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NBCC (India) Ltd.

BSE: 534309 Sector: Infrastructure
NSE: NBCC ISIN Code: INE095N01031
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OPEN 30.80
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VOLUME 473229
52-Week high 68.35
52-Week low 28.50
P/E 28.04
Mkt Cap.(Rs cr) 5,148
Buy Price 28.50
Buy Qty 3025.00
Sell Price 28.55
Sell Qty 4539.00
OPEN 30.80
CLOSE 29.50
VOLUME 473229
52-Week high 68.35
52-Week low 28.50
P/E 28.04
Mkt Cap.(Rs cr) 5,148
Buy Price 28.50
Buy Qty 3025.00
Sell Price 28.55
Sell Qty 4539.00

NBCC (India) Ltd. (NBCC) - Auditors Report

Company auditors report

TO THE MEMBERS OF NBCC (INDIA) LIMITED Report on the Audit of the Standalone FinancialStatements Opinion

We have audited the accompanying standalone financial statements of NBCC (India)Limited (herein referred to as "the Company") which comprise the balance sheetas at March 31 2019 the statement of profit and loss (including other comprehensiveincome) the statement of changes in equity and statement of cash flows for the year thenended and notes to the financial statements including a summary of the significantaccounting policies and other explanatory information in which is included the unauditedfinancial statements of 1 foreign branch of the company located at Mauritius for the yearended on that date as certified by the management) (hereinafter referred to as "thestandalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act') in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the company as at March 31 2019 profit total comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143 (10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the standalone financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto 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 view of adoption of Ind AS 115 "Revenue from contracts with Customers" (Revenue Accounting Standard) applicable from 1st April 2018. Principal Audit Procedures
We assessed the company's internal process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows:
The application of the new revenue accounting standard from current financial year 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. • Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• 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.
Refer Note No. 46 to the standalone financial statements. • Tested the relevant information accounting systems and change relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
Assessment and Recoverability of trade receivables PrinciDal Audit Procedures
The company has trade receivables outstanding of ' 2107.63 crore at the end of March 2019. We assessed the company's internal process to recognize the revenue and review mechanism of trade receivables.
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. Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows:
• Evaluated the process of invoicing verification and reconciliation with customer.
Refer Note No. 11 to the standalone financial statements. • 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 Continaent 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. Our audit procedure in response to this key Audit Matter included among others:
• 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.
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. • Inquiry with legal and tax departments of the company regarding the status of the most significant disputes and inspection of the key relevant documentation.
Refer Note No. 38 to the standalone financial statements. • 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 and Auditor's Report Thereon

The company's management is responsible for the preparation of the other information.The other information comprises the information included in director's report and annexurebut does not include the standalone financial statements and our auditor's report thereon.The director's report and annexure is expected to be made available to us after the dateof this auditor's report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

Management's Responsibility and Those Charged with Governance for the StandaloneFinancial Statements

The management of the company and the board of directors are responsible for thematters stated in Section 134(5) of the Companies Act 2013 ("the Act") withrespect to the preparation of these financial statements that give a true and fair view ofthe financial position financial performance including other comprehensive income andchanges in equity and cash flows of the company in accordance with the Ind AS and otheraccounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the management 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 management of the company either intends to liquidate the company or to ceaseoperations or has no realistic alternative but to do so.

The board of directors is responsible for overseeing the company's financial reportingprocess.

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

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 highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these standalone financial statements.

As part of an audit in accordance with SAs 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness 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 to draw attention in our Auditor's Report to the related disclosures inthe 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'sReport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our Auditor's Report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 Act we give in "Annexure-A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

(2) As required by Section 143 (3) of the Act based on our audit we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the 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 and proper returnsadequate for the purposes of our audit have been received from the branch(es) not visitedby us;

c. The balance sheet the statement of profit and loss including other comprehensiveincome statement of changes in equity and the statement of cash flows dealt with by thisReport are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. The company being a Government Company the provisions of Section 164(2) of the Actin respect of disqualification of directors are not applicable to the company in terms ofnotification no. G.S.R.463(E) dated 5th June 2015 issued by Ministry of CorporateAffairs Government of India;

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 we areinformed that the company being a Government Company the provisions of section 197 readwith schedule V of the Act relating to managerial remuneration are not applicable to thecompany 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's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements. Refer Note No. 38 to the financialstatements.

ii) The company has made provision as required under the applicable laws or IndianAccounting Standards for material foreseeable losses if any on long-term contracts.Refer Note No. 19 and 23. Further the company does not have any derivative contract as atMarch 31 2019.

iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company in accordance with the relevant provisions ofthe Act and Rules made there under.

