TO THE MEMBERS OF NBCC (INDIA) LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofNBCC (India) Limited (herein referred to as "the Company") which comprise thebalance sheet as at March 31 2021 the statement of profit and loss (including othercomprehensive income) the statement of changes in equity and the statement of cash flowsfor the year then ended and notes to the financial statements including a summary of thesignificant accounting policies and other explanatory information in which is includedthe unaudited financial statements of 2 foreign branches of the company located atMauritius and Maldives for the year ended on that date (as certified by the management)(hereinafter referred to as "the 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 so requiredand give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the company as at March 31 2021its profit total comprehensive income changes in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143 (10) of theCompanies Act 2013. Our responsibilities under those Standards are further described inthe Auditor's Responsibilities for the Audit of the 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 (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the standalone financial statements.
Emphasis of Matters
We invite attention to the following matters in the notes to thestandalone financial statement:
i) Note No. 47(i) and 47(ii) regarding non-execution of conveyance deedin favour of the company and Note No. 47(iii) and 47(iv) regarding non handing over ofpossession and non execution of lease deed and other matters incidental thereto inrespect of various properties forming part of the land bank (inventory) involving inaggregate a sum of Rs. 21894.66 Lakh;
ii) Note No. 47(v) regarding payment by the company to L&DO MoHUAas premium for availing additional ground coverage at company's built up and sold project"NBCC Plaza" and incurring of other construction cost and consequential expensesthereon for project which is stuck up on account of similar demand raised by South DelhiMunicipal Corporation in respect of additional ground coverage in the year 2015;
iii) Note No. 47(vi) regarding developed real estate project having acarrying value of Rs. 8699.87 Lakh and remaining unsold for want of environmentalclearance;
iv) Note No. 47(vii) regarding developed real estate projects having acarrying value of Rs. 916.96 Lakh and remaining unsold due to unfavourable marketconditions;
v) Note No. 47(viii) regarding developed real estate projects costingRs. 5775.82 Lakh and remaining unsold for over five years due to unfavourable marketconditions resulting in deterioration in value by Rs. 1172.23 Lakh;
vi) Note No. 47(x) regarding developed real estate partially sold andoccupied project remaining unsold due to structural and other defects. The matter is alsounder investigation by vigilance department;
vii) Note No. 48(ii) regarding irregularities in the project beingexecuted by the company and consequent referral of the matter to vigilance department;
viii) Note No. 48(iii) regarding the balances of Trade ReceivablesLoans and Advances Security Deposits Earnest Money Deposits Deposits and Trade Payablesbeing subject to reconciliation confirmation and consequential adjustments thereof.
ix) Note No. 48(v) regarding uncertainties arising out of the outbreakof COVID - 19 pandemic and disruptions in regular business operations due to lockdown andconsequential assessment made by the management on its business and its associatedfinancial risks;
Our opinion is not modified in respect of above matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere 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 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 Matters ||Auditor's Response |
|Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in respect of "Revenue from contracts with Customers" under Ind AS 115 (Revenue Accounting Standard) ||Principal Audit Procedures |
|The application of this accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period and disclosures including presentations of balances in the financial statements. ||Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows: |
|An estimated effort is a critical estimate to determine revenue as it requires consideration of progress of the contract. Efforts incurred till date; efforts required to complete the remaining performance obligation. ||Evaluated the effectiveness of control over the preparation of information that are designed to ensure the completeness and accuracy. |
|Refer Note No. 25 to the standalone financial statements. || Selected a sample of existing continuing contracts and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. |
| || Tested the relevant information accounting systems and change relating to contracts and related information used in recording and disclosing revenue in accordance with the Ind AS 115. |
| || Reviewed some sample of contracts to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligation. |
| || Performed analytical procedures and test of details for reasonableness and other related material items. |
|Assessment and Recoverability of trade receivables ||Principal Audit Procedures |
|The company has net trade receivables outstanding of Rs. 163854.35 Lakh at the end of March 2021. ||We assessed the company's internal process to recognize the revenue and review mechanism of trade receivables. Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows: |
|These balances are related to revenue recognized in line with Ind AS for ongoing contracts and completed contracts. The assessment of its recoverability is a key audit matter in the audit due to its size and high level of management judgment. || Evaluated the process of invoicing verification and reconciliation with customer. |
|Refer Note No. 10 to the standalone financial statements. || Obtained the list of project wise outstanding details and its review mechanism by the management. |
| || Reviewed the guidelines and policies of the company for impairment of trade receivables. |
| || Tested the accuracy of ageing of trade receivables at the year end on sampling basis. |
| || Performed analytical procedures and test of data their reasonableness and recoverability and other material items. |
|Provisions and Contingent Liabilities ||Principal Audit Procedures |
