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DCM Nouvelle Ltd.

BSE: 542729 Sector: Industrials
NSE: DCMNVL ISIN Code: INE08KP01019
BSE 00:00 | 30 Nov 266.35 0.60
(0.23%)
OPEN

272.10

HIGH

276.90

LOW

260.00

NSE 00:00 | 30 Nov 267.80 3.10
(1.17%)
OPEN

265.90

HIGH

277.00

LOW

260.20

OPEN 272.10
PREVIOUS CLOSE 265.75
VOLUME 6526
52-Week high 340.75
52-Week low 27.90
P/E 4.63
Mkt Cap.(Rs cr) 498
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 272.10
CLOSE 265.75
VOLUME 6526
52-Week high 340.75
52-Week low 27.90
P/E 4.63
Mkt Cap.(Rs cr) 498
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

DCM Nouvelle Ltd. (DCMNVL) - Auditors Report

Company auditors report

To the Members of DCM Nouvelle Limited Report on the Audit of the FinancialStatements Opinion

1. We have audited the accompanying financial statements of DCM Nouvelle Limited(‘the Company’) which comprise the Balance Sheet as at 31 March 2021 theStatement 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.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (‘Act’) in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (‘Ind AS’) specified under section 133 of the Actof the state of affairs of the Company as at 31 March 2021 and its profit (includingother comprehensive income) its cash flows and the changes in equity for the year endedon that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI’)together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key audit matter How our audit addressed the key audit matter
Initial Audit Engagement - Opening Balances Our audit work included but was not limited to the following procedures:
We have been appointed as the Statutory Auditors of Company for financial year ended 31 March 2021. • Prepared a detailed transition plan including ensuring compliance with independence requirements prior to the start of the audit;
Standard on Auditing 510 Initial Audit Engagements – Opening Balances in conducting an initial audit engagement several considerations are involved which are generally not associated with recurring audits. The audit transition including the audit of the opening balances requires additional planning activities and considerations necessary to establish an appropriate audit plan and strategy. This includes • Inspected management’s process and control documentation to assist us in obtaining and understanding of the Company’s financial reporting and business processes including control environment.
• Gaining an initial understanding of the Company and its business including its control environment and information systems sufficient to make an audit assessment and develop the audit strategy and plan; • Obtained and read management reports policies instructions as well as planning and governing documents minutes of the board of directors audit committee and other committees of the board internal audit reports.
• Obtaining sufficient appropriate audit evidence regarding the opening balances including the selection and application of accounting policies • Held discussions with management at various levels of the Company and heads of various departments of the Company to understand their roles in the business and company’s financial reporting process;
• Communicating with the predecessor auditors as required and permitted under applicable professional regulations. • Read previous year financial statements to identify material opening balances. Obtained underlying accounting schedules prepared by the management and reviewed unusual items.
The aforesaid activities required involvement of considerable audit efforts and accordingly audit of the opening balances was identified as a key audit matter for the current year audit. • Senior members of the audit team visited the plant and observed the manufacturing process.
• Traced the account balances from the trial balance for the previous financial year to the audited financial statements and traced the balance sheet account balances to the opening trial balance of the current year
• On a sample basis tested the opening balances for certain financial statement line items as considered necessary.
Obtained an understanding of and evaluated appropriateness and consistency of the accounting policies used in prior years in the preparation of the financial statements of the Company for the financial year ended 31 March 2021.
Valuation of Inventories Our audit work included but was not limited to the following procedures:
At the balance sheet date 31 March 2021 the Company holds inventories comprising of raw materials and components finished goods work- in-progress aggregating to 13691.51 lacs as disclosed in note 8 to the accompanying financial statements of the Company. Such inventory is carried at cost or net realisable value whichever is lower as per the accounting policy disclosed in note 2(e). • Evaluated the appropriateness of the Company’s accounting policy and valuation method of inventory in accordance with the applicable accounting standards.
Determination of cost of inventory involves allocation of various production and administration overheads incurred to bring the inventory to its present location and condition which involves management judgement and estimation. • Assessed the design and implementation of controls in respect of the inventory valuation and tested the effectiveness of key inventory controls.
Amongst the other overheads fixed production overheads are allocated to the costs of conversion based on the normal capacity of the production facilities in accordance with the principles of Ind AS -2 Inventories. • Discussed with management the rationale supporting assumptions and estimates used in carrying out the inventory valuation and corroborated the same to our understanding of the business. Tested the computation of various overhead absorption rates by tracing the underlying data to audited historical operational results of the company.
The management’s judgements and assumptions are dependent upon the internal classification and groupings of the classes of inventory for valuation purpose which can be difficult to analyse and be influenced by other economic factors including but not limited to uncertainty surrounding industry’s trends. • Verified the expenses considered as cost of conversion including estimates for apportionment of the conversion on the different classes of finished goods and work in progress and recomputed the arithmetical accuracy thereof for calculating the conversion cost considered as part of the finished goods and work in progress.
Further at the end of each reporting period the management of the Company also assesses whether there is any objective evidence that net realisable value of any item of inventory is below the carrying value. If so such inventories are written down to their net realisable value in accordance with Ind AS 2 Inventories. • Obtained understanding of management process for identification of slow moving non-moving or obsolete inventories and ensured that the same is consistently applied.
Considering the aforesaid complexities involved in significant management judgements and estimates required with respect to valuation of inventory this matter has been determined to be a key audit matter for the current year audit. • Recomputed the net realisable value of the finished goods and reviewed the management assessment for carrying inventory at lower of cost and net realisable value.
• Tested ageing of inventory items obtained through system reports as applicable. Evaluated the appropriateness and adequacy of disclosures made in the financial statements in accordance with the applicable accounting standards.

