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Damodar Industries Ltd.

BSE: 521220 Sector: Industrials
NSE: DAMODARIND ISIN Code: INE497D01022
BSE 00:00 | 27 Feb 26.80 -0.50
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NSE 00:00 | 27 Feb 26.30 -0.65
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OPEN 28.20
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VOLUME 1137
52-Week high 48.00
52-Week low 21.30
P/E
Mkt Cap.(Rs cr) 60
Buy Price 26.80
Buy Qty 95.00
Sell Price 26.90
Sell Qty 84.00
OPEN 28.20
CLOSE 27.30
VOLUME 1137
52-Week high 48.00
52-Week low 21.30
P/E
Mkt Cap.(Rs cr) 60
Buy Price 26.80
Buy Qty 95.00
Sell Price 26.90
Sell Qty 84.00

Damodar Industries Ltd. (DAMODARIND) - Auditors Report

Company auditors report

To the Members of M/s. DAMODAR INDUSTRIES LIMITED Report on theFinancial Statements Opinion

We have audited accompanying financial statements of Damodar IndustriesLimited (“the Company”) which comprise of the balance sheet as at March 312019 the statement of Profit and Loss (Including Other Comprehensive Income) statementof changes in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby The Companies Act 2013 (“The Act”) in the manner so required and give a trueand fair view in conformity with the Indian accounting standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended (“Ind As”) and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Companies Act2013. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independentrequirement that are relevant to our audit of the financial statements under theprovisions of the Act and the rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters below to be key audit matters to becommunicated in our report.

Sr. Key Audit Matter How the matter was addressed in our audit
1 Capital Expenditure at new Spinning Unit. Our audit procedures included the following:
the Company As disclosed in note 2 to the financial has incurred significant amount for the installation of new spinning unit during the year for the enhancement of its production capacity. We focused on capital expenditure incurred during the year as this represents significant transaction for the year and involves certain judgmental areas such as capitalization of eligible components of cost as per applicable financial reporting standards therefore we have identified this area as key audit matter. We obtained an understanding of Company's process with respect to capital expenditure and tested controls relevant to such process. We performed substantive audit procedures through inspection of related documents and supporting in relation to the capitalized cost. We obtained the inspection reports of plant and machinery contracts with building contractors and certificate of completion to ascertain that the expenditure and related borrowing cost capitalized meet the eligibility criteria for capitalization as per the requirements of applicable accounting standards.

2 Long term financing for New Spinning unit Our audit proceduresincluded the following:

As disclosed in note 18 to the financialstatements the Company We haveobtained the minutes of the Board of Directors meeting has obtained additional net longterm financing of Rs. 12875.98 to check the management's process regarding theapproval Lacs to finance the capital expenditure. The Company's key for seeking longterm financing. We obtained the financing operating /performance indicators aresignificantly influencedagreements executed during the year related repayments by theadditions to the long term financing. Further financing schedules and reviewed the termsto test related controls. We arrangements include covenants that the Company is subject tochecked outstanding balance at the year end with confirmations. compliance. Thesignificant additions to the long term financing We checked utilization of funds as perterms. We also reviewed portfolio during the year along with the sensitivity of the thematurity analysisoffinancingtoascertaintheclassification compliance requirements areconsidered as a key audit matters of finance based on remaining maturities. We furtherassessed that the related disclosures provided in financial statements are adequate inaccordance with applicable accounting standards.

Information other than financial statements and Auditors report thereon

The company's Board of Directors are responsible for thepreparation of the other information. The other information comprises of the informationincluded in the management discussion and analysis Boards report including Annexure toBoards Report Corporate

Governance and Shareholders information but does not include thefinancial statements and our auditors report thereon. Our opinion on financial statementsdoes not cover the other information and we do not express any form of assurance orconclusion thereon. In connection with our audit of the financial statement ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statement or otherinformation obtained during the course of our audit or otherwise appear to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and those charged with governance forthe Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 (“the Act”) withperformance total respecttothepreparation of these financialstatementsthatgive financialpositionfinancial trueandfairviewofthe comprehensive income changes in equity and cash flowsof the Company in accordance with the accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the financial statementsmanagement is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. The Board of Directorsare responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancialstatements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficientand appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the transactions and eventsin financial a manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit significant deficiencies ininternal control that we identify during our audit.and

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016(“the Order”) issued by the Central Government of India in terms of subsection(11) of section 143 of the Companies Act 2013 we give in the Annexure A a statement onthe matters specified in paragraphs 3 and

4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of our audit

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including othercomprehensive income the statement of change in equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on March 31 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating of such controls refer to ourseparate Report in “Annexure B”.

g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements.

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.

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

For Jitendra Mishra & Company
Chartered Accountants
Firm's registration number: 125334W
Jitendra Mishra
Proprietor
Membership number: 116676
Place : Mumbai
Date : May 25 2019

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in paragraph 1 under Report on other Legaland Regulatory Requirements in the Independent Auditor's Report of even date to themembers of Damodar Industries Limited (the company) on the financial statements for theyear ended March 31 2019 we report that:

i. In respect of its Fixed Assets:

(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.

