We have audited the accompanying standalone financial
statements of Tilaknagar Industries Ltd. ("the Company"),
which comprise the Balance Sheet as at March 31, 2026, 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 ended on that date,
and a summary of significant accounting policies and other
explanatory information (hereinafter referred to as the
"standalone financial statements").
In our opinion and to the best of our information and according
to the explanations given to us, except for the possible
effects of the matters described in basis for qualified opinion
paragraph, the aforesaid standalone financial statements give
the information required by the Companies Act, 2013 ("the
Act") in the manner so required and give a true and fair view
in conformity with the Indian Accounting Standards prescribed
under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, ("Ind AS")
and other accounting principles generally accepted in India,
of the state of affairs of the Company as at March 31, 2026,
the profits and total comprehensive income, changes in equity
and its cash flows for the year ended on that date.
Basis for Qualified Opinion
a) The Company has not carried out impairment assessment
of one of the ENA plants that is not in operation, as required
by Indian Accounting Standard (Ind AS 36) 'Impairment of
Assets' though there is an indication of impairment. Reference
is invited to note no. 42 of the standalone financial statements.
We conducted our audit of the standalone financial statements
in accordance with the Standards on Auditing specified
under section 143(10) of the Act (SAs). Our responsibilities
under those Standards are further described in the 'Auditor's
Responsibilities for the Audit of the Standalone 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 (ICAI) together with
the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the
Rules made thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the
ICAI's Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Emphasis of Matters
We draw attention note no 51 in standalone financial
statements in respect of composite scheme of amalgamation
("The Scheme") between the Company and its subsidiaries
approved by the Board, which is subject to approval by the
shareholders, creditors, NCLT and other regulatory authorities,
hence no accounting effect has been given pursuant to the
scheme as on Balance Sheet date. Our Opinion is not modified
in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements of the current period. These
matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters. We have determined the matters described
below to be the key audit matters to be communicated in
our report.
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Key audit matter
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How our audit addressed the key audit matter
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Revenue recognition and trade receivables
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Our audit procedures related to revenue recognition included, but
were not limited, to the following:
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Refer to note 1.3 (xi) and 1.3(xvii) d to the accompanying
standalone financial statements for the Company's material
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• Understood the nature of revenue transactions and evaluated
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accounting policy information relating to revenue recognition
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the appropriateness of the accounting policy adopted by the
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and trade receivable and note 17 for the details of revenue
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management in accordance with Ind AS 115;
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recognised, note 8 for details of trade receivables and note 8 for
credit risk disclosures.
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• Evaluated the design and tested the operating effectiveness
of Company's key internal financial controls around revenue
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The Company derives its revenue from sale of alcohol and
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recognition including relating to determination of variable
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other alcoholic products to a wide range of customers through
a network of distributors and state government corporations.
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consideration and satisfaction of performance obligations;
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Such revenue is recognised in accordance with Ind AS 115,
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• On a sample basis, tested revenue transactions recorded during
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"Revenue from Contracts with Customers" ('Ind AS 115'),
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the year, including during specific period before and after
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which requires management to make certain key judgements,
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year end, basis inspection of supporting documents such as
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such as, identification of performance obligations in contracts
with customers, determination of transaction price for the
contract including variable consideration in the form of rebates,
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customer contracts, price lists, invoices, proof of dispatch and
delivery including regulatory documents used or movement of
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discounts and pay-outs to distributors under various promotional
schemes of the Company, andassessment of satisfaction of
the performance obligations under each contract representing
the transfer of control of the products sold to the customers
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liquor as per applicable regulations in order to ensure revenue
is recorded with the correct amount and in the correct period;
• Performed substantive testing by selecting a sample of
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including state government corporations.
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discounts, rebate and other pay-out transactions with
customers and distributors recorded during the year as well
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Further, Ind AS 115 also requires evaluation in respect of principal
versus agent relationship of the Company with its 'tie-up units'
and 'royalty units' as explained in the material accounting policy
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as period end accrual basis the promotion schemes offered
by the Company;
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information referred above.
