Mar 31, 2023
INDEPENDENT AUDITOR''S REPORT
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Qualified Opinion
We have audited the accompanying standalone Ind AS financial statements of Dredging Corporation of India Limited,
Visakhapatnam ("the Company") which comprise the Balance Sheet as at March 31,2023, the Statement of Profit and Loss
(including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then
ended and notes to the financial statements including a summary of significant accounting policies and other explanatory
information. (Hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the
matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the
information required by the Companies Act, 2013 ("the Act'') in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,
2023 and its profit, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. As described in Note No 30.11 to the accompanying financial statements, Company has not determined the retrospective
impact of the change in Accounting Policies on the Opening balance of Other Equity and the Current and Previous reporting
periods thereby not complying with the measurement and disclosure requirements under Ind AS 8, Accounting Policies,
Changes in Accounting Estimates and Errors. In the absence of sufficient and appropriate audit evidence, we are unable to
comment on the impact thereof on the amounts reported in the Financial Statements.
2. As described in Note No 30.21 to the accompanying financial statements which states that Outstanding balances under
Trade Payables, Other Payables, Trade Receivables, TDS receivable, GST & GST ITC and Advance to Suppliers are
subject to reconciliation and confirmations thereby not complying with the measurement and disclosure requirements under
Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets and Ind AS 109, Financial Instruments. In absence of
sufficient and appropriate audit evidence, we are unable to comment on the impact thereof on the amounts reported in the
Financial Statements.
3. As stated in Note 30.20 to the accompanying financial statements an Arbitral Award for disputed payables, was passed in
favour of M/s Mercator Limited (Formerly Mercator Lines Limited) (MLL). As the company''s challenge of Award was
dismissed in multiple legal forums, MLL had filed an Execution petition before the High Court of Delhi seeking enforcement
of Arbitral Award in the year 2019. The management of the company had approached the High Court seeking time for
settlement of decretal dues with Mercator Limited (Represented by the Resolution Professional) which did not fructify.
The learned High Court had directed the company to deposit an amount of an amount of ? 5.00 crores before January 31,
2023 and a further amount of ? 8.00 crores by May 10, 2023 in view of the Company''s repeated violations of the directions
to place a proposal for deposit of the amount awarded into court. The amount disputed is to the tune of an amount of ?
45.70 Crores totalling to an amount of approximately ? 68.71 Crores including interest and other related costs. The
management of the company has concluded that no provision against the same, was required at this stage and treated the
same as contingent liability. This has resulted in overstatement of profits by ? 68.71 Crores, and understatement of trade
payables by the same extent.
4. As stated in Note no. 30.10 to the accompanying financial statements the trade receivables include a sum of ? 65.84
Crores due from M/s. Sethusamudram Corporation Ltd. (SCL), towards works executed during financial years 2005-06 to
2008-09 as has been recommended by a committee chaired by Additional Secretary and Financial Advisor (AS&FA
committee) Government of India. The committee stated that a note seeking approval of the cabinet needs to be moved by
SCL for seeking government budgetary resources for SCL to make payment of balance outstanding dues to the company.
There is a significant delay in realization of the said amount and the document evidencing the relevant budget allocation by
the Government of India is also not available yet. In view of the same the realisability of the said amount is remote. The
management has concluded that no provision against the same, was required at this stage as the same is treated as
receivable considered good though unsecured. This has resulted in overstatement of profit and receivables to the same
extent.
5. As per the information submitted to the Board of Directors in its meeting dated 08th August 2022, there are indications of
impairment in the case of DCI Dredge XVIII. As per Para 9 of Indian Accounting Standard (Ind AS) 36 on Impairment of
Assets, the Company needs to assess at the end of each reporting period whether there is any indication that an asset may
be impaired, and if any such indications exist, company shall estimate the recoverable amount of the asset. However,
Company has not estimated the recoverable amount for DCI Dredge XVIII. In the absence of adequate information, we are
unable to comment on the impact thereof on the amounts reported in the financial statements.
6. As stated in Note no. 30.18 to the accompanying financial statements, an Arbitral award issued by the Joint Arbitrator of
PMA against the company in favour of M/s Mazagon Dock Limited (MDL) on 12-06-2018 for an amount of t 15 Crores. The
company has challenged the said award before AMRDC and the matter is still pending. During the financial year 2019-20
MDL approached NCLT with a claim of ? 25.50 Crores and invoked CIRP against the Company. NCL T admitted the case
on October 24, 2019, and the CIRP proceedings are pending before NCLT. The management of the company has
concluded that no provision against the same was required at this stage and treated the same as contingent liability. This
resulted in understatement of trade payables by ? 25.50 crores, understatement of PPE by ? 13.30 Crores (approx.),
overstatement of Retained Earnings by ? 12.20 Crores (approx.) and profit by ? 0.99 Crores (approx.).
7. As stated in Note no.30.14 to the accompanying financial statements, owing to a dispute Cochin Port Trust had forfeited
the security deposit made by the company to the tune- of ? 5.59 Crores in the financial year 2020-21. The company had
accepted the conciliator''s recommendations and issued an undertaking for full and final settlement. The company, however,
continues to account for the said amount as receivable from Cochin Port Trust. As on the date of this report, company had
not recovered the said security deposit nor did it receive any positive confirmation of its release from Cochin Port Trust. The
management has concluded that no provision against the same, was required at this stage and the same is treated as
receivable considered good. This resulted in overstatement of profit and understatement of other provisions by ? 5.59
Crores.
8. As stated in Note No. 30.13 during the year, under various dredging works carried out by the company, customers have
either recovered Liquidated damages on several accounts or withheld amounts towards LD or are entitled to do the same,
as per the terms of agreement that company had entered into with respective customers totalling to the tune of ? 15.34
Crores. As on the date of this report, neither the said amounts were released nor a positive confirmation from its customers
is received regarding waiver of LD. The management has concluded that no provision against the same, was required at
this stage and the same is treated as receivable considered good. This resulted in overstatement of profit and receivables to
the same extent.
9. Company had availed ITC of GST on vendor bills/invoices- in respect of which payment is pending for more than 180
days. As per the provisions of GST, the same is to be reversed and interest is to be paid in respect of invoices pending
payment beyond 180 days. In several cases ITC had not been reversed. Further, in cases where ITC has been reversed,
interest which is payable under GST law has not been paid. In the absence of sufficient and appropriate audit evidence, we
are unable to comment on the impact thereof on the amounts reported in the Financial Statements.