Information other than the Financial Statements and Auditor’s Report thereon

6. The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the financial statements and our auditor’s report thereon. The Annual Reportis expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon. In connection with our audit ofthe financial statements our responsibility is to read the other information identifiedabove when it becomes available and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

7. The accompanying financial statements have been approved by the Company’s Boardof Directors. The Company’s Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the Ind AS specifiedunder section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

8. In preparing the financial statements management is responsible for assessing theCompany’s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

9. Those Board of Directors is also responsible for overseeing the Company’sfinancial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing 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.

11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism 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 sufficient and 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 in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management’s use of the going concernbasis 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 opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern; and

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation;

12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour 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.

Other Matter

15. The financial statements of the Company for the year ended 31 March 2020 wereaudited by the predecessor auditor BSR & Co. LLP who have expressed an unmodifiedopinion on those financial statements vide their audit report dated 25 June 2020.

Report on Other Legal and Regulatory Requirements

16. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor’s Report) Order 2016 (‘theOrder’) issued by the Central Government of India in terms of section 143(11) of theAct we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4of the Order.

18. Further to our comments in Annexure I as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying financial statements;

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 financial statements dealt with by this report are in agreement with the booksof account;

d) in our opinion the aforesaid financial statements comply with Ind AS specifiedunder section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2021 from being appointed as a director in terms of section 164(2) of the Act;

f) we have also audited the internal financial controls with reference to financialstatements of the Company as on 31 March 2021 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date and our report dated15 May 2021 as per Annexure II expressed unmodified opinion; and

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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in note 39 to the financial statements has disclosed theimpact of pending litigations on its financial position as at 31 March 2021;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2021;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31 March 2021; and

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these financial statements. Hence reporting under this clause is notapplicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm’s Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 21504774AAAADW8932

Place: New Delhi

Date: 15 May 2021

Annexure I to the Independent Auditor’s Report of even date to the members of DCMNouvelle Limited on the financial statements for the year ended 31 March 2021

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:

i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets comprising ‘property plant andequipment’ and ‘capital work-in-progress’.

(b) The Company has a regular program of physical verification of its fixed assetscomprising ‘property plant and equipment’ and ‘capitalwork-in-progress’ under which fixed assets are verified in a phased manner over aperiod of —-3 years which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. In accordance with this program certainfixed assets were verified during the year and no material discrepancies were noticed onsuch verification.

(c) The title deeds of all the immovable properties (which are included under the head‘Property plant and equipment’) are held in the name of the Company. ii) In ouropinion the management has conducted physical verification of inventory at reasonableintervals during the year except for goods-in-transit.

No material discrepancies were noticed on the aforesaid verification. iii) The Companyhas not granted any loan secured or unsecured to companies firms Limited LiabilityPartnerships (LLPs) or other parties covered in the register maintained under Section 189of the Act.

Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Orderare not applicable.

iv) In our opinion the Company has not entered into any transaction covered underSections 185 and 186 of the Act. Accordingly the provisions of clause 3(iv) of the Orderare not applicable.

v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company’s products and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

vii) (a) Undisputed statutory dues including provident fund employees’ stateinsurance income-tax sales-tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues as applicablehave generally been regularly deposited to the appropriate authorities though there hasbeen a slight delay in a few cases. Further no undisputed amounts payable in respectthereof were outstanding at the year-end for a period of more than six months from thedate they became payable.

(b) There are no dues in respect of income-tax sales-tax service tax duty ofcustoms duty of excise and value added tax that have not been deposited with theappropriate authorities on account of any dispute.

viii) The Company has not defaulted in repayment of loans or borrowings to any bankduring the year.

There are no loans or borrowings payable to financial institutions or government and nodues payable to debenture-holders. ix) The Company did not raise moneys by way of initialpublic offer or further public offer (including debt instruments). In our opinion theterm loans were applied for the purposes for which the loans were obtained.

x) No fraud by the Company or on the company by its officers or employees has beennoticed or reported during the period covered by our audit.

xi) Managerial remuneration has been paid and provided by the company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

xii) In our opinion the Company is not a Nidhi Company.

Accordingly provisions of clause 3(xii) of the Order are not applicable.

xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.

xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

xv) In our opinion the Company has not entered into any non-cash transactions with thedirectors or persons connected with them covered under Section 192 of the Act.

xvi) The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm’s Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 21504774AAAADW8932

Place: New Delhi

Date: 15 May 2021

Annexure II to the Independent Auditor’s Report of even date to the members of DCMNouvelle Limited on the financial statements for the year ended 31 March 2021

Annexure II

Independent Auditor’s Report on the internal financial controls with reference tothe financial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (‘the Act’)

1. In conjunction with our audit of the financial statements of DCM Nouvelle Limited(‘the Company’) as at and for the year ended 31 March 2021 we have audited theinternal financial controls with reference to financial statements of the Company as atthat date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company’s Board of Directors is responsible for establishing andmaintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting ("the Guidance Note") issued by theInstitute of Chartered Accountants of India ("ICAI"). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of theCompany’s business including adherence to the 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 Act.

Auditor’s Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by the ICAI prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to financial statements and the Guidance Note issued by the ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols 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 judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

5. 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 controlswith reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A company’s internal financial controls with reference to financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internalfinancial controls with reference to financial statements include those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls with reference to financial statements and such controls were operatingeffectively as at 31 March 2021 based on the internal financial controls with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm’s Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 21504774AAAADW8932

Place: New Delhi

Date: 15 May 2021

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