(3) As required by section 143(5) of the Act we have considered the directions issuedby the Comptroller and Auditor General of India the action taken thereon and its impacton the accounts and financial statements of the company -Refer "Annexure C"attached.

For Dhawan & Co.
Chartered Accountants
FRN:002864N
Sd/-
Inder Jeet Dhawan
Place : New Delhi (Partner)
Dated : May 29 2019 M. No. : 081679

ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in Paragraph 1 under the heading 'Report on Other Legal and RegulatoryRequirements' of our report of even date on the accounts of NBCC (India) Limited (hereinreferred to as the company) for the year ended March 31 2019)

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

(b) According to the information and explanations given to us physical verification ofproperty plant & equipment is being conducted annually which in our opinion isreasonable having regard to the size of the company and nature of its business. Nomaterial discrepancies were noticed on such verification during the year.

(c) According to the information and explanations given to us and on the basis of ourexamination of records of the company the title / lease deeds of the immovable properties(as disclosed in Note 2 on Property plant & Equipment to the financial statements)are held in the name of the company except in cases given below:

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 31.3.2019) 536.26 1218.73
Net Book Value (as at 31.3.2019) 522.34 1218.73

In case of Buildings:

Total number of cases 3
Whether Lease hold/free hold Lease Hold
Gross Carrying Amount (at cost as at 31.3.2019) 2245.15
Net Book Value (as at 31.3.2019) 2192.97

ii) The physical verification of inventory has been conducted at reasonable intervalsby the management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material.

iii) According to the information given to us the company has not granted any loanssecured or unsecured to companies firms limited liability partnerships or other partiescovered in the register maintained under section 189 of the Companies Act 2013.Therefore provisions of clause (iii) (a) (iii) (b) and (iii) (c) of paragraph 3 of theOrder are not applicable to the company.

iv) The company has not granted any loans or made any investments or provided anyguarantee or security to the parties covered under the provisions of the section 185 and186 of the Companies Act 2013. Therefore provisions of clause (iv) of paragraph 3 of theOrder are not applicable to the company.

v) According to the information and explanations given to us and the records examinedby us the company has not accepted any deposits from public during the year within themeaning of sections 73 to 76 or any other relevant provisions of the Companies Act 2013and the Companies (Acceptance of Deposits) Rules 2014 and the rules framed thereunder.Accordingly provisions of clause 3(v) of the Order are not applicable to the company.

vi) We have broadly reviewed the books of accounts maintained by the company in respectof Engineering Procurement and Construction (EPC) Division and Real Estate Divisionwhere pursuant to the rules made by the Central Government the maintenance of costrecords has been specified under sub-section (1) of section 148 of the Companies Act 2013and are of the opinion that prima facie the prescribed accounts and records have been somade and maintained. We have however not made a detailed examination of the records witha view to determine whether they are accurate or complete. For Project Management andConsultancy (PMC) division we have been informed that these activities are carried onback to back basis by sub contractors appointed by the company. Hence the company is notrequired to maintain cost records for the said division.

vii) (a) According to the information and explanations given to us and the records ofthe company produced before us for verification in our opinion the company is generallyregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund income tax goods & service tax cess and other material statutorydues as applicable to it and there are no undisputed statutory dues outstanding as on31st March 2019 for a period of more than six months from the date they became payable.We have been informed that the provisions of Employees State Insurance Act are notapplicable to the company.

(b) According to the information and explanations given to us and the records of thecompany examined by us the particulars of dues of income tax value added tax servicetax and goods and service tax as at 31st March 2019 which have not been deposited onaccount of dispute are as under:

