To the Members of Dilip Buildcon Limited
Report on the Audit of Standalone Ind AS Financial Statements
We have audited the accompanying standalone financial statements ofDilip Buildcon Limited ("the Company") which comprise the Balance Sheet as at31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as standalone financial statements').
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the Act') in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended of the state of affairs of the Company as at March 31 2021 its profitstotal comprehensive income changes in equity and its cash flows for the year ended onthat date.
2. Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing as prescribed under Section 143(10) of the Act.
Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone 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 together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe 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.
3. Emphasis of Matter
We draw your attention to Note 45 of the standalone financialstatements as regards the management's assessment of the financial impact due torestrictions and conditions related to Covid-19 pandemic situation. Our opinion is notmodified in respect of this matter.
4. Key audit matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate 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 in 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 -'or 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 -'or 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 -'or 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. |
|3 Physical Inventory verification at year end || |
|Risk of material misstatement due to not able to physically observe the stock count carried out by the management at year end. ||We performed the following audit procedures: |
|As a result of restrictions and lockdown situation due to Covld-19 management was able to perform year end physical verification of inventory at certain locations subsequent to the yea rend. ||We are not able to physically observe the verification of inventory that was carried out by the management |
| ||We have relied on the reports shared by the management for the locations where the physical inventory verification was conducted. |
| ||Consequently we have performed alternative procedures (which include the reports of cyclical counts performed by the management during the year roll forward procedures checking the documentation with respect to purchase consumption and sale of inventory if any) to audit the existence of Inventory as per the guidance provided in SA- 501 Audit Evidence Specific Consideration for Selected Items' and have obtained sufficient audit evidence. |
| ||We have also performed analytical procedures for reasonableness of the value of stock at year end. |
5. Other Information (Information other the standalone financialstatements and Auditor's report thereon)
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Directors Report Business Responsibility Report CorporateGovernance and Shareholders Information but does not include the standalone financialstatements and our auditor's report thereon. The Annual report is expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover theother information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
When we read the other information included in the above reports if weconclude that there is material misstatement therein we are required to communicate thematter to those charged with governance and determine the actions under the applicablelaws and regulations.
6. Responsibility of Management and those charged withGovernance for the Standalone Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS accounting Standards specified under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 ofDirectors 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 the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
7. Auditor's Responsibilities for the Audit of theStandalone Financial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with Standards on auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesestandalone financial statements.
As part of an audit in accordance with Standards on auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
i) Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
ii) Obtain an understanding of internal financial controls relevant tothe audit in order to design audit procedures that are appropriate in the circumstances.Under section 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
iii) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
iv) Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the ability of the Company to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
v) Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirementsregardingindependenceandtocommunicatewith them all relationships and other matters that may reasonably be thought to bear onour 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 standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
8. 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 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.
ii) As required by section 143 (3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of 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 beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting
Standards specified under section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2015 as amended.
e) On the basis of written representations received from the directorsof the Company as on March 31 2021 taken on record by the Board of Directors none ofthe directors is disqualified as on March 31 2021 from being appointed as a director interms of 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 effectiveness of such controls referto our separate Report in "Annexure B" to this report.
g) With respect to the other matters to be included in the AuditorsReport in accordance with the requirements of Section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration 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 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 standalone financial statements to the extentdeterminable/ascertainable. Refer Note 25 to the standalone financial statements.
ii. The Company does not have any long-term contracts includingderivative contracts for which there are any material foreseeable losses.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended March 31 2021.
Annexure A' to the Auditors' Report
Statement on the matters specified in paragraphs 3 and 4 of Companies(Auditor's Report) Order 2016
(Referred to in paragraph 8 (i) of our Audit Report of even date)
i) a) The Company has maintained proper records showing fullparticulars including quantitative details and situations of fixed assets.
b) According to information and explanations given to us fixed assetsof the Company are being physically verified according to a phased programme ofverification so as to verify all assets within a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsfixed assets. As informed during the year no material discrepancies to the extentreconciled with the records available in this respect were noticed on such verifications
c) According to the information and explanations given to us the titledeeds of immovable properties are in the name of the Company except the following whereinthe Company is in the process of updating the documents in the name of the Company.
|Particulars ||Gross Value ||Net Value |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Land ||22.61 ||22.61 |
ii) a) As per information and explanations given to us the inventoryhas been physically verified by the management subsequent to the year at few locations dueto restrictions imposed amid outbreak of Covid-19. In our opinion the frequency ofverification needs to be further improved having regard to the size of the Company andnature of its business. As informed to us the discrepancies noticed on verification tothe extent reconciled with the records available in this respect between the physicalstocks and the book records were not material and have been appropriately dealt with.