|The company is involved in various taxes and other disputes for which final outcomes cannot be easily predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions which require the use of judgment and such judgment relates primarily to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgment required the materiality of such litigations and the complexity of the assessment process the area is a key matter for our audit. ||Our audit procedure in response to this key Audit Matter included among others: |
|Refer Note No. 38 to the standalone financial statements. || Assessment of the process and relevant controls implemented to identify legal and tax litigations and pending administrative proceedings. |
| || Assessment of assumptions used in the evaluation of potential legal and tax risks performed by the legal and tax department of the company considering the legal precedence and other rulings in similar cases. |
| || Inquiry with legal and tax departments of the company regarding the status of the most significant disputes and inspection of the key relevant documentation. |
| || Analysis of opinion received from the experts where available. |
| || Review of the adequacy of the disclosures in the notes to the financial statements. |
Information Other than the Standalone Financial Statements andAuditor's Report Thereon
The company's management is responsible for the preparation of theother information. The other information comprises the information included in director'sreport and annexure but does not include the standalone financial statements and ourauditor's report thereon. The director's report and annexure is expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated.
When we read the 'Other reports' if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take appropriate actions if required.
Management's Responsibility and Those Charged with Governance for theStandalone Financial Statements
The management of the company and the board of directors areresponsible for the matters stated in Section 134(5) of the Companies Act 2013 ("theAct") with respect to the preparation of these financial statements that give a trueand fair view of the financial position financial performance including othercomprehensive income and changes in equity and cash flows of the company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements the management of thecompany 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 concernbasis of accounting unless the management of the company either intends to liquidate thecompany or to cease operations or has no realistic alternative but to do so.
The board of directors is responsible for overseeing the company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial 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 SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial 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.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsiblefor expressing our opinion on whether the company has adequate internal financial controlssystem in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on thecompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our Auditor's Report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify 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.
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 requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our 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 Auditor's 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.
We did not audit the financial statement/information of 2 foreignbranches included in the standalone financial statements of the company whose financialstatements / financial information reflect total assets of Rs. 6253.05 Lakhs as on 31stMarch 2021 and total revenue of Rs. 12544.23 Lakhs for the year ended on that date asconsidered in the standalone financial statements. The financial statements/information ofsaid branch has been furnished to us certified by the management and our opinion so faras it relates to the amounts and disclosures included in respect of said branch is basedsolely on the management certified financial statements / information.
Our opinion is not modified in respect of above said matter.
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 of the Act we give in "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
(2) 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 purposes of ouraudit;
b. In our opinion proper books of account as required by law havebeen kept by the company so far as it appears from our examination of those books andproper returns adequate for the purposes of our audit have been received from thebranch(es) not visited by us;
c. The balance sheet the statement of profit and loss including othercomprehensive income statement of changes in equity and the statement of cash flows dealtwith 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 prescribed under Section 133 of the Act read withthe companies (Indian Accounting Standards) Rules 2015 as amended;
e. The company being a Government Company the provisions of Section164(2) of the Act in respect of disqualification of directors are not applicable to thecompany in terms of notification no. G.S.R.463(E) dated 5th June 2015 issued by Ministryof Corporate Affairs Government of India;
f. With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".
g. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended weare informed that the company being a Government Company the provisions of section 197read with schedule V of the Act relating to managerial remuneration are not applicable tothe company in terms of Notification No. G.S.R. 463(E) dated 5th June 2015.
h. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i) The company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements. Refer Note No. 38 to thefinancial statements.
ii) The company has made provision as required under the applicablelaws or Indian Accounting Standards for material foreseeable losses if any on long-termcontracts. Further the company does not have any derivative contract as at March 312021.
iii) There has been no delay in transferring the amounts required tobe transferred to the Investor Education and Protection Fund by the company in accordancewith the relevant provisions of the Act and Rules made thereunder.
