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DCW Ltd.

BSE: 500117 Sector: Industrials
NSE: DCW ISIN Code: INE500A01029
BSE LIVE 15:56 | 22 Nov 44.50 1.70
(3.97%)
OPEN

43.70

HIGH

44.85

LOW

43.40

NSE 15:40 | 22 Nov 44.55 1.70
(3.97%)
OPEN

43.60

HIGH

44.95

LOW

43.30

OPEN 43.70
PREVIOUS CLOSE 42.80
VOLUME 325513
52-Week high 55.35
52-Week low 26.60
P/E
Mkt Cap.(Rs cr) 978
Buy Price 44.50
Buy Qty 5749.00
Sell Price 0.00
Sell Qty 0.00
OPEN 43.70
CLOSE 42.80
VOLUME 325513
52-Week high 55.35
52-Week low 26.60
P/E
Mkt Cap.(Rs cr) 978
Buy Price 44.50
Buy Qty 5749.00
Sell Price 0.00
Sell Qty 0.00

DCW Ltd. (DCW) - Auditors Report

Company auditors report

TO THE MEMBERS OF DCW LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of DCW Limited("the Company") which comprise the Balance Sheet as at 31st March 2017 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof affairs(financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone Ind AS financial statements that give atrue 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 financialstatements based 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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2017 and itsprofit (financial performance including other comprehensive income) its cash flows andthe changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note 41 (a)(c) and (f) to the financial statements whichdescribes the uncertainty related to the outcome of the petitions/appeals filed by thecompany in the matter of retrospective legislation and electricity tax demand ofRs.3568.70 lacs on captive power generated during the period 2003-2012; in the matter ofcustoms duty demand of Rs.3110.89 lacs on coal imported by the company during 2011 and2012; and in the matter of execution of assignment deeds of the lands at Sahupuram Worksin respect of which the State Government has issued notice of re-possession and demandedlease rent for the period occupied by the company. No provision has been made for all theaforesaid demands and the land is treated as freehold in view of the factors stated inthe said note. Our opinion is not qualified in respect of this matter.

Other Matters

The comparative financial information of the Company for the year ended 31st March 2016and the transition date opening balance sheet as at 1st April 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by us and our reports for the year ended 31st March 2016 and 31stMarch2015 dated 25th May 2016 and 23rd May 2015 respectively expressed an unmodified opinionon those standalone financial statements as adjusted for the differences in theaccounting principles adopted by the Company on transition to the Ind AS which have beenaudited by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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(including Other ComprehensiveIncome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 standalone Ind AS financial statements - Refer Note No 35 and 41 of thefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses - Refer Note No 40 (c) of the financialstatements.

iii. There was no delay in transferring amounts which were required to be transferredto the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements asregards its holding and dealings in Specified

Bank Notes as defined in the Notification S.O. 3407(E) dated 8th November 2016 of theMinistry of Finance during the period from 8th November 2016 to 30th December 2016; andsuch disclosures are in accordance with the books of account maintained by the Company -Refer Note No 46 of the financial statements.

For V. Sankar Aiyar & Co.
Chartered Accountants.
Firm Reg No. 109208W
G. Sankar
Place: Mumbai Partner
Date: 30th May 2017 Membership No. 46050

Annexure A to Auditor's Report

Annexure referred to in our report of even date to the members of DCW Limited on theaccounts for the year ended 31st March 2017

i. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) We are informed that the fixed assets have been physically verified by theManagement during the year. In our opinion the frequency of verification is reasonable. Asper the information given to us by the management no material discrepancies as comparedto book records were noticed in respect of the fixed assets verified during the year.

(c) In our opinion and according to the information and explanations given to us thetitle deeds of immovable properties are held in the name of the company except in case ofcertain lands and buildings referred to in Note 5.2 5.3 5.4 5.5 and 41(f). ii. Theinventories of finished goods (except goods lying with consignees and in-transit) storesspare parts and raw materials have been physically verified by the management with thehelp of external agencies. In our opinion the frequency of physical verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook stocks were not material and have been properly dealt with in the books of account.iii. According to the information and explanations given to us the company has notgranted any loans to companies firms limited liability partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013. iv. Thecompany has not granted any loans guarantees or security and has not made investments towhich the provisions of section 185 and

186 of the Companies Act 2013 apply. v. In our opinion and according to theinformation and explanations given to us the company has not accepted deposits from thepublic during the year. Therefore the provisions of clause (v) of Para 3 of the order arenot applicable to the Company. vi. The Central Government has prescribed maintenance ofcost records under section 148(1) of the Companies Act 2013 in respect of certainproducts manufactured by the Company. We have broadly reviewed the records maintained bythe Company pursuant to the rules made by the Central Government for the maintenance ofcost records under Section 148(1)) of the Companies Act 2013 and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. vii.(a)According to the records maintained by the company the company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income tax sales tax service tax custom duty valueadded tax cess and other statutory dues with appropriate authorities. In case of exciseduty of Rs.967.93 lakhs the company deposited subsequent to the year end after aconsiderable delay.

