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Dredging Corporation of India Ltd.

BSE: 523618 Sector: Others
NSE: DREDGECORP ISIN Code: INE506A01018
BSE 00:00 | 29 May 224.95 1.60
(0.72%)
OPEN

219.95

HIGH

231.50

LOW

219.95

NSE 00:00 | 29 May 225.10 1.40
(0.63%)
OPEN

222.00

HIGH

231.95

LOW

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OPEN 219.95
PREVIOUS CLOSE 223.35
VOLUME 13485
52-Week high 444.45
52-Week low 121.80
P/E 5.21
Mkt Cap.(Rs cr) 630
Buy Price 221.00
Buy Qty 1.00
Sell Price 224.95
Sell Qty 10.00
OPEN 219.95
CLOSE 223.35
VOLUME 13485
52-Week high 444.45
52-Week low 121.80
P/E 5.21
Mkt Cap.(Rs cr) 630
Buy Price 221.00
Buy Qty 1.00
Sell Price 224.95
Sell Qty 10.00

Dredging Corporation of India Ltd. (DREDGECORP) - Auditors Report

Company auditors report

To the Members of Dredging Corporation of India Limited

Report on the IND AS Financial Statements:

Opinion

We have audited the accompanying IND AS financial statements of Dredging Corporation of India Limited (the Company) which comprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss (including other comprehensive income) and the Statement of Cash Flows for the year then ended and notes to the Ind AS financial statements including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information in the manner so required and give a true and fair view in conformity with the Indian Accounting standard prescribed under section 133 of the Companies Act 2013 and accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 the profit including other comprehensive income and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act 2013 and the Rules there under and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

1. Key Audit Matter:

The Company carried out capital dredging for Mormugao Port Trust (MPT) during Financial Years 2015-16 and 2016-17 in pursuance of a Contract. Disputes arose between the Company and MPT on account of certain technical parameters and legal matters. The Company has recognised revenue of Rs.10108 lakhs during the respective years and receivable as at 31st March 2019 is Rs.2812 lakhs. The Company has put up a further claim of Rs.9869 lakhs towards idle charges and consequential matters which is considered as and disclosed under Contingent Assets. The disputed matters are pending before the Inter Organisational Committee constituted by Indian Ports Association and as such fair value of receivable is sensitive to outcome of the recommendations of the committee.

Auditor's Response

Our audit procedures consist of verifying management's assumptions relating to fair value of the receivable. We have considered the proceedings of the Committee and the correspondence between the parties from time to time and also relied upon the management's judgement that there is no reduction in the fair value of the receivable outstanding in the books of account.

2. Key Audit Matter:

The Company is availing Input Tax credit on eligible input goods and services and capital goods under respective GST Acts. The Company has not reconciled such Input Tax credits with the Electronic credit Ledgers as per GST Portal.

Auditor's Response

As per the explanations offered by the Company and in the opinion of the management the reconciliation is under process and the effect of such reconciliation will not be material considering the turnover and profit of the Company. Procedure and the status of reconciliation have been appropriately considered by us and also relied upon the management's opinion.

Responsibilities of Management for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position financial performance including other comprehensive income changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error. In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the company's financial reporting process.

Auditor's Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

a. identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

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b. obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

c. evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

d. conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.

e. evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the financial statements for the financial year ended March 31 2019 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Emphasis of Matter

We draw attention to the following matters. Our opinion is not qualified in respect of this matter.

a) Trade Receivables include a sum of Rs.3627 lakhs due from M/s Sethusamudram Corporation Limited (SCL) towards works executed during 2005-06 to 2008-09 which has become a matter of dispute. A Committee chaired by Additional Secretary & Financial Advisor Ministry of Shipping Government of India (AS & FA Committee) compromised the outstanding issues between the Company and SCL by recommending for payment of Rs.13627 lakhs which was accepted by both the Parties. As a consequence of AS & FA Committee recommendations dated 25.02.2019 the Company has reversed the provision for doubtful debts of Rs.3019 lakhs held since FY 2011-12. Further provision of Rs.8444 lakhs made during the first half year of the current year has also been withdrawn.

b) Outstanding balances under Trade Payables Other Payables Trade Receivables Advance to Suppliers are subject to reconciliation.

Other Matters

We did not audit the financial statements of branch at Bangladesh included in the financial statements of the Company whose financial statements reflect total assets of Rs.488 lakhs as at 31st March 2019 and the total revenue of Rs.4173 lakhs for the year ended on that date as considered in the financial statements. The financial statements of this branch have been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch is based solely on the report of such branch auditors. Our opinion is not modified in respect of this matter.

The financial statements of the Company for the year ended 31st March 2018 were audited by other Auditors whose report dated 28th May 2018 expressed an unmodified opinion on those statements. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of Sub-section (5) of Section 143 of the Companies Act 2013 we are enclosing our report in Annexure A.

2. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued by the Central Government of India in terms of subsection (11) of section 143 of the Companies Act 2013 we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

3. As required by Section 143(3) of the Act we report to the extent applicable that:

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

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

c. The Balance Sheet the Statement of Profit and Loss (including Other Comprehensive Income) and the Cash Flow Statement dealt with by this Report are in agreement with the books of account

d. In our opinion the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended.

e. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure C.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) in our opinion and 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 financial position in its financial statements. Refer Note 26.1 to the financial statements;

ii. The company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

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

For Sriramamurthy & Co
Chartered Accountants
FRN 003032S
CA. D.TEJA SAGAR
Place : VisakhapatnamPartner
Date : 30th May 2019Membership No: 227878