(3) On the basis of such checks of the books and records of thecompany as we considered appropriate and according to the information and explanationsgiven to us we are enclosing our report in terms of section 143(5) of the Act on thedirections issued by the Comptroller and Auditor General of India in "AnnexureC" attached.
"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in Paragraph 1 under the heading 'Report on Other Legaland Regulatory Requirements' of our report of even date on the accounts of NBCC (India)Limited (herein referred to as the company) for the year ended March 31 2021)
i) (a) The company has maintained proper records showing fullparticulars including quantitative details and situation of its fixed assets (PPE).
(b) According to the information and explanations given to us physicalverification of property plant & equipment is being conducted annually which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. No material discrepancies were noticed on such verification during the year.
(c) According to the information and explanations given to us and onthe basis of our examination of records of the company the title / lease deeds of theimmovable properties (as disclosed in Note 2 on Property Plant & Equipment to thefinancial statements) are held in the name of the company except in cases given below:
(Rs. in Lakh)
|In Case of Land || || |
|Total number of cases : ||2 ||1 |
|Whether Lease hold/free hold : ||Lease Hold ||Free Hold |
|Gross Carrying Amount (at cost as at 31.03.2021) : ||544.53 ||1218.73 |
|Net Book Value ( as at 31.03.2021) ||522.28 ||1218.73 |
|In Case of Building: || || |
|Total number of cases : ||1 ||2 |
|Whether Lease hold/free hold : ||Lease Hold ||Free Hold |
|Gross Carrying Amount (at cost as at 31.03.2021) : ||687.66 ||380.39 |
|Net Book Value ( as at 31.03.2021) ||633.31 ||345.54 |
ii) The physical verification of inventory has been conducted atreasonable intervals by the management during the year. The discrepancies noticed onphysical verification of inventory as compared to book records were not material.
iii) According to the information given to us the company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Therefore provisions of clause (iii) (a) (iii) (b) and (iii) (c) ofparagraph 3 of the Order are not applicable to the company.
iv) The company has not granted any loans or made any investments orprovided any guarantee or security to the parties covered under the provisions of thesection 185 and 186 of the Companies Act 2013. Therefore provisions of clause (iv) ofparagraph 3 of the Order are not applicable to the company.
v) According to the information and explanations given to us and therecords examined by us the company has not accepted any deposits from public during theyear within the meaning of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and the rulesframed thereunder. Accordingly provisions of clause 3(v) of the Order are not applicableto the company.
vi) We have broadly reviewed the books of accounts maintained by thecompany in respect of Engineering Procurement and Construction (EPC) Division and RealEstate Division where pursuant to the rules made by the Central Government themaintenance of cost records has been specified under sub-section (1) of section 148 of theCompanies Act 2013 and are of the opinion that prima facie the prescribed accounts andrecords have been so made and maintained. We have however not made a detailedexamination of the records with a view to determine whether they are accurate or complete.For Project Management and Consultancy (PMC) division we have been informed that theseactivities are carried on back to back basis by sub- contractors appointed by the company.Hence the company is not required to maintain cost records for the said division.
vii) (a) According to the information and explanations given to us andthe records of the company produced before us for verification in our opinion thecompany is generally regular in depositing with appropriate authorities undisputedstatutory dues including provident fund income tax goods & service tax cess andother material statutory dues as applicable to it and there are no undisputed statutorydues outstanding as on 31st March 2021 for a period of more than six months from the datethey became payable. We have been informed that the provisions of Employees StateInsurance Act are not applicable to the company.