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• Performed substantive analytical procedures including review
of price, quantity and product mix variances and analysis of
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Owing to the multiplicity of the Company's products, volume
of sales transactions, size of distribution network, nature of
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discounts to identify any unusual trends; and
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customers and varied terms of contracts with different customers,
revenue recognition is determined to be an area involving
significant risk in line with the requirements of theStandards on
Auditing and hence audit of revenue recognised during the year
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• Evaluated appropriateness and adequacy of the disclosures
made in the accompanying standalone financial statements in
respect of revenue recognition in accordance with
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required significant auditor's attention.
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• Applicable financial reporting framework.
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Further, the Company has significant balance of trade receivables
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Further, our audit procedures related to trade receivables
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[net of allowance for Expected Credit Loss ('ECL')] as at March 31,
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included, but were not limited, to the following:
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2026. These receivables include dues from state government
corporations, customers and distributors.
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• Obtained understanding of the processes adopted by the
management in determining the ECL provision and evaluated
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The Company applies simplified approach as required by Ind
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the appropriateness accounting policy adopted by the
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AS 109, Financial Instruments ('Ind AS 109') for assessment of
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management in accordance with Ind AS 109;
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loss allowance with respect to trade receivables, which involves
significant judgements and assumptions including stratification
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• Evaluated the design and tested the operating effectiveness
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of customer balances, past realisation history, estimation for
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of key internal financial controls over process of collection of
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timing and amount of realisation expected.
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trade receivables; follow up of overdue balances; assessing the
recoverability of trade receivables;
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• Circulated requests for direct confirmations on sample basis
for outstanding invoice balances as at year-end and evaluated
the responses received. Performed other alternate procedures
for the cases where customer's confirmations not received;
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• Tested subsequent settlement of outstanding trade receivables
on sample basis;
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Key audit matter
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How our audit addressed the key audit matter
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• Evaluated the appropriateness of the ECL model used by
the management, including inputs and assumptions such as
classes of customers, past trends of recovery and default rates
as adjusted for future expectations, basis our understanding
of the business and relevant market conditions;
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• Recomputed the ageing of trade receivables for a sample of invoices
and tested mathematical accuracy of the workings prepared by the
management; and
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• Evaluated the appropriateness and adequacy of disclosures made
in accompanying standalone financial statements in respect of
trade receivables and ECL in accordance with applicable financial
reporting framework.
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Provisions, Contingencies and Litigations and disclosure of
Contingent liabilities
As at the year end, the Company has exposures towards
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• We understood, assessed and tested the design and operating
effectiveness of key controls surrounding provisions, assessment
of litigations relating to the relevant laws and regulations;
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litigations relating to various tax and other matters as set out
in the Notes below. Significant management judgement is
required to assess such matters to determine the probability
of occurrence of material outflow of economic resources and
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• We have reviewed the legal and other professional expenses
and enquired with the management for recent developments
and the status of the material litigations which were reviewed;
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whether a provision should be recognised or a disclosure should
be made. The management judgement is also supported with
legal advice in certain cases as considered appropriate. As the
ultimate outcome of the matters are uncertain and the positions
taken by the management are based on the application of their
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• We performed our assessment on a test basis on the
underlying calculations supporting the contingent liabilities
/ other significant litigations disclosed in the standalone
financial statements.
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best judgement, related legal advice including those relating to
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• We considered external legal opinions, where relevant,
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interpretation of laws / regulations, it is considered to be a Key
Audit Matter.
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obtained by management;
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• We evaluated management's assessments by understanding
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Refer Note no. 29, 43 and 1.3(viii) of standalone financial
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precedents set in similar cases and assessed the reliability of
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statements and accounting policies for contingent liabilities,
provisions and related disclosures.
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the management's past estimates /judgements;
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• We evaluated management's assessment around those matters
that are not disclosed or not considered as contingent liability,
as the probability of material outflow is considered to be
remote by the management; and
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• We assessed the adequacy of the Company's disclosures.