iii) According to the information and explanations provided to us theCompany has given interest free unsecured loans to thirty-one subsidiaries andinterest-bearing loans to three subsidiaries covered in the Register maintained underSection 189 of the Companies Act in accordance with the relevant provisions of theCompanies act.
a) According to the information and explanations given to us and basedon our audit procedures conducted by us we are of the opinion that terms and conditionson which the unsecured loans have been granted to the subsidiary companies listed in theregister maintained under Section 189 of the Act are not prima facie prejudicial to theinterest of the Company
b) According to the information and explanations given to us interestfree unsecured loans given to thirty-one subsidiaries are repayable on demand. In respectof three subsidiary companies where Company has charged interest there is no stipulationof schedule 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 therepayment schedule for such loans is not stipulated no loan is overdue and outstandingfor more than ninety days.
iv) In our opinion and according to the information and explanationsprovided to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act with respect to unsecured loans granted Investments made and guaranteesgiven.
v) According to the information and explanations given to us theCompany has not accepted any deposits during the year from public within the meaning ofthe directives issued by Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act 2013 and rules framed thereunder andthus the provisions of Clause 3(v) of the Order are not applicable.
vi) The Company is required to maintain cost records as prescribed bythe Central Government under section 148(1) of the Companies Act 2013. We have broadlyreviewed the cost records maintained by the Company pursuant to the rules made by theCentral Government for the maintenance of the cost records under section 148(1) of theCompanies Act 2013 and are of the opinion that prima facie the prescribed records havebeen maintained. We have however not made a detailed examination of the said records.
vii) a) According to the information and explanations given to us theCompany is generally regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income TaxSales Tax Service Tax Custom Duty Excise Duty Value Added Tax Cess except for Taxdeducted at source wherein certain delays in payments were observed during the year endedMarch 31 2021. There were no undisputed amounts of statutory dues including ProvidentFund Employees' State Insurance Income Tax Sales Tax Service Tax Custom DutyExcise Duty Value Added Tax Cess which were due for more than six months from the datethey become payable as at the year end.
b) According to the records examined by us and as per the informationand explanations given to us the particulars of statutory dues as at March 31 2021 whichhave not been deposited on account of disputes and the forum where the dispute is pendingis as under:
|Name of the Statute ||Nature of Dues ||Disputed Amount ||Period to which it pertains ||Forum where pending |
|Income Tax Act 1961 ||Penalty u/s 271 (1)(c) ||Rs. 1466.90 lakhs ||F.Y 2013-14 ||CIT (Appeals) |
viii) According to the information and explanations given to us theCompany has not defaulted in repayment of dues of loans taken from banks financialinstitutions and debenture holders.
ix) According to the information and explanations given to us theCompany has not raised money by way of initial public offer of equity shares during theyear. The Company has used the money raised by term loans during the year for the purposefor which they were raised.
x) According to the information and explanations given to us nomaterial fraud on the Company by its officers or employees has been noticed and reportedduring the year nor have we been informed of such case by the management.
xi) According to the information and explanations given to us andbased on our examination of the records the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Companies Act 2013
xii) In our opinion and according to the information and explanationgiven to us the Company is not a nidhi Company. Accordingly provision of clause 3 (xii)of the order is not applicable. xiii) According to the information and explanation givento us and based on our verification of the records of the Company and on the basis ofreview and approvals by the Board of Directors and Audit Committee the transactions withthe related parties are in compliance with Section 177 and 188 of the Act where applicableand the details have been disclosed in the standalone financial statements as required byapplicable accounting standard.
xiv) According to the information and explanation given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year therefore provisions of Clause 3(xiv) are not applicable.
xv) According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions 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 andbased on our examination of the records of the Company the Company is not required to beregistered under Section 45 IA of the Reserve Bank of India At 1934.
Accordingly provisions of Clause 3 (xvi) of the Order are notapplicable to the Company.
Annexure B' to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-Section 3 of Section 143 of the Companies Act 2013
(Referred to in paragraph 8 (ii) (f) of our Audit Report of even date)
1. We have audited the internal financial controls over financialreporting of Dilip Buildcon Limited ("the Company") as of March 31 2021 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
3. 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 Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence 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 standalone financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate 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
4. A company's internal financial control over financial reportingis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company'sinternal financial control over financial reporting includes those policies and proceduresthat
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
5. Because of the inherent limitations of internal financial controlsover financial 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.
6. In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial 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 |
|UDIN : 21111383AAAAIA9694 ||UDIN : 21076889AAAACC1535 |
|Place: Mumbai ||Place: Bhopal |
|Date: 28.05.2021 ||Date: 28.05.2021 |