(b) According to the information and explanations given to us and therecords of the company examined by us the particulars of dues of income tax value addedtax service tax and goods and service tax as at 31st March 2021 which have not beendeposited on account of dispute are as under:
|Name of the Statutes ||Nature of Dues ||Period to which the amount relates ||In Lakh ||Pending Forum |
| || ||2007-08 to 2011-12 ||153.74 ||CESTAT Ranchi |
| || ||2005-06 to 2007-08 ||835.48 ||CESTAT Kolkata |
| || ||2010-11 to 2014-15 ||871.00 ||Commissioner Patna |
| || ||2012-13 to 2016-17 ||1169.25 ||Commissioner Service Tax Mumbai |
| || ||2007-08 to 2013-14 ||480.08 ||Hon'ble Supreme Court |
|Finance Act 1994 ||Service Tax ||2010-11 to 2014-15 ||285.31 ||CESTAT Allahabad U.P. |
| || ||2015-16 ||17.44 ||Commissioner (Appeals) U.P |
| || ||2016-17 ||121.00 ||Commissioner of Central Tax (Appeals-II) Delhi |
| || ||2001 -02 to 2003-04 ||574.00 ||CESTAT |
| || ||2006-07 to 2011-12 ||86.17 ||CESTAT Kolkata |
| ||Value Added Tax (VAT) ||2008-09 to 2014-15 ||1220.42 ||Jt. Commissioner of Commercial Taxes Jharkhand |
|Jharkhand VAT Act 2005 ||Value Added Tax (VAT) ||2012-13 ||2.66 ||Commissioner (Appeals) Jharkhand |
| || ||2016-17 ||663.12 ||Deputy Commissioner Commercial Tax Jharkhand |
| || ||2009-10 to 2014-15 ||4495.06 || |
|West Bengal VAT Act 2003 ||Value Added Tax (VAT) ||2008-09 ||49.87 ||West Bengal Tax Tribunal |
| || ||2009-10 ||42.72 || |
| || ||2012-13 ||135.24 ||Commissioner of Sales Tax Department Mumbai |
| || ||2013-14 ||41.32 || |
|Maharashtra VAT Act 2002 ||Value Added Tax (VAT) ||2015-16 ||396.38 || |
| || ||2016-17 ||324.01 ||Commissioner of Sales Tax Department Mumbai |
|Karnataka VAT Act ||Value Added Tax ||2008-09 ||298.47 ||Karnataka Appellate |
|2003 ||(VAT) ||2012-13 ||59.67 ||Tribunal |
|Delhi VAT Act 2004 ||Value Added Tax (VAT) ||2013-14 & 2014-15 ||40480.18 ||Appellate Tribunal VAT New Delhi |
| ||Value Added Tax (VAT) ||2013-14 ||100.51 ||Appellate Deputy Commissioner of Commercial Tax Satna |
| || ||2014-15 ||39.87 || |
| || ||2015-16 ||17.97 || |
|Madhya Pradesh VAT Act 2002 ||Value Added Tax (VAT) ||2009-10 ||5.42 ||1st appeal with Adl. Comm. Gr-II (Appeal) Jhansi filed on 05.03.2020 |
| ||Value Added Tax (VAT) ||2013-14 ||65.88 ||1st appeal with Adl. Comm. Gr-II (Appeal) Jhansi filed on 05.03.2020 |
| || ||2010-11 ||22.40 ||Additional Commissioner of Commercial Tax |
|Uttar Pradesh VAT Act 2008 ||Value Added Tax (VAT) ||2011-12 ||51.34 || |
| || ||2012-13 ||18.64 || |
| || ||2013-14 ||274.08 ||Commercial Tax Department UP |
|Rajasthan VAT Act 2003 ||Value Added Tax (VAT) ||2002-03 ||16.26 ||Writ Petition is pending in HC Jaipur |
| ||Goods & Services Tax ||2017-18 ||840.99 ||Suptd. of Taxes-Tripura |
|Goods & Services Tax || ||2018-19 ||2205.36 ||Advance Ruling of Delhi Authority |
| || ||2014-15 ||158.06 ||ITAT |
| || ||2012-13 ||47.81 ||ITAT |
| || ||2013-14 ||125.73 ||CIT(A) |
|Income Tax Act 1961 ||Income Tax Act ||2016-17 ||150.89 ||CIT(A) |
| || ||2011-12 ||739.60 ||Hon'ble Delhi High Court |
| || ||2015-16 ||27.88 ||ITAT |
| || ||2012-13 ||76.46 ||ITAT |
viii) In our opinion and according to the information and explanationsgiven to us the company has not defaulted on repayment of dues to banks. Further thecompany has not issued any debentures during the year.
ix) During the year the company has not raised any money throughinitial public offer or further public offer (including debt instruments) and term loans.Therefore provisions of clause (ix) of paragraph 3 of the Order relating to utilizationof moneys raised by way of initial public offer or further public offer including debtinstruments and term loans is not applicable to the company.