10. Out of Inventory of 135.62 Crores vide Note no. 5 to the Balance Sheet, physical verification for items valuing ? 10.28
Crores at 11 locations, had not been conducted by the Company during the year. The impact of the same on amounts
stated in Financial Statements is not determinable. Further, shortages identified and reported in the physical verification to
the tune of ? 3.55 Crores had not been adjusted in the books of account. As a result, profit and inventory is overstated by ?
3.55 Crores. Even in respect of reported shortages, reconciliation for entries of regular consumptions vis-a-vis physical
verification shortages is pending, in as much we are unable to conclude that the shortages have been adequately adjusted
in the books of account and unable to comment on the impact of the same on the amounts reported in the Financial
Statements.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the
Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are
relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the
standalone financial statements.
Emphasis of Matter
We draw attention to;
a. Note No 30.17 to the financial statements regarding amounts receivable from M/s Jawaharlal Nehru Port Trust on
account of a disputed recovery made by them.
b. Note No 30.12 to the financial statements regarding the accounting treatment of Prior Period Items and the disclosure
thereof in the Current and Previous reporting periods.
Our Opinion is not modified in respect of above matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significant in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined
that there are no key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information
included in management report and chairman''s statement but does not include the financial statements and our auditor''s
report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management and those charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the
Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash flows of the company in accordance with the accounting
principles generally accepted in India, including the Accounting Standards (Ind AS) specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the company and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for
expressing our opinion on whether the company has adequate internal financial controls system in place and the
operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in
terms of sub-section ( 11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified 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 best of our knowledge and belief
were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from
our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the Cash Flow 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 the Accounting Standards prescribed
under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the Directors as on March 31,2023, taken on record by the
Board of Directors, none of the Directors is disqualified as on March 31,2023 from being appointed as a Director in terms of
Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the
operating effectiveness of such controls, refer to our separate Report in "Annexure B", and
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given
to us:
(i) The company has disclosed the impact of pending litigations on its financial position in its financial statements -
Refer Note No 30.01 (A) to the standalone financial statements.
(ii) The company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
(iii) There has been 31 days delay in transferring amounts, required to be transferred, to the Investor Education
and Protection Fund by the company.
(iv) As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable to the Company with effect
from April 1, 2023, reporting on Audit Trail in pursuance of Rule 11 (g) of the Companies (Audit and Auditors) Rule, 2014 is
considered inapplicable for the current year.
(v) (i) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity
("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether,
directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(ii) The Management has represented, that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been received by the Company from any person or entity,
including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that
the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries;
(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii)
of Rule 11 (e), as provided under (i) and (ii) above, contain any material misstatement.
(h) With respect to the other matters to be included in the Auditor''s Report in accordance 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 explanations
given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of
section 197 of the Act.
(i) As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of
sub section 5 of Section 143 of the Companies Act, 2013 we herewith enclose our report in Annexure - C".
For Rao & Kumar
Chartered Accountants
FRN 03089S
-sd-
CA Guru Prasad K C S
Partner
M.No. 215652 Place: Visakhapatnam
UDIN No: 23215652BGRPDU1292 Date: 25/05/2023
Mar 31, 2022
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Qualified Opinion
We have audited the accompanying standalone Ind AS financial statements of Dredging Corporation of India Limited, Visakhapatnam ("the Company") which comprise the Balance Sheet as at March 31,2022, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended and notes to the financial statements including a summary of significant accounting policies and other explanatory information. (Hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 ("the Act'') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022 and its profit, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
1. As described in Note No 29.13 to the financial statements, Company has not determined the retrospective impact of the change in Accounting Policies on the Opening balance of Other Equity and the Current and Previous reporting periods thereby not complying with the measurement and disclosure requirements under Ind AS 8, on Accounting Policies, Changes in Accounting Estimates and Errors. In absence of sufficient and appropriate evidence, we are unable to comment on the impact thereof on the amounts reported in the Financial Statements.
2. As described in Note No 6.1 to the financial statements, Company has not determined the impact of a pending dispute before the NCL T and a related CBI Investigation involving M/s. Van Oard India Private Limited on the Current reporting period thereby not complying with the measurement and disclosure requirements under Ind AS 37, on Provisions, Contingent Liabilities and Contingent Assets. In absence of sufficient and appropriate evidence, we are unable to comment on the impact thereof on the amounts reported in the Financial Statements.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Emphasis of Matter We draw attention to;
a. Note No 14.1 to the financial statements regarding amounts receivable from M/s Jawaharlal Nehru Port Trust on account of a disputed recovery made by them.
b. Note No 29.10 to the financial statements which states that Trade Receivables include a sum of ?6584 lakhs due from M/s Sethusamudram Corporation Limited (SCL) towards works executed during 2005-06 to 2008-09 as has been settled by a committee chaired by Additional Secretary & Financial Advisor, Ministry of Shipping, Government of India (AS & FA Committee).
c. Note No 29.1A to the financial statements regarding Arbitral Award of ? 6047 Lakhs in favour of M/s Mercator Lines Limited (MLL) the awarded amount is shown as contingent Liability. We have relied upon the legal opinions obtained by the Company from Senior Counsels.
d. Note No 29.12 to the financial statements regarding the accounting treatment of Prior Period Items to the tune of ? 692.82 lakhs and the disclosure thereof in the Current and Previous reporting periods.
e. Note No 29.14 to the financial statements which states that Outstanding balances under Trade Payables, Other Payables, Trade Receivables and Advance to Suppliers are subject to reconciliation and confirmations.
Our Opinion is not modified in respect of above matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significant in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in management report and chairman''s statement but does not include the financial statements and our auditor''s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and those charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standads (Ind AS) specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs. we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures. and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure - A" a statement on the matters specified 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 best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the Cash Flow 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 the Accounting Standards prescribed under Section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the Directors as on March 31, 2022, taken on record by
the Board of Directors, none of the Directors is disqualified as on March 31, 2022 from being appointed as a Director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure - B".
(g) With respect to the other matters to be included in the Auditor''s Report in accordance 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 explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
(i) The company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note No 29.1A to the standalone financial statements.
(ii) The company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(iii) There has been a delay of 5 days in transferring an amount of f1 .13 Lakhs, reql:lirea)o be transferred, to the Investor Education and Protection Fund by the company.
(iv) (a) The respective Management of the Company, whose financial statements have been audited under the Act, have represented to us that, to the best of their knowledge and belief, other than as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company, ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The respective Management of the Company, whose financial statements have been audited under the Act, have represented to us that, to the best of their knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances performed by us on the Company whose financial statements have been audited under the Act, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and {b) above, contain any material misstatement.
