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Delta Corp Ltd.

BSE: 532848 Sector: Others
NSE: DELTACORP ISIN Code: INE124G01033
BSE 15:02 | 17 Jun 178.05 -2.30
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NSE 14:54 | 17 Jun 177.80 -2.50
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OPEN 179.10
PREVIOUS CLOSE 180.35
VOLUME 302263
52-Week high 201.95
52-Week low 83.40
P/E 129.96
Mkt Cap.(Rs cr) 4,750
Buy Price 177.85
Buy Qty 1.00
Sell Price 178.05
Sell Qty 151.00
OPEN 179.10
CLOSE 180.35
VOLUME 302263
52-Week high 201.95
52-Week low 83.40
P/E 129.96
Mkt Cap.(Rs cr) 4,750
Buy Price 177.85
Buy Qty 1.00
Sell Price 178.05
Sell Qty 151.00

Delta Corp Ltd. (DELTACORP) - Auditors Report

Company auditors report

To the Members of

Delta Corp Limited

Report on the Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying standalone financial statements of DeltaCorp Limited (‘the Company') which comprise the Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the 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 standalone financial statements give the information requiredby the Companies 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 Act of thestate of affairs of the Company as at 31st March 2020 and its profit(including other comprehensive income) its cash flows and the changes in equity for theyear ended on 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') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Emphasis of Matter – COVID-19 Impact

4. We draw attention to Note 49 to the accompanying standalone audited financialstatements with regard to the management's evaluation of uncertainty due to the outbreakof COVID-19 and its impact on the future performance operations of the Company. Ouropinion is not modified in respect of this matter.

Key Audit Matter

5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone 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.

6. 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
1) Recoverability of the carrying value of investment in Our audit procedures included but were not limited to the following:
Subsidiary
(refer note 3 of the standalone financial statements) • Obtained an understanding of management's processes and controls for determining the fair valuation of investments.
The Company has investment in Daman Hospitality Private Limited (Subsidiary) carried at cost in accordance with Ind AS 27 Separate Financial Statements. Considering the existence of impairment indicator in the current year the Company assessed the recoverable amount of the investments by comparing the fair value (less costs of disposal) and carrying amount of the investments as on the reporting date.
• Evaluated the design and tested the operating effectiveness of key controls implemented by the management around fair valuation of investments including for cash flow projections use of estimates involved and review of valuation performed.
The recoverability of the investments in subsidiary was assessed by the management using discounted cash flow model with the assistance of a management appointed valuation specialist. The valuation method involves significant estimates made by the management including discount rate and business and cash flow projections during explicit period of five years based on revenue growth rates projected operating margins and terminal growth rate at the end of five years. The management also considered the impact of lockdown in India due to COVID-19 in preparing the projections. • Tested the accuracy of the input data provided by the management to the valuation specialist by reconciling the projected cash flows to approved business plans.
• Tested the reasonableness of key assumptions including revenue and profit growth or decline discounting rate operating margins including comparison of assumptions with industry and economic forecasts and potential impact of COVID-19.
Accordingly considering the materiality of the carrying amounts complexity and significance of judgement involved impairment assessment of aforesaid investments has been considered to be a key audit matter for current year's audit. • Involved auditor's valuation specialist to validate the valuation assumptions and methodology considered by the management while computing recoverable amount and perform sensitivity analysis on the key assumptions mentioned above.
• Evaluated the appropriateness of disclosures made in the financial statement in relation to such investments and their fair valuation as required by applicable accounting standards.
2) Revenue recognition Our audit procedures included but were not limited to the following:
(Refer note 1(i) for the accounting policy on revenue recognition and note 25 of the standalone financial statement for revenue recognised during the year and note 52 for disaggregate revenue information under Ind AS 115) • Obtained and updated our understanding of the revenue business process.
The Company has recognised ` 452.64 Crores as revenue from physical casinos and hospitality business which requires processing of a large number of transactions each day. Further a high number of sale transactions in hospitality and casino business get settled in cash which requires the auditor to put significant additional effort and procedures to obtain comfort on those transactions. • Evaluated the design and tested the operating effectiveness of key controls over the recognition and measurement of revenue. For hospitality business - Involved our information technology specialists to test information technology related general controls and information technology application controls relevant for revenue recognition.
• Conducted cash counts at the year end as well as during the quarterly reviews.
Standards on Auditing prescribe a presumed risk of fraud in revenue recognition that revenue may be misstated through improper recognition. Given this inherent risk we identified the occurrence of revenue as a significant risk of material misstatement. • For samples selected during the year and samples selected from the period before and after year end tested supporting documents for revenue recognition including tracing of customers' cash deposits to bank statements.
Considering the amounts involved large number of transactions and significant management judgement involved revenue recognition was considered as a key audit matter for the current year audit. • Tested on a sample basis the appropriateness of journal entries impacting revenue as well as other adjustments made in the preparation of the financial statements with respect to revenue recognition including specific journals posted manually directly to revenue.
• Evaluated the appropriateness of disclosures made in the financial statements with respect to revenue recognised during the year as required by applicable accounting standards.