(b) The Fixed Assets were physically verified during the year by themanagement in according with a regular programme of verification which in our opinionprovides for physical verification of major portion of fixed assets at reasonableintervals. According to the information and explanation given to us and no materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of examination of the records of the company the title deeds of immovableproperties are held in the name of the company

ii. In respect of its inventories:

(a) As explained to us the inventories were physically verified by themanagement at regular intervals during the year. In respect of inventory lying with thirdparties these have substantially been confirmed by them.

(b) The discrepancies noticed on verification between the physicalstocks and book records were not material .

iii. The company has not granted any loans secured or unsecured to thecompanies firms Limited liability covered in the register maintained under section 189of the companies Act 2013. Accordingly provisions of paragraph 3 (iii) of the Companies(Auditor Report) ordered 2016 were not applicable to the Company.

iv. The Company has not made investments and granted any loans orprovided any guarantees or security to the parties covered under section 185 and 186 ofthe Companies Act 2013. Accordingly provisions of paragraph 3 (iv) of the Companies(Auditor Report) order

2016 were not applicable to the Company

v. In our opinion and according to the information and explanationsgiven to us the company has complied with the provisions of sections 73 to 76 and otherrelevant provisions of the Companies Act 2013 and the rules framed thereunder with regardto the deposits accepted from the public. As per information given to us no order underthe aforesaid sections has been passed by the company Law Board or National Company LawBoard or Reserve Bank of India or any court or any other tribunal on the company.

vi. We have broadly reviewed the cost records maintained by the Companypursuant to the rules prescribed by the Central Government under sub section 1 of section148 of the Companies Act2013 and are of the opinion that prime facie the prescribedaccounts and cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

vii. In respect of statutory dues:

(a) According to information and explanations given to us and on thebasis of our examination of the records of the company has been regular in depositingundisputed statutory dues including Provided Fund investor education and production fundemployer state insurance Income-Tax Sales tax Service Tax Duty of Customs Duty ofExcise Value added Tax cess and other material statutory dues with the appropriateauthorities . According to the information and explanations given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at March 31 2019 fora period of more than six months from the date of becoming payable.

b) According to the information and explanations given to me there areno dues in respect of Wealth-Tax Excise Duty Service Tax or Cess outstanding on accountof any dispute. The details of dues which have not been deposited on account of disputeare given below:

Sr. Name of the Statute Nature Amount (रin Lacs) Period to which the amount relates Forum where disputes pending
1. DEPB Entitlement Refund Custom 81.18 F.Y. 2010- 11 DGFT
2. Income Tax Income Tax 5.58 16.99 F.Y. 2009-10 F.Y. 2010-11 Income Tax Department
3. Income Tax TDS with Interest Tax 2.97 F.Y. 2017-18 & Prior years Income Tax Department

viii. In our opinion and according to the information and explanationsgiven to us the company has not defaulted in repayment of dues to any financialinstitutions and bank as at the Balance sheet date.

ix. In our opinion and according to the information and explanationsgiven to us during the year the company did not raised any money by way of initial publicoffer or further public offer (including debt instruments) and the term loans availedduring the year have been applied for the purpose for which they were raised.

x. According to the information and explanations given to us nomaterial fraud by the company or on the company by its officers or employees has beennoticed or reported during the course of audit.

xi. According to the information and explanations given to us andbased on our examination of records of the company the company has paid/ provided formanagerial remuneration in accordance with requisite approvals mandated by the provisionof Section 197 read with Schedule V of the Companies Act.

xii In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company accordingly paragraph 3(xii) of the Orderis not applicable.

xiii According to the information and explanations given to us andbased on our examination of records of the company transaction with the related partiesare in compliance with Section 177 & 188 of the Act where applicable and details ofsuch transaction have been disclosed in the financial statements as required by theapplicable accounting standards.

xiv According to the information and explanations given to us andbased on our examination of records of the company the company has not made anypreferential allotment or private placement of shares of fully or partly convertibledebentures during the year.

xv According to the information and explanations given to us and basedon our examination of 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 According to the information and explanations given to us thecompany is not required to be registered under section 45 1A of the

Reserve Bank of India Act 1934. Accordingly paragraph 3(xvi) of theOrder is not applicable.

For Jitendra Mishra & Company
Chartered Accountants
Firm's registration number: 125334W
Jitendra Mishra
Proprietor
Membership number: 116676
Place : Mumbai
Date : May 25 2019

Annexure B To The Independent Auditors' Report

The annexure referred to in paragraph 2 (f) under ‘Report on OtherLegal and Regulatory Requirements' of our report of even date to the members ofDamodar Industries Limited on the financial statements for the year ended March 31 2019.

Report on the Internal Financial controls under clause (i) ofsub-section 3 of section143 of the companies Act 2013 (“the Act”)

We have audited the internal financial controls over financialreporting of Damodar Industries Limited (“the Company”) as of March 31 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the “Guidance Note”) and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficientandappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2019 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance

Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For Jitendra Mishra & Company
Chartered Accountants
Firm's registration number: 125334W
Jitendra Mishra
Proprietor
Membership number: 116676
Place : Mumbai
Date : May 25 2019