(v) As stated in Note to the standalone financial statements
(a) No dividend is proposed in the previous year, declared or paid by the Company during the year.
(b) The Board of Directors of the Company have not proposed any final dividend for the year which is subject to the
approval of the members at the ensuing Annual General Meeting.
As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of sub
section 5 of Section 143 of the Companies Act, 2013 we herewith enclose our report in "Annexure -C".
For Rao & Kumar Chartered Accountants FRN 03089S
Place: Visakhapatnam Anirban Pal
Date: 30/05/2022 Partner
MN No.214919
Mar 31, 2021
Report on the Audit of the Ind AS Financial Statements Opinion
We have audited the accompanying Ind AS financial statements (âfinancial statements") of Dredging Corporation of India Limited (âthe Companyâ) which comprise the Balance Sheet as at 31s March2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of changes in equity and the Statement of Cash Flows for the year then ended, and Notes to the financial statements, including a summary of the Significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 ("Actâ), in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2021 and the profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
1. Revenue Recognition:
The company executed different types of dredging contracts. Each type of contract has various clauses in the agreement for determining the milestones quantity executed for the purpose of arriving at the transaction price for the performance obligation based on the survey, stages of completion and also has clauses relating to various deductions that are made from the Bills. The estimate of works executed which is based on quantitative and qualitative parameters for both billed and unbilled Operational Income for the purpose of determining the Revenue Recognition and deductions involves high degree of Management judgment and assessment. Thus Revenue Recognition is a Key Audit Matter,
Auditor''s Response:
Our audit approach included an analysis is of systems and procedures as under:
⢠Reviewed the Accounting Principles and Internal Assessment procedure adopted by the company for recognition of Revenue.
⢠Analysed for the Performance obligations, milestones and Surveys and identified the Transaction price with the data available and also considering the terms and conditions stipulated in the contract agreement. Evaluated subsequent output technical data and receipts after the reporting date wherever available.
⢠Compared the outcomes as above with the performance obligations and Transaction Price recorded by the Company.
⢠Performed Analytical Procedures to assess the reasonableness of the basis for revenue recognition.
Emphasis of Matter
We draw attention to the following matters in the notes to the financial statements. Our opinion is not modified in respect of these matters.
a) Note No 26(10) to the financial statements which states that Trade Receivables include a sum of Rs. 8584 lakhs due from M/s Sethusamudram Corporation Limited (SCL) towards works executed during 2005-06 to 2008-09 as has been settled by a committee chaired by Additional Secretary & Financial Advisor, Ministry of Shipping, Government of India (AS & FA Committee). The Committee stated that a Note seeking approval of the Cabinet needs to be moved for seeking Government Budgetary resources for SCL to make payment of balance outstanding dues to the Company.
b) Note No 26(21) to the financial statements which states that, the construction of Administrative Office Building was completed in all respects during the year. The Company capitalised the entire cost incurred under "Buildings" without bifurcating the respective cost incurred for "Furniture, Fittings and Equipment" since relevant break up data is under finalisation by the Contractor. The Company will make necessary changes under "Buildings" account on receipt of final Bill of Quantities from the Contractor. In this respect, the provisions of Ind AS 16 have not been followed. Depreciation has been provided at the rate applicable to ''Buildings'' resulting in consequential difference in amount of depreciation, the impact of which as per the Management is not material and we have relied on the same.
c) Note No 26(J2) to the financial statements which states that Outstanding balances under Trade Payables, Other Payables, Trade Receivables and Advance to Suppliers are subject to reconciliation and confirmations, the impact of which is not ascertainable.
d) Note No 26(1) to the financial statements regarding Arbitral Award of Rs.60.47 Crores in favour of M/s Mercator Lines Limited (MLL). The Company has challenged the Arbitral Award before the High Court of Delhi and also before the jurisdictional High Court of Justice, Business and Property Courts of England and Wales, Commercial Court and the same have been dismissed. MLL filed Execution Petition before the High court of Delhi seeking execution/ enforcement of Arbitral Awards. DCI has contested the Award under section 48 of the Arbitration and conciliation Act 1996, while praying for rejecting the execution petition of MLL on the ground that the Award is contrary to the public policy of India and also on the ground that arbitral procedure was not in accordance with the agreement of parties, particularly LMAA Rules. According, the said Arbitral Award is shown as contingent Liability. We have relied upon the legal opinions obtained by the Company from Senior Counsels.
e) Note No 26(21) to the financial statement which tales that Company carried out Physical stock verification during the year and could not carry out physical stock verification during the Financial Year 2019-20 due to COVID pandemic. The difference between physical stock and book stock amounting to Rs. 36.91 Crores has been charged to the profit and loss account.
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis Board''s Report including Annexures to Board''s Report Corporate Governance and Shareholder''s Information, but does not include the financial statements and our auditor''s report thereon. The said reports are expected to be made available to us after the date of this audit report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
When we read the given reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Management''s Responsibility for the Financial Statements
The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable; matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the company''s financial reporting process.
Auditorâs Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue auditor''s report that includes our opinion. Reasonable assurance is a high of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
a. Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the company to cease to continue as a going concern.
e. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent .the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Matters
We did not audit the financial statements of branch at Bangladesh included in the annual financial results of the Company which reflect total assets of Rs. 209 lakhs as at 31st March 2021 and total revenue of Rs. NIL for the year ended on that date, as considered in the financial statements. The financial statements of this branch have not been audited and have been incorporated based on management certified accounts. Our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the financial statements certified by the Management. Our opinion is not modified in respect of this 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 Companies Act, 2013, we give in the "Annexure A " a statement on the matters specified 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 best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books.
c. The Balance Sheet, the Statement of Profit and Loss (including Other comprehensive Income), the Statement of Changes in Equity and the Statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid lnd AS financial statements comply with the Accounting Standards specified under section 133 of the Act.
e. On the basis of written representations received from the directors on 31 march 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the company and the operating effectiveness of such controls, refer to our separate Report in Annexure B
g. With respect to the other matters to be included in Auditors'' Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the Company being a Government Company, Section 197 of the Act related to managerial remuneration is not applicable in accordance with exceptions, medications and adaptations provided vide notification No. G.S.R. 463 (E) dated June 5, 2015 issued by the Ministry of Corporate Affairs.
h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, (as amended) in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26(1)(A) to the financial statements;
ii. The company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
3. As required under the directions and sub-directions issued by the Comptroller and Auditor General of India in terms of Sub-section (5) of Section 143 of the Companies Act 2013, we are enclosing our report in "Annexure C".
