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Dilip Buildcon Ltd.

BSE: 540047 Sector: Infrastructure
NSE: DBL ISIN Code: INE917M01012
BSE 00:00 | 27 Jan 419.50 7.65
(1.86%)
OPEN

409.00

HIGH

426.70

LOW

406.40

NSE 00:00 | 27 Jan 418.90 6.80
(1.65%)
OPEN

409.00

HIGH

426.70

LOW

406.00

OPEN 409.00
PREVIOUS CLOSE 411.85
VOLUME 4142
52-Week high 437.20
52-Week low 193.40
P/E 18.10
Mkt Cap.(Rs cr) 5,738
Buy Price 422.55
Buy Qty 372.00
Sell Price 427.00
Sell Qty 5.00
OPEN 409.00
CLOSE 411.85
VOLUME 4142
52-Week high 437.20
52-Week low 193.40
P/E 18.10
Mkt Cap.(Rs cr) 5,738
Buy Price 422.55
Buy Qty 372.00
Sell Price 427.00
Sell Qty 5.00

Dilip Buildcon Ltd. (DBL) - Auditors Report

Company auditors report

To the Members of Dilip Buildcon Limited

Report on the Audit of Standalone Ind AS Financial Statements

1. Opinion

We have audited the accompanying standalone financial statements of Dilip BuildconLimited ("the Company") which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as 'standalone financial statements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ('the Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingthe Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended of the state of affairsof the Company as at March 31 2019 its profits total comprehensive income changes inequity and its cash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing as prescribed under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone 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 together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

3 Key audit matters

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 standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Auditors Response
1 Revenue recognition and accounting for Construction contracts
Significant accounting judgements including estimation of costs to complete determining the stage of completion and the timing of revenue recognition. We performed the following audit procedures:
For majority of its contracts the Company recognizes revenue and profit on the stage of completion based on the proportion of contract costs incurred for the work performed to the balance sheet date relative to the estimated costs on the contract at completion. The recognition of revenue and profit / loss therefore are based on estimates in relation to the estimated total costs of each contract. Testing the design and implementation of internal controls including control over process for determining estimates used as evaluating whether they are operating effectively.
At each reporting date revenue is accrued for costs incurred against work performed in accordance with the contract for which invoice may not have been raised. Identification that such accrual will result into work that would be billable and recoverable when the work has not been acknowledged by the customer involves significant amount of judgement. Testing related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
Revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognized when the recovery of such consideration is highly probable. The nature of these judgements results in being subject to management override. Testing different sample of contracts for identification of performance obligations.
Reviewed the Company's process of collecting information supporting the basis for accrual of costs against work performed upto the cut off dates. Reviewed the design and operating effectiveness of management's key controls in collecting such data with respect of costs.
Tested the cut-offs for revenue recognized against such un-invoiced amounts and reviewed the process of such recognition.
Review for change of scope and impact of the same on estimated costs to complete the contracts
Perform analytical procedures for reasonableness of revenues disclosed by type of contracts.
2 Assessment of receivables (including unbilled receivables)
Risk of material misstatement related to estimation of expected credit loss as a result of lack of precision in their measurement. The estimates depend on number of factors such as ageing credit risks and the ability of the parties to make payment. We performed the following audit procedures:
Assessed the company basis for determining the model internal controls based on which the Company determines the basis of provisioning compliance with and consistently applying the accounting policies
Verification of subsequent receipts and post balance sheet events if any.

4. Other Information (Information other the standalone financial statements andAuditor's report thereon)

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisDirectors Report Business Responsibility Report Corporate Governance and ShareholdersInformation but does not include the standalone financial statements and our auditor'sreport thereon. The Annual report is expected to be made available to us after the date ofthis 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 other information included in the above reports if we conclude thatthere is material misstatement therein we are required to communicate the matter to thosecharged with governance and determine the actions under the applicable laws andregulations.

5. Responsibility of Management and those charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone 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 ASaccounting Standards specified under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial 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 standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

6. Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards 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 standalone financial statements.

As part of an audit in accordance with Standards on auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

i) Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

ii) Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

iii) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

iv) Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify 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 the Companyto cease to continue as a going concern.

v) Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors 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.

7. Report on Other Legal and Regulatory Requirements

i) As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

ii) As required by section 143 (3) of the Act based on our audit 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 purpose 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 Statement of Profit and Loss (including other comprehensiveincome) the statement of changes in equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2015 as amended.

e) On the basis of written representations received from the directors of the Companyas on March 31 2019 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2019 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" to this report.

g) With respect to the other matters to be included in the Auditors Report inaccordance with the requirements of Section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid / provided by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

h) 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 financial statements to the extent determinable/ ascertainable.- Refer Note 25 to the standalone financial statements.

ii. The Company does not have any long-term contracts including derivative contractsfor which there are any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312019.

For Mukund M. Chitale & Co. For MSG & Associates.
Chartered Accountants Chartered Accountants
Firm Registration No. 106655W Firm Registration No. 010254C
(S.M. Chitale) (Geeta Rajani)
Partner Partner
M. No. 111383 M. No. 076889
Place: Bhopal Place: Bhopal
Date: 10.05.2019 Date: 10.05.2019

Annexure ‘A' to the Auditors' Report

Statement on the matters specified in paragraphs 3 and 4 of Companies (Auditor'sReport) Order 2016

(Referred to in paragraph 7 (i) of our Audit Report of even date)

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situations of fixed assets except for certain items of plant andmachinery and vehicles for which location of said assets were under process of beingcompiled/ updated.

b) According to information and explanations given to us fixed assets of the Companyare being physically verified according to a phased programme of verification so as toverify all assets within a period of three years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its fixed assets. As informedduring the year no material discrepancies to the extent reconciled with the recordsavailable in this respect were noticed on such verifications

c) According to the information and explanations given to us the title deeds ofimmovable properties are in the name of the Company except the following wherein theCompany is in the process of updating the documents in the name of the Company.

