placement of shares fully or partly paid convertible debentures and hence, reporting under
clause 3 (xiv) of the Order is not applicable to the Company.
xv. In Our opinion and according to the information and explanations given to us,
during the year the Company has not entered into any non-cash transactions with its
Directors or persons connected to its directors and hence provisions of Section 192 of the
Companies Act, 2013 are not applicable to the Company.
xvi. According to the information and explanations given to us, the provisions of the
section 45-IA of the
Reserve Bank of India Act, 1934 are not applicable to the company.
Annexure 2
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 Terrascope
Ventures Ltd (Formerly known as Moryo Industries Limited)("the Company") as
of March 31, 2020 in conjunction with our audit of the financial statements of the Company
for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 respective companys 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 by the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys 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. 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 auditors judgment, including the assessment of the risks of
material misstatement of the 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 Companys internal financial controls system
over financial reporting with reference to Financial Statements.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting with reference to these
Standalone Financial Statements is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting
principles. A companys internal financial control over financial reporting with reference
to these Financial Statements 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 financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorisations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the Companys 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 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, to the best of our information and according to the explanations given
to us, 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, 2020, 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.
| For Dassani& Associates |
| Chartered Accountants |
| (FRN No : 009096C.) |
| Sd/- |
| CA Churchil Jain |
| (Partner ) |
| (Membership No: 409458) |
| Place of Signature: Indore |
| Date:24/07/2020 |
| UDIN No:20409458AAAAAZ4798 |
+91-9892691696