For Sriramamurthy & Co Chartered Accountants FRN 003032S
Place: Visakhapatnam Partner
Date: 29th July 2021 No: 227878
Mar 31, 2018
INDEPENDENT AUDITORSâ REPORT_
To
The Members of
DREDGING CORPORATION OF INDIA LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of DREDGING CORPORATION OF INDIA LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including other comprehensive income), statement of cash flows and statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as âStandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules there under.
This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS of the financial position of the Company as at March 31, 2018, its financial performance including other comprehensive income, its cash flows and changes in equity for the year ended on that date.
Emphasis of Matters:
We draw attention to the following matters in the Notes to the financial statements. Our opinion is not qualified in respect of this matter.
a) Trade Receivables includes, Rs,11,433.18 lakhs receivable from M/s Sethusamudram Corporation Ltd (SCL) which is pending for more than 4 years. Out of the above, Company has provided for doubtful debts to the extent of Rs,3019.27 lakhs. The company is of the view that this will be reimbursed by GOI (at whose behest the contract with SCL was entered)to DCI to compensate the actual expenditure incurred on this project. In view of this, a provision for doubtful debts is not made in respect of receivables in this regard amounting to Rs,8413.91 lakhs.
b) The balances of sundry debtors, creditors, loans and advances, other receivable and other payables being subject to confirmation and reconciliation resulting in the balances as per books of account not verified by us.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 best of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, Cash Flow Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with relevant rule issued there under.
e) On the basis of written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 27 the standalone Ind AS financial statements.
ii. The company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.
iii. There are no delays in transferring amounts, required to be transferred to the Investor Education and Protection fund by the company during the year and
3. Directions under section 143(5) of the Companies Act. 2013 are form part of this report.
ANNEXURE A TO AUDITORâS REPORT
The Annexure referred to in Independent Auditor''s Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2018, we report that:
(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) According to the explanation and information provided by the company, that the Company has carried out physical verification of spares on board dredgers. It was informed that the company is in the process of reconciling the excess/ deficit stock. Hence we are unable to comment on this at the moment.
(iii) According to the information and explanations given to us and based on our examination of the records of the company that the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provide guarantees and accordingly the clause 3 (iv) of the Companies (Auditors Report) Order, is not applicable to the Company.
(v) According to the information and explanations given to us that the company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed thereunder.
(vi) To the best of our knowledge, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Act in respect of the nature of business carried on by the Company.
(vii) According to the information and explanations given to us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, sales tax, Service Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Income Tax, GST, Service Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2018 for a period of more than six months from the date they became payable.
(c) There are no dues in respect of Income Tax, GST, Service Tax, Customs Duty and Value Added Tax as on 31 March, 2018 on account of disputes.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks, financial institutions and government.
(ix) During the period the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) According to the information and explanations given to us and to the best of our knowledge and belief no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of the audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company, hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the company, the Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year. Accordingly the clause 3 (xiv) of Companies (Auditors Report) Order, 2016 is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the clause 3 (xv) of the Companies (Auditors Report) Order, is not applicable to the Company.
(xvi)The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.
Annexure- b to the Auditorsâ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of DREDGING CORPORATION OF INDIA LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Tukaram & Co
Chartered Accountants
[Firm Regn No. 004436S]
Place : New Delhi (P.MURALI)
Date : 28-05-2018 Partner : Membership No. 221625
Mar 31, 2017
TO
THE MEMBERS OF
DREDGING CORPORATION OF INDIA LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of DREDGING CORPORATION OF INDIA LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss (including other comprehensive income), statement of cash flows and statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as âStandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules there under.
This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS of the financial position of the Company as at March 31, 2017, its financial performance including other comprehensive income, its cash flows and changes in equity for the year ended on that date.
Emphasis of Matters:
We draw attention to the following matters in the Notes to the financial statements. Our opinion is not qualified in respect of this matter.
a) Componentization: (Refer Note No. 3 of the financial statements)
As per note 4 of Schedule II to the Companies Act, 2013 -ââUseful life specified in Part C of the Schedule is for whole of the asset. Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately.â
The above requirement is commonly known as âcomponent accountingâ. Companies are required to identify and depreciate significant components with different useful lives separately.
However management is of the view that no component is having more than 10% value of total cost of the dredger hence component accounting is not applicable.
b) Trade Receivables includes, ''11,433.18 lakhs receivable from M/s Sethusamudram Corporation Ltd (SCL) which is pending for more than 4 years. Out of the above, Company has provided for doubtful debts to the extent of '' 3019.27 lakhs. The company is of the view that this will be reimbursed by GOI (at whose behest the contract with SCL was entered)to DCI to compensate the actual expenditure incurred on this project. In view of this, a provision for doubtful debts is not made in respect of receivables in this regard amounting to ''8413.91 lakhs.
c) The balances of sundry debtors, creditors, loans and advances, other receivable and other payables being subject to confirmation and reconciliation resulting in the balances as per books of account not verified by us.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
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 best of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, Cash Flow Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with relevant rule issued there under.
e) On the basis of written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements
â Refer Note to the standalone Ind AS financial statements.
ii. The company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any,on long term contracts including derivative contracts â Refer Note to the standalone Ind AS financial statements.
iii. There are no delays in transferring amounts, required to be transferred to the Investor Education and Protection fund by the company during the year and
iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holding as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note to the standalone Ind AS financial statements.
3. Directions under section 143(5) of the Companies Act. 2013 are form part of this report.
ANNEXURE A TO AUDITORâS REPORT
The Annexure referred to in Independent Auditorâs Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2017, we report that:
(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii)According to the explanation and information provided by the company, that the Company has carried out physical verification of spares on board dredgers. It was informed that the company is in the process of reconciling the excess/ deficit stock. Hence we are unable to comment on this at the moment.
(iii) According to the information and explanations given to us and based on our examination of the records of the company that the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provide guarantees and accordingly the clause 3 (iv) of the Companies (Auditors Report) Order, is not applicable to the Company.
(v) According to the information and explanations given to us that the company has not accepted any deposit from the public pursuant to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under.
(vi) To the best of our knowledge, the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Act in respect of the nature of business carried on by the Company.
(vii)According to the information and explanations given to us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, sales tax, Service Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Income Tax, Service Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2017 for a period of more than six months from the date they became payable.
(c) There are no dues in respect of Income Tax, Service Tax, Customs Duty and Value Added Tax as on 31 March, 2017 on account of disputes.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks, financial institutions and government.
(ix) During the period the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) According to the information and explanations given to us and to the best of our knowledge and belief no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of the audit.