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Identification, valuation and recognition of intangible
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In responding to the significant judgements and estimates involved
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assets arising from the acquisition of Imperial Blue Business
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in identifying and valuing the intangible assets (including goodwill)
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Division from Pernod Ricard India Private Limited
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acquired and their income tax treatment, our audit procedures
included:
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On the terms and subject to the conditions of this Agreement,
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• Reviewing the Scheme of Arrangement, the agreements
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the Seller shall sell, and the Purchaser shall purchase, the
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and other documents related to the acquisition to obtain an
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Business Undertaking as a going concern, on a Slump Sale basis
(as defined under Section 2(42C) read with Section 50B of the
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understanding of the transaction;
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ITA and as per GST Act) for a lump sum consideration, which
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• Understanding the process followed by the Company for
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shall be sold free from all Encumbrances other than Permitted
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assessment of the accounting treatment for the Scheme
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Encumbrances, but excluding all Excluded Assets, Excluded
Liabilities and the Excluded Business. The fair value of the
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of Arrangement, including the identification of assets and
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Consideration transferred by the Company is determined to be C
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liabilities and determination of their fair values and also
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3,44,234.13 lacs in addition to the base consideration a deferred
consideration present value is C 19,098.93 lacs (equivalent
to EURO 28 million) is payable at the end of 4 years from the
acquisition date towards the said acquisition. The acquisition of
the Undertaking included identifiable tangible and intangible
assets acquired and liabilities assumed.
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evaluation of work of management experts;
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Key audit matter
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How our audit addressed the key audit matter
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The Management engaged (Management's fair valuation expert)
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• Testing the completeness of the identified assets acquired
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to assist in the process to identify and determine the fair value of
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and liabilities assumed as per the Scheme of Arrangement,
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these assets and liabilities.
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through discussions with the Company and their external
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In addition to recognition of Goodwill of C 9,496.55 lacs, the
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valuation experts;
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management has identified intangible assets relating to Brand
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• Assessing the appropriateness of assets identified and the
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and other intangible assets of C 3,20,140 lacs.
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valuation methodology applied by managements expert
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Our audit focused on this area because significant judgement
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and considering whether identification and recognition of
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and estimates are involved in identifying and determining the
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intangible assets was consistent with the requirements of the
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fair value of the intangible assets (including goodwill) acquired.
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accounting standards;
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Refer Note no. 46 of standalone financial statements and
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• Evaluating the appropriateness of the valuation methodologies
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accounting policies for acquisition of Imperial Blue Business
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applied and also, test the inputs to the valuation models used
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Division from Pernod Ricard India Private Limited.
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to determine the value of the intangible assets;
• Challenging the reasonableness of the key assumptions,
including discount rate, near and long-term revenue growth
rate and projected margins for indefinite life intangible asset
based on future business prospects and external industry
growth rate;
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Information Other than the Standalone Financial
Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other
information. The other information comprises the information
included in the Management Discussion and Analysis,
Board's Report including Annexures to Board's Report,
Business Responsibility Report, Corporate Governance and
Shareholder's Information, but does not include the financial
statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained during the course of our audit or otherwise appears
to be materially misstated.
If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Management's Responsibility for the
Standalone Financial Statements
The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to
the preparation of these financial statements that give a true
and fair view of the financial position, financial performance,
total comprehensive income, changes in equity and cash
flows of the Company in accordance with the Ind AS and
other accounting principles generally accepted in India.
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 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, management is
responsible for assessing the Company's ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibilities for the Audit of the
Standalone 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 auditor's 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 scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
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 controls
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 the Company has adeguate
internal financial controls system 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 management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
doubt on the Company's ability to continue as a going
concern. If we conclude that a material uncertainty exists,
we are reguired to draw attention in our auditor's report
to the related disclosures in the financial statements or, if
such disclosures are inadeguate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up
to the date of our auditor's 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 financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events in a manner that achieves
fair presentation.
Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable
user of the financial statements may be influenced. We
consider Quantitative materiality and Qualitative factors in
(i) planning the scope of our audit work and in evaluating
the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
We communicate with Those Charged With Governance
(TCWG) regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
We also provide Those Charged With Governance (TCWG)
with a statement that we have complied with relevant ethical
reguirements 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 (TCWG), we determine those matters that were
of most significance in the audit of the financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law
or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse conseguences of doing so would reasonably
be expected to outweigh the public interest benefits of
such communication.
Report on Other Legal and Regulatory
Requirements
1. As reguired by the Companies (Auditor's Report) Order,
2020 ("the Order") issued by the Central Government in
terms of Section 143(11) of the Act, we give in "Annexure
A" a statement on the matters specified in paragraphs 3
and 4 of the Order.