x) During the course of our examination of the books and records of thecompany in accordance with generally accepted auditing practices in India and according tothe information and explanations given to us and as represented by the management no caseof frauds by the company or on the company by its officers or employees has been noticedor reported during the year.
xi) The company being a Government company provisions of clause no.(xi) of para 3 of the Order regarding section 197 of the Companies Act 2013 relating tomanagerial remuneration is not applicable to the company in view of Notification no.G.S.R. 463(E) dated 05.06.2015.
xii) In our opinion and according to the information and explanationsgiven to us the company is not a Nidhi company and therefore the provisions of clause(xii) of para 3 of the Order are not applicable to the company;
xiii) According to the records of the company examined by us and theinformation and explanations given to us the related party transactions entered into bythe company during the year have been entered at arm's length basis in ordinary course ofbusiness and are in compliance with section 177 and 188 of the Companies Act 2013 andhave been disclosed in the standalone Ind AS financial statements;
xiv) According to the information and explanations given to us thecompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year and accordingly the provisions of clause(xiv) of para 3 of the Order are not applicable to the company;
xv) The company has not entered into any non-cash transactions withdirectors or persons connected with him and accordingly the provisions of clause (xv) ofpara 3 of the Order are not applicable to the company;
xvi) According to the information and explanation given to us thecompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATEON THE STANDALONE FINANCIAL STATEMENTS OF NBCC (INDIA) LIMITED (hereinafterreferred to as COMPANY)
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 with reference tostandalone financial statements of NBCC (INDIA) LIMITED as of March 31 2021 inconjunction with our audit of the standalone financial statements of the company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tostandalone financial statement criteria established by the company considering theessential components of internal control stated in the Guidance Note. 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.
Our responsibility is to express an opinion on the company's internalfinancial controls with reference to standalone financial statement based on our audit. Weconducted our audit in accordance with the Guidance Note and standard on auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls with reference to standalone financial statements.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 with reference to standalone financial statements were 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 with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the standalone financial statementswhether due to fraud 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 internal financialcontrols with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to StandaloneFinancial Statements
A company's internal financial control with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial control with reference to standalone financial statementsincludes those policies and procedures that
(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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls with reference tostandalone financial statements
Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
In our opinion the company has in all material respects an adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at March 31 2021 based on the internal control with referenceto standalone financial statements criteria established by the company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
"ANNEXURE - C" TO INDEPENDENT AUDITOR'S REPORT
Directions indicating the areas to be examined by the StatutoryAuditors during the course of audit of annual accounts of NBCC (India) Limited for theyear 2020-21 issued by the Comptroller & Auditor General of India under Section 143(5)of the Companies Act 2013
|S. No. ||Areas Examined ||Replies ||Impact on financial statements |
|1 ||Whether the Company has system in place to process all the accounting transactions through IT system. If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. ||The company has an in house developed ERP system to process all the accounting transactions through IT system. For billing the company has a separate web portal 'Online Billing' and said bill is posted manually in books in ERP. Some manual intervention is necessitated for valuation of inventories; however accounting entries for the same are also processed through ERP. ||Nil |
|2 ||Whether there is any restructuring of an existing loan or cases of waiver / write off of debts / loans / interest etc. made by a lender due to the company's inability to repay the loan? If yes the financial impact may be stated. Whether such cases are properly accounted for ? (In case lender is a Government Company then this direction is also applicable for Statutory Auditor of lender company) ||There are no cases of restructuring of any loan or cases of waiver / write off of debts / loans / interest etc. made by any lender due to the company's inability to repay the loan. ||Nil |
|3 ||Whether fund received / receivable for specific schemes from Central / State agencies were properly accounted for /utilized as per its term and conditions? List the cases of deviation. ||The company has not received any fund for specific schemes from Central / State Agencies during the year. ||Nil |
|For Dhawan & Co. |
|Chartered Accountants |
|ICAI Firm Registration No.: 002864N |
|SUNIL GOGIA |
|M. No. : 073740 |
|ICAI UDIN : 21073740AAAACK7956 |
|Place : New Delhi |
|Date : June 29 2021 |