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Dynacons Systems & Solutions Ltd.

BSE: 532365 Sector: IT
NSE: DSSL ISIN Code: INE417B01040
BSE 00:00 | 10 Jul 21.35 -0.90
(-4.04%)
OPEN

21.15

HIGH

21.75

LOW

21.15

NSE 00:00 | 10 Jul 21.50 -0.05
(-0.23%)
OPEN

22.25

HIGH

22.25

LOW

20.90

OPEN 21.15
PREVIOUS CLOSE 22.25
VOLUME 1421
52-Week high 35.60
52-Week low 12.65
P/E 3.05
Mkt Cap.(Rs cr) 20
Buy Price 21.15
Buy Qty 21.00
Sell Price 23.25
Sell Qty 400.00
OPEN 21.15
CLOSE 22.25
VOLUME 1421
52-Week high 35.60
52-Week low 12.65
P/E 3.05
Mkt Cap.(Rs cr) 20
Buy Price 21.15
Buy Qty 21.00
Sell Price 23.25
Sell Qty 400.00

Dynacons Systems & Solutions Ltd. (DSSL) - Auditors Report

Company auditors report

To the Members of Dynacons Systems & Solutions Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Dynacons Systems & SolutionsLimited (“the Company”) which comprise the Balance Sheet as at 31st March 2019the Statement of Profit and Loss Statement of Changes in Equity and Statement of CashFlows for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information.

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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31st 2019 and its profit changes in equity and itscash flows for the year ended on that date.

Basis for Opinion

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

Key Audit Matters

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.

A) Revenue for the Company consists primarily of sale of goods recognized and provisionof services as per the accounting policy described in Note 2.2 to the accompanyingstandalone financial statements. Refer Note 22 for details of revenue recognized duringthe year.

The Company recognizes revenue from sale of goods when it satisfies its performanceobligation in accordance with the principles of Ind AS 115 Revenue from Contracts withCustomers adopted by the Company from the current year by transferring the control ofgoods to its customers through delivery evidenced by acknowledgment of receipt of goods bysuch customers. Considering the large volume of revenue transactions near period endthere may be a risk of revenue recognition occurring before the satisfaction of theperformance obligations by the company in accordance with the applicable Incoterms. UnderStandards on Auditing 240 'The auditor's responsibilities relating to fraud in an audit offinancial statements' there is a presumed risk that revenue may be misstated owing to theimproper recognition of revenue.

Considering the above factors revenue recognition (cut-off) was identified as a keyaudit matter for the current year audit.

Auditor's Response

Our audit work included but was not limited to the following procedures:

- Obtained an understanding of the revenue and receivable business process andassessed the appropriateness of the accounting policy adopted by the company for revenuerecognition.

- Evaluated design and implementation of the key controls around revenue recognitionincluding controls around contract approvals invoice verification transporterconfirmations and customer acknowledgments.

- Tested operating effectiveness of the above identified key controls over revenuerecognition near period end.

- For samples selected from revenue recorded during specific period before and afteryear end:

• Verified the customer contracts for delivery terms verified the customeracknowledgments to evidence proof of delivery for domestic sales at or near period end

Responsibilities of Management and Those Charged with Governancefor the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) with respect to preparation of standalone financial statements that give a true andfair view of the financial position financial performance changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act.

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 statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Information Other than the Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's report but does not includethe Secretarial Audit report Standalone financial statements and our auditor's reportthereon. The Board's report is expected to be made available to us after the date of thisauditor's report.

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

Auditor's Responsibilities for the Audit of the FinancialStatements

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 high level of assurance but is not a guarantee thatan audit conducted in accordance with SAs will always detect a material misstatement whenit exists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SA's we exercise professional judgment andmaintain 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a 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 achieve fair presentation.

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 financial statements of thecurrent period and are therefore the key audit matters.

We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. 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 Companies Act 2013 we give in the “Annexure A” a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act 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 purposes 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 the Statement of Profit and Loss changes in equity and the CashFlow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 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”.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended :

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(h) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 financial statements - Refer Note No.29.6 to the financial statements.

ii. The Company has long term contracts as at March 31 2019 for which there are nomaterial foreseeable losses. The Company does not have derivative contracts as at March312019.

iii. There was no amount required to be transferred to the Investor Education andProtection Fund by the Company during the year ended March 312019.