Name of the Statutes Nature of Dues Period to which the amount relates (Rs. lakh) Pending Forum
2007-08 to 2011-12 153.75 CESTAT Ranchi
2005-06 to 2007-08 835.48 High Court Ranchi
2001-02 to 2011-12 994.57 CESTAT Kolkata
2010-11 to 2014-15 871.00 Commissioner Patna
2015-16 166.86 Commissioner (Appeals) WB
2012-13 to 2016-17 4.29 Asst. Commissioner (Audit) Circle-G GST Audit-II Mumbai
Finance Act 1994 Service Tax 2012-13 to 2016-17 1169.25 Commissioner GST Audit-II Mumbai
2007-08 to 2013-14 480.08 Hon'ble Supreme Court
2010-11 to 2014-15 142.66 CESTAT Allahbad U.P.
2015-16 17.44 Commisoner (Appeals) U.P.
2012-13 to 2014-15 7.37 Commisoner of Service Tax Noida
2013-14 to 2015-16 19.46 Commissioner of Service Tax Chennai
2016-17 121.00 Commissioner of Central Tax (Appeals-II) Delhi
Jharkhand VAT Act 2005 Value Added Tax (VAT) 2008-09 to 2014-15 5882.82 Joint Commissioner of Commercial Taxes Jharkhand
West Bengal VAT Act 2003 Value Added Tax (VAT) 2009-10 to 2014-15 3837.58
2008-09 49.87 West Bengal Tax Tribunal
2009-10 42.72
Maharashtra VAT Act 2002 Value Added Tax (VAT) 2012-13 to 2013-14 176.54 Commissioner of Sales Tax Department Mumbai
2014-15 63.25 Dy. Commissioner of MVAT Mumbai
Name of the Statutes Nature of Dues Period to which the amount relates (Rs. lakh) Pending Forum
Delhi VAT Act 2004 Value Added Tax (VAT) 2013-14 2014-15 40480.18 Appellate Tribunal VAT New Delhi
Karnataka VAT Act 2003 Value Added Tax (VAT) 2010-11 to 2012-13 64.82 Karnataka Appellate Tribunal
Haryana VAT Act 2003 Value Added Tax (VAT) 2012-13 45.36 Excise & Taxation Officer Cum Assessing Authority Ward -4 Kurukeshetra
Madhya Pradesh VAT Act 2002 Value Added Tax (VAT) 2013-14 100.51
2014-15 39.87 Appellate Deputy Commissioner of Commercial Tax Satna
2015-16 17.97
Uttar Pradesh VAT Act 2008 Value Added Tax (VAT) 2010-11 22.40
2011-12 51.34 Additional Commissioner of Commercial Tax
2012-13 18.64
Goods and Services Tax Goods and Services Tax 2018-19 2205.36 Advance Ruling of Delhi Authority
2014-15 212.06 ITAT
2012-13 154.74 Commissioner (Appeal)
2011-12 54.14
Income Tax Act 1961 Income Tax Act 2008-09 (Re-open) 226.93 Appellate Tribunal
2016-17 136.60 CIT (A)
2011-12 910.28 Delhi High Court

viii) In our opinion and according to the information and explanations given to us thecompany has not defaulted on repayment of dues to banks. Further the company has notissued any debentures during the year.

ix) During the year the company has not raised any money through initial public offeror further public offer (including debt instruments) and term loans. Therefore provisionsof clause (ix) of paragraph 3 of the Order relating to utilization of moneys raised by wayof initial public offer or further public offer including debt instruments and term loansis not applicable to the company.

x) During the course of our examination of the books and records of the company inaccordance with generally accepted auditing practices in India and according to theinformation and explanations given to us and as represented by the management no case offrauds by the company or on the company by its officers or employees has been noticed orreported during the year.

xi) The company being a Government company provisions of clause no. (xi) of para 3 ofthe Order regarding section 197 of the Companies Act 2013 relating to managerialremuneration 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 explanations given to us thecompany is not a Nidhi company and therefore the provisions of clause (xii) of para 3 ofthe Order are not applicable to the company;

xiii) According to the records of the company examined by us and the information andexplanations given to us the related party transactions entered into by the companyduring the year have been entered at arm's length basis in ordinary course of business andare in compliance with section 177 and 188 of the Companies Act 2013 and have beendisclosed in the standalone Ind AS financial statements;

xiv) According to the information and explanations given to us the company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year and accordingly the provisions of clause (xiv) ofpara 3 of the Order are not applicable to the company;

xv) The company has not entered into any non-cash transactions with directors orpersons connected with him and accordingly the provisions of clause (xv) of para 3 of theOrder are not applicable to the company;

xvi) According to the information and explanation given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Dhawan & Co.
Chartered Accountants
FRN:002864N
Sd/-
Inder Jeet Dhawan
Place : New Delhi (Partner)
Dated : May 29 2019 M. No.:081679

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF NBCC (INDIA) LIMITED (hereinafter referred to as COMPANY)

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

We have audited the internal financial controls over financial reporting of NBCC(INDIA) LIMITED as of March 31 2019 in conjunction with our audit of the standalonefinancial statements of the company for the year ended on 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.

Auditor's 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 financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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 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 2019 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 Dhawan & Co.
Chartered Accountants
FRN:002864N
Sd/-
Inder Jeet Dhawan
Place : New Delhi (Partner)
Dated : May 29 2019 M. No.:081679

ANNEXURE - C TO INDEPENDENT AUDITOR'S REPORT

Directions indicating the areas to be examined by the Statutory Auditors during thecourse of audit of annual accounts of NBCC (India) Limited for the year 2018-19 issued bythe Comptroller & Auditor General of India under Section 143(5) of the Companies Act2013

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 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. 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
FRN:002864N
Sd/-
Inder Jeet Dhawan
Place : New Delhi (Partner)
Dated : May 29 2019 M. No.:081679