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

7. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon. The Annual Report isexpected to be made available to us after the date of this auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially 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 StandaloneFinancial Statements

8. The accompanying standalone financial statements have been approved by the Company'sBoard of 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 standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

9. 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.

10. Those Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

11. 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 a highlevel 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.

12. 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 concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern;

• 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.

13. 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.

14. 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.

15. 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 the matteror 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

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 (‘the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

18. Further to our comments in Annexure A 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 standalone 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 standalone financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under 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 31stMarch 2020 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 31st March 2020 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date andour report dated 18th May 2020 as per Annexure B 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 32 (i) (a) to the standalone financial statementshas disclosed the impact of pending litigations on its financial position as at 31stMarch 2020.

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31st March 2020; iii.there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31stMarch 2020;

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8th November 2016 to 30thDecember 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Khushroo B. Panthaky
Partner
Membership No.: 042423
UDIN: 20042423AAAACL3585
Place: Mumbai
Date: 18th May 2020

Annexure - A

To the Independent Auditor's Report of even date to the members of Delta Corp Limitedon the standalone financial statements for the year ended 31st March 2020

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.

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the fixed assets is reasonable having regard to the size ofthe Company and the nature of its assets.

(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 our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion the Company has complied with the provisions of Sections 185 ofthe Act. Further the Company is exempt from Section 186 accordingly the provisions ofclause 3(iv) of the Order relating to Section 186 is 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) The Central Government has not specified maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products/ services.Accordingly the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax cess goods and service tax and other material statutory dues as applicablehave generally been regularly deposited to the appropriate authorities though there hasbeen 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) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:

Statement of Disputed Dues

Name of the statute Nature of dues Amount (` in Crores) Amount paid under Protest (` in Crores) Period to which the amount relates Forum where dispute is pending
Income Tax Act1961 Income Tax 1.46 Nil AY 2007-08 CIT Appeals
Income Tax Act1961 Income Tax 1.05 0.35 AY 2014-15 CIT Appeals
Goa Value - Added Value Added 0.10 Nil FY 2012-13 Commissioner of
Tax Act 2005 Tax Commercial Taxes GOA
Custom Act 1962 Custom duty 18.45 7.17 (Additional bond of ` 35.81) FY 2010-11 CESTAT Bangalore

(viii) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government during the year. The Company did not have anyoutstanding debentures during the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments) and did not have any term loans outstanding during theyear. Accordingly the provisions of clause 3(ix) of the Order are not applicable.

(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 ofclause 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 withthe directors 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
Khushroo B. Panthaky
Partner
Membership No.: 042423
UDIN: 20042423AAAACL3585
Place: Mumbai
Date: 18th May 2020

Annexure - B

Independent Auditor's Report on the internal financial controls with reference to thestandalone financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of Delta CorpLimited (‘the Company') as at and for the year ended 31st March 2020 wehave audited the internal financial controls with reference to financial statements of theCompany as at that date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable 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 Institute of CharteredAccountants of India (‘ICAI') prescribed under Section 143(10) of the Act to theextent applicable to an audit of internal financial controls with reference to financialstatements and the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (‘the Guidance Note') 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 withreference to financial statements were established and maintained and if such controlsoperated 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 of therisks of material misstatement of the financial statements whether due to fraud or error.

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 controls withreference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A company's internal financial controls with reference to financial statements is aprocess 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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial 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 company's assets that could have a material effect on the financialstatements.

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 31st March 2020 based on the internal financial controlswith reference 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 issued by the Institute of CharteredAccountants of India.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm's Registration No.: 001076N/N500013
Khushroo B. Panthaky
Partner
Membership No.: 042423
UDIN: 20042423AAAACL3585
Place: Mumbai
Date: 18th May 2020