To the Members of DCM Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of DCM Limited(the Company) which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Managements responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone 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 Accounting Standardsspecified in section 133 of the Act read with Rule 7 of Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we 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 theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial controls relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2016 and its profit and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section 11 ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified 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 bestof our knowledge and belief were necessary for the purposes of our audit;
b. in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c. the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account ;
d. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
e. on the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) ofthe 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 ourseparate Report in "Annexure B"; and
g. with respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements - Refer note 32 and 43 of the standalone financialstatements.
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. Refer note 44 of the standalonefinancial statements.
iii. there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company after considering Scheme ofRestructuring and Arrangement pursuant to which certain past dues have been rescheduledfor repayment. Refer note 30 of the standalone financial statements.
| ||For B S R & Co. LLP |
| ||Chartered Accountants |
| ||Firms registration no.: 101248W/W-100022 |
| ||Kaushal Kishore |
|Place : New Delhi ||Partner |
|Date : May 30 2016 ||Membership No.: 090075 |
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inaccordance with the said programme a portion of fixed assets were physically verified bythe management during the year and no material discrepancies have been noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 11 to the standalone financial statements are held in the name of theCompany.
(ii) The inventories except goods-in-transit have been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable.The discrepancies noticed on verification between the physicalstocks and the book records were not material.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Thus paragraph 3(iii) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans and advances covered under the provisions of section 185and 186 of the Act. Thus paragraph 3(iv) of the Order is not applicable.
(v) The Company has not accepted any deposits from the public during the year.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013 andare of the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview 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/ accruedin the books of account in respect of undisputed statutory dues including provident fundemployees state insurance income tax sales tax service tax value added tax dutyof customs duty of excise cess and other material statutory dues have generally beenregularly deposited during the year by the Company with the appropriate authorities thoughthere have been slight delays in few cases.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees state insurance income tax salestax service tax value added tax duty of customs duty of excise cess and othermaterial statutory dues were in arrears as at March 31 2016 for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us there are no dues ofincome-tax duty of excise sales tax duty of customs service tax value added tax andcess which have not been deposited with the appropriate authorities on account of anydispute other than those mentioned below:
|Name of the statute ||Nature of dues ||Amount Involved * (Rs. in lacs) ||Amount paid under protest (Rs. in lacs) ||Period to which amount relates ||Forum where dispute is pending |
|Income -tax Act 1961 ||Income -tax ||58.39 ||- ||Assessment Year 2013-14 ||Commissioner of Income tax (Appeals) |
| || ||12.73 ||12.73 ||Assessment Year2008-09 ||Income Tax Appellate Tribunal |
| || ||12.33 ||- ||Assessment Year2009-10 || |
| || ||10.08 ||5.00 ||Assessment Year2012-13 || |
|Customs Act 1962 ||Customs duty ||12.55 ||' ||1988-89 ||Commissioner of Customs (Appeals) |
|Central Excise Act 1944 ||Excise duty ||510.43 || ||2004- 05 2005- 06 2006- 07 2008-09 2006-07 to 2010-2011 ||Central Excise and Service Tax Appellate Tribunal |
| || ||1.47 ||0.06 ||2013-14 ||Commissioner of Central Excise (Appeals) |
| || ||0.50 ||- ||2002- 03 2003- 04 ||Supreme Court |
|Punjab VAT Act ||Sales tax ||130.25 ||35.09 ||2009-10 ||Punjab VAT Appellate Tribunal |
|2005 || ||146.96 ||36.75 ||2010-11 || |
* amount as per demand orders including interest and penalty wherever indicated in thedemand.
For the above purposes statutory dues payable in India have been considered. Furtherthe demands raised and already set off by the Income-tax Authorities against the carriedforward losses of the Company or there funds due to the Company being no longer due forpayment have not been considered.
The following matters which have been excluded from the table have been decided infavour of the Company although we are informed that the concerned regulatory authorityhas preferred appeal at a higher level:
|Income -tax ||Income -tax ||442.48 ||Assessment Year 1983-84 to 1990-91 ||Income tax ap- pellate tribunal |
| || ||33.25 ||Assessment Year 2010-11 ||Income tax ap- pellate tribunal |
| || ||27.93 ||Assessment Year 2009-10 ||Delhi High Court |
| || ||76.35 ||Assessment Year 2011-12 ||Income tax ap- pellate tribunal |
| || ||62.93 ||Assessment Year 2012-13 ||Income tax ap- pellate tribunal |
(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not defaulted in repaymentof loans or borrowing to a financial institution bank Government or dues to debentureholders.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer during the year (including debt instruments) and the term loans were appliedfor the purposes for which those were raised.
(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
(xi) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company and as fully explained in note 48 to thefinancial statements out of the managerial remuneration amounting to Rs. 26.47 lakhspaid/ provided to the managing director of the Company Rs. 5.83 lakhs is over and abovethe limits provided as per the provisions of section 197 read with Schedule V to theCompanies Act 2013 which is subject to the approval of Central Government. The
Company has obtained necessary approval from the shareholders of the Company in respectof the aforesaid remuneration through postal ballot. The Company is in the process ofobtaining necessary approvals from the Central Government for the said remunerationapproved by the shareholders over and above the limits provided under the Companies Act2013. Further the Company has received an undertaking from the managing director forrefund of the excess remuneration in the event of non-receipt of the Central Governmentapproval.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
(Firm's Registration No. 101248W/W-100022)
(Membership No. : 090075
Place: New Delhi
Dated: May 30 2016
Annexure B to the Independent Auditors Report on the standalone financialstatements for the year ended March 31 2016
Report on the Internal Financial Controls under clause (i) of sub-section 3 of section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of DCM Limited("the Company") as of March 31 2016 in conjunction with our audit of theStandalone 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 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 including adherence to Companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Companys assets that could have a material effect on thestandalone 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 our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For B S R & Co. LLP
Firms registration no.: 101248W/W-100022
Membership No.: 090075
Place : New Delhi
Date : May 30 2016