For M S P & CO.
Chartered Accountants
(Firm Registration No. 107565W)
M. S. Parikh
Partner
Membership No.: 08684
Place : Mumbai
Date : May 27 2019

The Annexure referred to in our Independent Auditor's Report of even date to themembers of the Company on the standalone Ind AS financial statements for the year endedMarch 31st 2019 we report that:

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:

i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The company has a program of verification to cover all items of fixed assets in thephased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. Pursuant to the program certain fixed Assets werephysically verified by the management during the year. According to the information andexplanation given to us no material discrepancies were noticed on such verification.

(c) The company does not own any immovable properties hence the clause 1(c) of theorders are not applicable to the company and hence not commented

ii) Physical verification of inventories has been conducted at reasonable intervals bythe management. The Company is generally maintaining proper records of inventory and nomaterial discrepancies were noticed on physical verification between physical stock andthe books records.

iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained u/s 189of the Act; hence the Clause (iii) of paragraph 3 of the Order are not applicable to theCompany.

iv) The company has not granted any loans or made any investment or given loans orguarantees or securities to the parties or other parties covered under the provision ofsection 185 and 186 of the act.

v) The company has not accepted any deposit during the year and does not have anyunclaimed deposits as at March 312019 and therefore the provision of the clause 3(v) ofthe order are not applicable to the company.

vi) The Central Government has not prescribed the maintenance of cost records undersub- section (1) of section 148 of the Act for any of the activities of the Company; hencethe Clause (vi) of paragraph 3 of the Order are not applicable to the Company.

vii) According to the information and explanations given to us in respect of statutorydues:-

(a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income Tax GST Value added ServiceTax Sales Tax Custom and Excise duty and other statutory dues with the appropriateauthorities.

(b) According to information and explanation given to us there are no disputedstatutory dues including Provident Fund Employees State Insurance Income Tax GST Value added Service Tax Sales Tax Custom and Excise duty and other statutory dueswhich have not been deposited on account of dispute except as stated below :-

Name of Statute Nature of dues Year(s) to which it pertains Amount Not Paid (in Lakhs) Forum where dispute is pending
Value Added tax Value Added Tax FY 2008-2009 11.14 Deputy Commissioner of Sales tax Appeal.

viii) In our opinion and according to the information and explanation given to us thecompany has not defaulted in the repayment of dues to bank or Non Banking FinancialCompanies. The company does not have any loans or borrowing from the government or has notissued any debenture.

ix) Based upon the audit procedures performed and according to the information andexplanations given to us the company has not raised money by way of initial public offeror further public offer (including debt instruments). Term Loans for the purpose ofacquiring vehicles were applied for the purpose for which those are raised.

x) To the best of our knowledge and belief and according to the information andexplanations given to us and considering the size and nature of the Company's operationsno fraud by the company or no material fraud of Company have been noticed or reportedduring the year and nor have we been informed of such case by the management.

xi) According to the information and explanation given to us and based on ourexamination of the records the Company has paid for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV of the Act.

xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company; hence Clause (xii) of paragraph 3 of the Order is notapplicable.

xiii) According to the information and explanations given to us and based on ourexamination of records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.

xiv) The company has made preferential allotment of shares during the year underreview. Based upon the audit procedure performed and the information and explanation givenby the management we report that the requirement of section 42 of the Companies Act2013 have been complied with and the amount raised have been used for the purpose forwhich funds were raised.

xv) According to the information and explanations given to us and based on ourexamination of records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with to its Directors; hence the clause(xv) of paragraph 3 of the Order is not applicable and hence not commented upon.

xvi) In our opinion and according to the information and explanations given to us thecompany is not required to be registered under section 45 - IA of Reserve Bank of IndiaAct 1934 and hence provision of clause 3(xvi) of the order are not applicable to thecompany and hence not commented upon.

For M S P & CO.
Chartered Accountants
(Firm Registration No. 107565W)
M. S. Parikh
Partner
Membership No.: 08684
Place : Mumbai
Date : May 27 2019

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (“the Act”).

We have audited the internal financial controls over financial reporting of DynaconsSystems & Solutions Limited. (“the Company”) as of March 312019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

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 financial statements for external purposes in accordance with generallyaccepted accounting principles.

A company's internal financial control over financial reporting includes those policiesand procedures that:

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

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

3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

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

In our opinion to the best of our information and according to explanation given tous the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting 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.

For M S P & CO.
Chartered Accountants
(Firm Registration No. 107565W)
M. S. Parikh
Partner
Membership No.: 08684
Place : Mumbai
Date : May 27 2019