(xi) According to the information and explanations given to us and based on our examination of the records of the company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company, hence clause 3(xii) of Companies (Auditors Report) Order 2016 is not applicable to the company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the company, transactions with the related parties are in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the company, the Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year. Accordingly the clause 3 (xiv) of Companies (Auditors Report) Order, 2016 is not applicable to the Company.
(xv) According to the information and explanations given to us and based on our examination of the records of the company, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly the clause 3 (xv) of the Companies (Auditors Report) Order, is not applicable to the Company.
(xvi) The nature of business and the activities of the Company are such that the Company is not required to obtain registration under section 45-IA of the Reserve Bank of India Act 1934.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of DREDGING CORPORATION OF INDIA LIMITED (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Tukaram & Co
Chartered Accountants
[Firm Regn No. 004436S]
Place : Delhi (P.MURALI )
Date : 29-05-2017 Partner :
Membership No. 221625
Mar 31, 2015
We have audited the accompanying financial statements of Dredging
Corporation of India Limited ('the Company') which comprise the Balance
Sheet as at March 31, 2015, the Statement of Profit and Loss and the
Cash Flow statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
2. Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("The Act")with respect to
the preparation of these financial statements that give a true and fair
view of the financial position, financial performance and cash flows of
the Company in accordance with the Accounting principles generally
accepted in India including the Accounting Standards specified under
the section 133 of the Act, read with Rule 7 of the Companies
(accounts) Rules, 2014. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions of the
Act for safeguarding the Assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
the appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; design implementation and maintenance
of adequate internal financial controls that were operating effectively
for ensuring the accuracy and completeness of the accenting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the Accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143 (10) of the Act. Those standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial control system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by Company's Directors , as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
4. Opinion
I. Basis for Qualified Opinion:
The Company had not complied with the provisions of Section 135, 149
(1),149(4) 177 and 178 of the Companies Act, 2013. At this stage, we
are unable to comment on the consequential impact of non-compliance of
these provisions, if any.
Qualified Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the matter
described in the Basis for Qualified opinion paragraph, the aforesaid
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March, 2015, and its Profit and its
cash flows for the year ended on that date.
EMPHASIS OF MATTERS:
We draw attention to the following matters in the Notes to the
financial statements:
a) We draw attention to the Note No. VI of the financial statements,
where in the Company has made investments in Equity shares amounting to
Rs.3,000 lakhs in Sethusamudram Corporation Limited (SCL), a special
purpose vehicle was incorporated on 06.1.2004 for developing the
Sethusamudram Channel Project. The dredging work at Palk Strait was
suspended from 16- 07-2009. The management does not consider any
diminution in the value of the investment and the same has been carried
at cost. With regard to the previous statutory auditors qualification
in this respect on the accounts for the financial year 2012-13,
National Stock Exchange of India Ltd. (NSE) vide its letter No.
NSE/LIST/8500 dated 26/12/2014 advised the Company to restate the
financial statements for FY 2012-13. In response Company has filed
review petition dated 21/01/ 2015 to the NSE to review its decision.
We were informed that, SEBI has given personal hearing on the review
petition filed by the DCI and decision from the SEBI is awaited, hence
the provision for diminution on investment is not made.
b) Trade Receivables includes, Rs.11,433.18 lakhs receivable from M/s.
Sethusamudram Corporation Ltd. (SCL) which is pending for more than 3
years. Out of the above, Company has provided for doubtful debts to the
extent of Rs.3019.27 lakhs. The Company is of the view that an amount of
Rs.30897.00 lakhs will be reimbursed by GOI (at whose behest the contract
with SCL was entered) to DCI to compensate the actual expenditure
incurred on this project. In view of this, a provision for doubtful
debts is not made in respect of receivables in this regard amounting to
Rs.8413.91 lakhs.
c) DCI acquired Dredge XVIII from Mazagon Dock Limited, Mumbai (MDL) in
Jan 2011 with performance Bank Guarantee of Rs.27 cr. Since there were
major guarantee defects and MDL was failed to attend the performance
defects, BG of Rs.27 cr. has been invoked by the DCI. DCI had entered
into new agreement with L&T for Rs.30 cr. to remedy the manufacturing
defects and Rs.20 cr. has been capitalized during the current financial
year.
d) The balance of sundry debtors, creditors, loans and advances, other
receivables and other payables being subject to confirmation and
reconciliation resulting in the balances as per books of account not
verified by us.
5. Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government in terms of section 143 of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 3 and 4 of the Order.
ii) 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 best of our knowledge and belief were necessary for the
purpose of our audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the afore said financial statements comply with the
accounting standards specified under section 133 of the Act, read with
rule 7 of the Companies (Accounts) Rules, 2014.
e. On the basis of the written representation received from the
directors as on 31 March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
f. With respect to the other matters to be included in the Auditor's
report in accordance with rule 11 of the companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
* The company has disclosed the impact of pending litigations on its
financial position in its financial statements- refer note XVI 5b-5e to
the financial statements;
* The company did not have any long term contracts including derivative
contracts for which there were any material foreseeable losses.
* There are no amounts which are required to be transferred to the
Investor Education and Protection Fund by the company.
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in Paragraph 1under "Report on other Legal and Regulatory
requirements" section of our report of even date) (i) In respect of its
fixed assets:
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
management in accordance with a regular program of verification which
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(ii) In respect of its inventory:
(a) Records evidencing the physical verification of inventories are not
provided to us, hence, we are not able to comment on physical
verification of inventories.
(iii) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 189 of the Act. Accordingly, the provisions of Clause 3
(iii) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to the purchase of inventory and fixed assets and
for the sale of goods and services. During the course of our audit, we
have not observed any major weakness in such internal control system.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge, the Central Government has not
prescribed maintenance of the cost records under Section 148 (1) of the
Act in respect of the nature of business carried on by the Company.
(vii) According to the information and explanations given to us, in
respect of Statutory Dues,
(a) The Company has generally been regular in depositing undisputed
statutory dues including Provident Fund, Income Tax, Service Tax, Duty
of Customs,Value Added Tax, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Income Tax,
Service Tax, Duty of Customs,Value Added Tax, Cess and other material
statutory dues in arrear, as at March 31, 2015 for a period of more than
six months from the date they became payable.