According to the information and explanations given to us no undisputed amounts inrespect of the aforesaid statutory dues were in arrears as at 31st March 2017 for aperiod of more than six months from the date they became payable except excise dutyamounting to Rs 528.84 lakhs which was in arrears for more than six months from the duedate as at 31st March 2017. We are informed that the said amount has been subsequentlypaid.

(b)According to the information and explanations given to us and the records of thecompany the dues of sales tax/ value added tax / customs duty / service tax / excise duty/ cess which have not been deposited on account of dispute are as follows: (Amount in Rs.lakhs)

Forum where dispute is pending
Name of the Statute / Nature of Dues Period Supreme Court High Court Appellate Tribunal* Appellate Authority** Grand Total
Customs Act 1962 (Custom Duty Including Penalty &Interest wherever applicable) 1997 to 2017 - - 5301.58 - 5301.58
Central Excise Act 1944 (Excise Duty Including Penalty & Interest wherever applicable) 1997 to 2015 - 78.11 380.60 62.15 520.85
Sales Tax legislations (sales tax including penalty & inter est wherever applicable) 1982 to 2017 - 1748.47 457.22 1104.97 3310.66
Service Tax 2005 to 2015 - - - 39.17 39.17
Local cess local cess surcharge [land revenue including penalty and interest wherever applicable] 1989 to 2017 - 735.22 - - 735.22
GRAND TOTAL - 2561.80 6139.40 1206.28 9907.48

* Appellate Tribunal includes STAT CESTAT & ITAT

** Appellate Authority includes Commissioner Appeals Assistant Commissioner AppealsDeputy Commissioner Appeals Joint Commissioner Appeals and Deputy Commissioner CommercialTaxes Appeals viii. On the basis of verification of records and according to theinformation and explanations given to us the Company has not defaulted in repayment ofdues to Banks/Financial Institutions. The company has not taken any loan from anyGovernment or by way of issue of debentures.

ix. According to the information and explanations given to us and the records of thecompany the company has not raised money by way of initial public offer or further publicoffer during the year. In our opinion the term loans taken during the year have primafacie been applied for the purpose for which they were raised.

x. According to the information and explanations given to us and based on auditprocedures performed and representations obtained from the management we report that nofraud on the Company by its officers or employees or by the company has been noticed orreported during the year under audit.

xi. According to the information and explanations given to us and based on verificationof records the managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V of the CompaniesAct 2013.

xii. The Company is not a Nidhi Company and hence clause (xii) of the order is notapplicable.

xiii. In our opinion and according to the information and explanations given to us andconsidering the approval of the Central

Government in respect of payment of remuneration to relatives of Directors and approvalof the Audit Committee the company has complied with provisions of section 177 and 188 ofCompanies Act 2013 with respect to related party transactions entered in to during theyear under review and the details have been disclosed in the Financial Statements etc. asrequired under Ind AS 24 Related Party Disclosures.

xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and based on verificationof records the company has not entered into any non-cash transactions with directors orpersons connected with him.

xvi. According to the information and explanations given to us the company is notrequired to be registered under section 45-IA of the

Reserve Bank of India Act 1934.

For V. Sankar Aiyar & Co.
Chartered Accountants.
Firm Reg No. 109208W
G. Sankar
Place: Mumbai Partner
Date: 30th May 2017 Membership No. 46050

"ANNEXURE B" REFERRED TO IN THE AUDITOR'S REPORT TO THE MEMBERS OF DCWLIMITED ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2017

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 DCW Limitedas of March 31st 2017 in conjunction with our audit of the standalone financialstatements 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 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". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's 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 auditor's 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 Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

For V. Sankar Aiyar & Co.
Chartered Accountants.
Firm Reg No. 109208W
G. Sankar
Place: Mumbai Partner
Date: 30th May 2017 Membership No. 46050