2. As reguired by Section 143(3) of the Act, based on our
audit we report that:
a) We have sought and except for the matter described
in the Basis for Qualified Opinion paragraph,
obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purposes of our audit.
b) Except for the possible effects of the matter
described in the Basis for Qualified Opinion
paragraph above and for the matter stated in the
paragraph 2i(vi) below on reporting under Rule 11(g)
of the Companies (Audit and Auditors) Rules, 2014,
in our opinion, proper books of account as reguired
by law have been kept by the Company so far as it
appears from our examination of those books.
c) The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss including Other
Comprehensive Income, the Standalone Statement
of Changes in Eguity and the Standalone Statement
of Cash Flows dealt with by this Report are in
agreement with the relevant books of account.
d) Except for the possible effects of the matter described
in the Basis for Qualified Opinion paragraph above,
in our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified under
Section 133 of the Act.
e) The matter described in the Basis for Qualified
Opinion paragraph above, in our opinion, may
have an adverse effect on the functioning of
the Company.
f) On the basis of the written representations received
from the directors as on March 31, 2026 and taken
on record by the Board of Directors, none of the
directors is disgualified as on March 31, 2026 from
being appointed as a director in terms of Section
164 (2) of the Act.
g) The modifications relating to the maintenance of
accounts and other matters connected therewith
are as stated in basis for gualified opinion paragraph
and paragraph '2.(b)' above on reporting under
Section 143(3)(b) of the Act and in paragraph '2.(i)
(vi)' below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.
h) With respect to the adeguacy 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". Our report
expresses an unmodified opinion on the adeguacy
and operating effectiveness of the Company's
internal financial controls over financial reporting.
i) With respect to the other matters to be included
in the Auditor's Report in accordance with the
reguirements of section 197(16) of the Act,
as amended:
I n our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the year is in accordance with the provisions
of section 197 of the Act.
j) 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,
as amended 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 litigation on its financial position as
at March 31, 2026, Refer Note no. 29.
ii. The Company did not have any long-term
contracts including derivative contracts
for which there were any material
foreseeable losses.
iii. There were no amounts which were reguired
to be transferred to the Investor Education and
Protection Fund by the Company during the
year ended March 31, 2026.
iv. (a) The Management has represented that,
to the best of its knowledge and belief,
no funds (which are material either
individually or in the aggregate) have
been advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in any
other person or entity, including foreign
entity ("Intermediaries"), with the
understanding, whether recorded in
writing or otherwise, that the Intermediary
shall, whether, directly or indirectly lend
or invest in other persons or entities
identified in any manner whatsoever by
or on behalf of the Company ("Ultimate
Beneficiaries") or provide any guarantee,
security or the like on behalf of the
Ultimate Beneficiaries;
(b) The Management has represented, that,
to the best of its knowledge and belief,
no funds (which are material either
individually or in the aggregate) have
been received by the Company from
any person(s) or entity(ies), including
foreign entity ("Funding Parties"), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall, whether directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and
(c) Based on the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above, contain
any material misstatement.
v. (a) The final dividend proposed in the
previous year, declared and paid by the
Company during the year is in accordance
with Section 123 of the Act, as applicable.
(b) The Company did not declare any interim
dividend in the current year.
(c) The Board of Directors of the Company
have proposed final dividend for the
year which is subject to the approval
of the members at the ensuing Annual
General Meeting. The amount of dividend
proposed is in accordance with section
123 of the Act, as applicable.
vi. Based on our examination, which included
test checks, the Company has used accounting
software for maintaining its books of account
for the financial year ended March 31, 2026
which has a feature of recording audit trail
(edit log) facility and the same has operated
throughout the year for all relevant transactions
recorded in the software except that audit trail
was not enabled at the application layer and
database level to log any direct data changes.
During the course of performing our procedures
other than the aforesaid instances of audit
trail not enabled, where the question of
commenting does not arise, we did not come
across any instance of the audit trail feature
being tampered with. Further the Company
has preserved the audit trail for the prior
financial year in compliance with the statutory
record retention requirements, except in cases
where audit trail feature was not enabled.
For Harshil Shah & Company
Chartered Accountants
ICAI Firm Reg. No. 141179W
Himmat Sharma
Partner
Membership No. 156501
ICAI UDIN : 26156501EXSXJD3200
Place : Mumbai
Date : May 29, 2026
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