(c) According to the information and explanations provided by the
management, there are dues in respect of Service Tax given below, which
have not been deposited on account of dispute :
Name of the Nature of Amount Period to which
statute dues (Rs,in lakhs) relates to
6243.32 2005-2010
Finance Act,1994 Service Tax 728.66 2010-2011
318.87 2005-2008
206.95 2011-2012
19.32 2007-2008
Name of the Pending before Remarks
CESTAT, Bangalore Non-eligibility of Cenvat
Finance Act,1994
Service Tax CESTAT, Bangalore Credit in respect of Dredger
CESTAT, Bangalore and spare parts but disputed
CESTAT, Bangalore by Company
CESTAT, Bangalore Penalty on account of delay in
payment of service tax but
disputed by Company
(d) We are informed that there are no amounts which are required to be
transferred to Investor Education and Protection Fund in accordance
with the relevant provisions of the Companies Act 1956. Accordingly,
the provisions of Clause 3 (vii) (c) of the Order are not applicable to
the Company.
(viii) The Company has no accumulated losses at the end of the
financial year and it has not incurred cash losses in the current and
immediately preceding financial year.
(ix) In our opinion, and according to the information and explanations
given to us, the company has not defaulted in the repayment of dues to
Banks, debenture holders and financial institutions.
(x) According to the information and explanations given to us, the
company has not given guarantees for loans taken by others from Banks
and financial institutions.
(xi) In our opinion, and according to the information and explanations
given to us, no fresh term loans have been obtained by the Company,
accordingly, the provisions of Clause 3 (xi) of the Order are not
applicable to the Company.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the company has been noticed or reported during the year.
For Tukaram & Co
Chartered Accountants
[Firm Regn No. 004436S]
-sd-
Place : Hyderabad (P.MURALI )
Date : 26.05.2015 Partner : Membership No. 221625
Mar 31, 2014
1. Report on the Financial Statements
We have audited the accompanying financial statements of Dredging
Corporation of India Limited (''the Company'') which comprise the Balance
Sheet as at March 31, 2014, the Statement of Profit and Loss and the
Cash Flow statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the companies Act,2013. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
3. Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit modified audit
opinion(Qualified opinion & Disclaimer of opinion).
4. Opinion
I. Basis for Qualified Opinion:
We draw attention to the Note VI to the financial statements wherein
the company has not recognized impairment of long-term investments of
Rs. 3,000 lacs (Last year: Rs. 3,000 lacs) in M/s Sethusamudram
Corporation Limited (SCL); which is not in accordance with para 17 of
"AS- 13 Accounting for Investments" as prescribed under sub-section 3C
of the section 211 of the companies Act 1956 read with the General
Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act,2013["Act"]. The
decline in investment value (other than temporary), is envisaged with
reference to Investee''s assets and results , prolonged litigation ,
expected cash flows, restrictions on distributions by investee or
disposal by Investor etc.
The above note was carried by way of Qualified Opinion for the year
ended Mar31,2013 whereby it was stated that had such provision as
stated in paragraph 4(a) been recognized, the profits of the company
for the year ended 31st March 2013 and the reserves of the company as
31st March 2013 would have been lower by Rs. 3,000 lakhs; thereby
resulting in net loss of Rs. 949.10 Lakhs for the year ending March31,
2013.
Though reported profits for the current year ended March31, 2014
remains unaffected, yet Shareholders'' Funds which stood at Rs.
1,39,540.61 lacs as at that date would be lower by Rs. 3,000 lacs.
Qualified Opinion:
In our opinion, and to the best of our information and according to the
explanations given to us, subject to the effect of our remark in
paragraph 4(I) in respect of the corresponding figures for the year
ended March 31, 2013 of the adjustments , if any , to the results of
operations for the year ended March 31, 2013 and to the state of
affairs as on that date, the said financial statements read together
with the other notes thereon give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India:
i. in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2014;
ii. in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
iii. in the case of the cash flow statement, of the cash flows for the
year ended on that date.
II Basis of Disclaimer of Opinion:
Of the company''s fixed assets which are carried in the balance sheet ,
the company has not provided for impairment loss on Dredger XVIII [book
value / carying amount as on March 31,2014: Rs. 21,266.19 lacs] which
was acquired in January 2011 but was not in use since March 2012 on
account of technical defects and design flaws. Non provision of
impairment loss is a departure from AS-28" Impairment of Assets" as
prescribed under the Act. Management was unable to provide an
Independent Expert''s Technical Evaluation Report as also, a valuation
Report in order to arrive at the fair value and , consequently,
quantify the possible impairment loss of the dredger. As a result , we
were unable to quantify the impairment loss in respect of the said
asset.
Disclaimer of Opinion:
Because of the significance of the matters described in the basis for
Disclaimer of Opinion paragraph , we have not been able to obtain
sufficient appropriate audit evidence to provide a basis for an audit
opinion. Accordingly, we do not express an opinion on the said matter.
III. Emphasis of Matters:
We draw attention to note X - " Trade Receivables" to the financial
statements which describes the Uncertainty a to timing of recovery of
debts from M/s Sethusamudram Corporation Ltd.(SCL) amounting to Rs.
11,433.18 lakhs in respect of which the company has not provided for
doubtful debts for Rs. 8,413.91 lakhs on its trade receivables of Rs.
11,433.18 Lakhs (Last year : Rs. 11,878 Lakhs) due from M/s SCL -
against which the company had already made a part provision of Rs.
3,019.27 lakhs in earlier years. Owing to certain recent developments
in its favour, the company is confident of recovering the receivables
from Government, at whose behest the contract with SCL was entered
into.
We do not offer a qualified opinion in respect of the above matter.
5. Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
ii) As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, subject to our remark in paragraph 4(I) &4 (II)
above, the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement comply with the Accounting Standards referred to in the Act;
and
e. the provisions of Section 274(1)(g) of the Companies Act, 1956 are
not applicabe to this Company vide number 2/5/2001- CL-V: General
Circular No.8/2002 dated 22-03-2002 issued by Ministry of Law, Justice
and Company Affairs, Department of Company Affairs.
ANNEXURE TO INDEPENDENT AUDITORS'' REPORT
Referred to in Paragraph 1 under the heading of "Report on other Legal
and Regulatory requirements" of our report of even date
(i) In respect of its fixed assets:
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its
fixed assets by which fixed assets are verified in a phased manner.
Accordingly, certain fixed assets have been verified during the year
and as informed to us, no material discrepancies were noticed on such
verification.
(c) The Company has not disposed off substantial part of the fixed
assets during the year and the going concern status of the Company is
not affected.
(ii) In respect of its inventories:
(a) Physical verification of inventory has been conducted by the
management at reasonable intervals during the year; except in case of
Stock of stores/spares-in-transit.
(b) In respect of procedure of physical verification of Stock of stores
/ spares-in-transit followed by the management, the same needs
substantial improvement, which should commensurate with the size of the
Company and the nature of its business.