Particulars Gross Value Net Value
(Amt. in Lakhs) (Amt. in Lakhs)
Land 22.61 22.61

ii) a) As per information and explanations given to

us the inventory has been physically verified by the management at intervals as definedby the management. In our opinion the frequency of verification needs to be furtherimproved having regard to the size of the Company and nature of its business. As informedto us the discrepancies noticed on verification to the extent reconciled with the recordsavailable in this respect between the physical stocks and the book records were notmaterial and have been appropriately dealt with.

iii) According to the information and explanations provided to us the Company hasgiven interest free unsecured loans to twenty-four subsidiaries and interest-bearing loansto two subsidiaries covered in the Register maintained under Section 189 of the CompaniesAct in accordance with the relevant provisions of the Companies act.

a) According to the information and explanations given to us and based on our auditprocedures conducted by us we are of the opinion that terms and conditions on which theunsecured loans have been granted to the subsidiary companies listed in the registermaintained under Section 189 of the Act are not prima facie prejudicial to the interestof the Company.

b) According to the information and explanations given to us interest free unsecuredloans given to twenty- four subsidiaries are repayable on demand. In respect of twosubsidiary companies where Company has charged interest there is no stipulation ofschedule for payment of principal interest is repaid as per specified repayment terms.The Borrowers have been regular in payment of principal and interest if any as demanded.

c) According to the information and explanations given to us since the repaymentschedule for such loans is not stipulated no loan is overdue and outstanding for morethan ninety days.

iv) In our opinion and according to the information and explanations provided to usthe Company has complied with the provisions of Section 185 and 186 of the Companies Actwith respect to unsecured loans granted Investments made and guarantees given.

v) According to the information and explanations given to us the Company has notaccepted any deposits during the year from public within the meaning of the directivesissued by Reserve Bank of India and the provisions of sections 73 to 76 or any otherrelevant provisions of the Companies Act 2013 and rules framed thereunder and thus theprovisions of Clause 3(v) of the Order are not applicable.

vi) The Company is required to maintain cost records as prescribed by the CentralGovernment under section 148(1) of the Companies Act 2013. We have broadly reviewed thecost records maintained by the Company pursuant to the rules made by the CentralGovernment for the maintenance of the cost records under section 148(1) of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed records have beenmaintained. We have however not made a detailed examination of the said records.

vii) a) According to the information and explanations given to us the Company isgenerally regular in depositing with appropriate authorities undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxCustom Duty Excise Duty Value Added Tax Cess except for Provident Fund and Tax deductedat source wherein certain delays in payments were observed during the year ended31.03.2019. There were no undisputed amounts of statutory dues including Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Custom Duty Excise DutyValue Added Tax Cess which were due for more than six months from the date they becomepayable as at the year end.

b) According to the records examined by us and as per the information and explanationsgiven to us the particulars of statutory dues as at March 31 2019 which have not beendeposited on account of disputes and the forum where the dispute is pending is as under:

Name of the Statute Nature of Dues Disputed Amount Period to which it pertains Forum where pending
Income Tax Act 1961 Demand u/s 154 Rs. 4437.30/- lakhs F.Y. 2015-16 CIT(Appeals)

viii) According to the information and explanations given to us the Company has notdefaulted in repayment of dues of loans taken from banks and financial institutions. TheCompany has not borrowed any amount from Debenture holders during the year.

ix) According to the information and explanations given to us the Company has notraised money by way of initial public offer of equity shares during the year. The Companyhas used the money raised by term loans during the year for the purpose for which theywere raised.

x) According to the information and explanations given to us no material fraud on theCompany by its officers or employees has been noticed and reported during the year norhave we been informed of such case by the management.

xi) According to the information and explanations given to us and based on ourexamination of the records the Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V of the Companies Act 2013

xii) In our opinion and according to the information and explanation given to us theCompany is not a nidhi Company. Accordingly provision of clause 3 (xii) of the order isnot applicable.

xiii) According to the information and explanation given to us and based on ourverification of the records of the Company and on the basis of review and approvals by theBoard of Directors and Audit Committee the transactions with the related parties are incompliance with Section 177 and 188 of the Act where applicable and the details have beendisclosed in the standalone financial statements as required by applicable accountingstandard.

xiv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year therefore provisions of Clause 3(xiv) are not applicable.

xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or person connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable.

xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder Section 45 IA of the Reserve Bank of India At 1934. Accordingly provisions ofClause 3 (xvi) of the Order are not applicable to the Company.

For Mukund M. Chitale & Co. For MSG & Associates.
Chartered Accountants Chartered Accountants
Firm Registration No. 106655W Firm Registration No. 010254C
(S.M. Chitale) (Geeta Rajani)
Partner Partner
M. No. 111383 M. No. 076889
Place: Bhopal Place: Bhopal
Date: 10.05.2019 Date: 10.05.2019

Annexure ‘B' to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013

(Referred to in paragraph 7 (ii) (f) of our Audit Report of even date)

1. We have audited the internal financial controls over financial reporting of DilipBuildcon Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

2. 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" (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

3. 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 deemed tobe prescribed under Section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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

4 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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls over

Financial Reporting

5 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.

Opinion

6 In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2019 based on the internalcontrol over financial reporting 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 Mukund M. Chitale & Co. For MSG & Associates.
Chartered Accountants Chartered Accountants
Firm Registration No. 106655W Firm Registration No. 010254C
(S.M. Chitale) (Geeta Rajani)
Partner Partner
M. No. 111383 M. No. 076889
Place: Bhopal Place: Bhopal
Date: 10.05.2019 Date: 10.05.2019

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