(c) Except in case of stock of stores/spares-in-transit, the Company
has maintained proper records of Inventory; and as informed to us, no
material discrepancies were noticed on physical verification as
compared to the book records.
(iii) In respect of loans granted and taken to / from parties covered
in the register maintained u/s 301 of the Companies Act, 1956 ("the
Act")
(a) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s 301 of the Act.
(b) The company has not taken any loans, secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(iv) In respect of internal control
In our opinion and according to the information and explanations given
to us, there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business for the purchase
of inventory and fixed assets and for sale of goods and services.
However, our test checks revealed weaknesses in the internal control
system which requires that substantial improvement viz. omission of
entries, lack of checks/controls to prevent omission/duplication of
entries, delay in quarterly provisions etc.
(v) In respect of contracts or arrangements need to be entered into a
register maintained u/s 301 of the Act.
According to the information and explanations given to us, there were
no contracts or arrangements referred to in Section 301 of the Act that
need to be entered into the Register required to be maintained in
pursuance of Section 301 of the Act. In view of the above, clause
4(v)(b) is not applicable.
(vi) In respect of deposits from public
The Company has not accepted any deposits from the public during the
year.
(vii) In respect of internal audit system: In our opinion, although the
company has an internal audit system commensurate with its size and
nature of its business; yet the same needs to be transformed from a
transaction-based audit into risk-based audit and focus on internal
controls, risk assessment, risk mitigation plans etc. Further, it was
observed that, Management, in majority of cases, has neither furnished
replies to audit queries/findings nor has initiated any action on them.
(viii) In respect of maintenance of cost records
To the best of our knowledge, the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Act in
respect of the nature of business carried on by the Company.
(ix) In respect of statutory dues
(a) The Company is generally regular in depositing the undisputed
statutory dues including Provident Fund, Investor education and
protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Cess and any other statutory dues with the appropriate
authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of aforementioned dues were in
arrears, as at March 31, 2014 for the period of more than six months
from the date they became payable.
(b) As at March 31 2014, according to the records of the company and
information an explanations given to us, the following are the
particulars of dues on account of Service tax matters that have not
been deposited on account of any dispute :
Name of the Nature of dues Amount Period to which the
statute (Rs. in lakhs) amount relates
Various years covering
the period
6243.32 2005-2010
Finance Act,1994 Service Tax 728.66 2010-2011
318.87 2005-2008
206.95 2011-2012
19.32 2007-2008
TOTAL 7517.12
Name of the Forum where Subject matters
statute pending
CESTAT, Bangalore Non-eligibility of Cenvat
Finance Act,1994 CESTAT, Bangalore Credit in respect of Dredger
CESTAT, Bangalore and spare parts but disputed
CESTAT, Bangalore by Company
CESTAT, Bangalore Penalty on account of delay in
payment of sevice tax but
disputed by Company
(x) In respect of accumulated losses and cash losses
The Company has no accumulated losses and has not incurred cash losses
during the financial year covered by our audit and in the immediately
preceding financial year.
(xi) In respect of dues to financial institution / banks / debentures
The company has not defaulted in repayment of dues to financial
institutions or banks.
(xii) In respect of loans and advances granted on the basis of security
The company has not granted loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) In respect of provisions applicable to Chit fund
The Company is not a chit fund or a nidhi or mutual benefit fund /
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor''s Report) Order, 2003 are not applicable to the company.
(xiv) In respect of dealing or trading in shares, securities,
debentures and other investment
The company has not been dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
(xv) In respect of guarantee given for loans taken by others
The company has not given any guarantee for loans taken by others from
banks or financial institutions. Therefore, the provisions of clause
4(xv) of the Companies (Auditor''s Report) Order, 2003 are not
applicable to the company.
(xvi) In respect of application of term loans
The company has availed External Commercial Borrowings (ECB) term loans
during the year for acquisition of Dredgers and the term loans were
utilized for the purpose for which they were obtained.
(xvii) In respect of fund used
The company has not raised any funds on short-term basis or long-term
basis during the year and therefore, the provisions of clause 4(xvii)
of the Companies (Auditor''s Report) Order, 2003 are not applicable to
the company.
(xviii) In respect of preferential allotment of shares
The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained u/s 301 of the
Act, during the year.
(xix) In respect of securities created for debentures
The company has not issued any debentures during the year.
(xx) In respect of end use of money raised by public issues
We have verified the end use of money raised by public issue as
disclosed in Note to Accounts.
(xxi) In respect of fraud
In our opinion and according to the information and explanations given
to us, no fraud on or by the Company has been noticed or reported
during the year that causes the financial statements to be materially
mis-stated.
For G.R.KUMAR & Co. LLP
Chartered Accountants
[Firm Regd No. 004941S]
( CA N.S.S.H.Bhaskar )
Partner : M. No. 204962
Place : Visakhapatnam
Date : 28th May, 2014
Mar 31, 2013
1. Report on the Financial Statements
We have audited the accompanying financial statements of Dredging
Corporation of India Limited (''the Company'') which comprise the Balance
Sheet as at March 31'' 2013'' the Statement of Profit and Loss and the
Cash Flow statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position''
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act'' 1956 ("the ActÂ). This responsibility includes
the design'' implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement''
whether due to fraud or error.
3. Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment'' including the
assessment of the risks of material misstatement of the financial
statements'' whether due to fraud or error. In making those risk
assessments'' the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management'' as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
4. Opinion
We draw attention to the following Note:- (I) The Company has not
recognized impairment of long term investments of Rs.3''000 lacs (Last
year : Rs.3000 lacs) in M/s. SCL; which is not in accordance with para 17
of "AS-13 Accounting for investments as prescribed under sub-section
3C of section 211 of the Act. The decline in investment value (other
than temporary)'' is envisaged with reference to Investee''s assets and
results'' prolonged litigation'' expected cash flows'' restrictions on
distributions by Investee or disposal by Investor etc.
Had such provision been recognized'' the profits of the Company for the
year ended 31st March'' 2013 and the reserves of the Company as at 31st
March'' 2013 would have been lower by ''Rs.3''000 lacs; thereby resulting in
net loss of Rs.949.10 lacs. In our opinion'' subject to our remark in
paragraph 4(I) above the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the balance sheet'' of the state of affairs of the
Company as at March 31'' 2013;
(b) in the case of the statement of profit and loss'' of the profit for
the year ended on that date; and
(c) in the case of the cash flow statement'' of the cash flows for the
year ended on that date
5. Report on Other Legal and Regulatory Requirements
i) As required by the Companies (Auditor''s Report) Order'' 2003 ("the
OrderÂ)'' as amended'' issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act'' we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order. ii) As required by section 227(3) of the Act'' we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit; b.in our opinion proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books; c. the Balance Sheet'' Statement of Profit and Loss and
Cash Flow Statement dealt with by this Report are in agreement with the
books of account; d.in our opinion'' subject to our remark in paragraph
4(I) above'' the Balance Sheet'' Statement of Profit and Loss and Cash
Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act'' 1956; and
e. the provisions of Section 274(1)(g) of the Companies Act'' 1956 are
not applicabe to this Company vide number 2/5/2001- CL-V: General
Circular No.8/2002 dated 22-03-2002 issued by Ministry of Law'' Justice
and Company Affairs'' Department of Company Affairs.
ANNEXURE TO AUDITORS'' REPORT
(Referred to in paragraph (3) of our Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management during the year in a phased manner. As informed to us'' no
material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of the fixed
assets during the year and the going concern status of the company is
not affected.
(ii) (a) Physical verification of inventory has been conducted by the
management at reasonable intervals during the year; except in case of
Stock of stores/ spares-in-transit.
(b) In respect of procedure of physical verification of stock of
stores/spares-in-transit followed by the management'' the same needs
substantial improvement'' which should commensurate with the size of the
Company and the nature of its business.
(c) Except in case of stock of stores/spares-in-transit'' the Company
has maintained proper records of inventory; and as informed to us'' no
material discrepancies were noticed on physical verification as
compared to the book records.
(iii) (a) The Company has not granted any loans'' secured or unsecured
to companies'' firms or other parties covered in the register maintained
under section 301 of the Companies Act'' 1956. (b) The Company has not
taken any loans'' secured or unsecured from companies'' firms or other
parties covered in the register maintained under section 301 of the
Companies Act'' 1956. (iv) In our opinion and according to the
information and explanations given to us'' there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business for the purchase of inventory and fixed assets
and for sale of goods and services. (v) According to the information
and explanations given to us'' there were no contracts or arrangements
referred to in Section 301 of Companies Act'' 1956 that need to be
entered into the Register required to be maintained in pursuance of
Section 301 of the Companies Act'' 1956.
In view of the above'' Clause 4 (v) (b) is not applicable. (vi) The
Company has not accepted any deposits from the public during the year
(vii) In our opinion'' although the Company has an internal audit system
commensurate with its size and nature of its business; yet the same
needs to be transformed into risk-based audit and focus on ineternal
controls'' risk assessment'' risk mitigation plans etc. (viii) To the
best of our knowledge the Central Government has not prescribed
maintenance of cost records under Section 209(1)(d) of the Companies
Act'' 1956 in respect of the nature of business carried on by the
Company. (ix) (a) The Company is generally regular in depositing the
undisputed statutory dues including Provident Fund'' Investor Education
and Protection Fund'' Income Tax'' Sales Tax'' Wealth Tax'' Service Tax''
Customs Duty'' Cess and any other statutory dues with the appropriate
authorities. According to the information and explanations given to us''
no undisputed amounts payable in respect of aforementioned dues were in
arrears'' as at March 31'' 2013 for the period of more than six months
from the date they became payable.
(x) The Company has no accumulated losses and has not incurred cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
(xi) The Company has not defaulted in repayment of dues to financial
institutions or banks. As the due date of repayment of bonds do not
fall in this year'' the question of repayment does not arise. (xii) The
Company has not granted loans and advances on the basis of security by
way of pledge of shares'' debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore'' clause 4(xiii) of the Companies (Auditor''s
Report) Order'' 2003 is not applicable to the company.
(xiv) The Company has not been dealing or trading in shares''
securities'' debentures and other investments. Therefore'' clause 4(xiv)
of the Companies (Auditor''s Report) Order'' 2003 is not applicable to
the Company.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions. Therefore'' clause 4(xv) of the
Companies (Auditor''s Report) Order'' 2003 is not applicable to the
Company.
(xvi) The Company has availed External Commercial Borrowings (ECB) term
loans during the year for acquisition of Dredgers and the term loans
were utilised for the pupose for which they were obtained.
(xvii) The Company has not raised any funds on short-term basis or
long-term basis during the year and therefore'' clause 4(xvii) of the
Companies (Auditor''s Report) Order'' 2003 is not applicable.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act'' 1956.
(xix) The Company has issued tax free'' secured'' non-convertible and
redeemable bonds of Rs.1000 each amounting Rs.5887.80 lakhs.
The bonds are fully secured by way of charge on DCI Back-Hoe Dredger.
(xx) We have verified the end use of money raised by public issue as
disclosed in Note to Accounts. (xxi) In our opinion and according to
the information and explanations given to us'' no fraud on or by the
Company has been noticed or reported during the year that causes the
financial statements to be materially misstated.
For G.R.Kumar & Co.
Chartered Accountants
Firm Reg No. 004941S
sd/-
(CA G.R.KUMAR)
Place : Visakhapatnam Partner
Date : 18.06.2013 Membership No. 052367
Mar 31, 2012
1. We have audited the attached Balance Sheet of DREDGING CORPORATION
OF INDIA LIMITED, VISAKHAPATNAM as at 31st March, 2012 and also the
Statement of Profit and Loss of the Company for the year ended on that
date annexed thereto and the Cash Flow Statement for the year ended on
that date. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes assessing the accounting principles used and significant
estimates made by the management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis of our opinion.
3. As required by the Companies (Auditor's Report), 2003 issued by the
Central Government of India in terms of sub-section (4A) of Section 227
of the Companies Act, 1956, we enclose in the Annexure hereto a
statement on the matters specified in paragraph 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(ii) In our opinion, the Company has kept proper books of account as
required by law so far as appears from our examination of those books.
(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956.
(v) The provisions of Section 274(1)(g) of the Companies Act, 1956 are
not applicable to this company vide number 2/5/ 2001-CL-V : General
Circular No.8/2002 dated 22-03-2002 issued by Ministry of Law, Justice
and Company Affairs, Department of Company Affairs.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Accounting Policies and Notes on Accounts give the information required
by the Companies Act, 1956, in the manner so required and give a true
and fair view in conformity with the accounting principles generally
accepted in India.
(a) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph (3) of our Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management during the year in a phased manner. As informed to us, no
material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of the fixed
assets during the year and the going concern status of the company is
not affected.
(ii) (a) Physical verification of inventory has been conducted by the
management at reasonable intervals during the year; except in case of
Stock of stores/ spares-in-transit.
(b) In respect of procedure of physical verification of stock of
spares/spares-in-transit followed by the management, the same needs
substantial improvement, which should commensurate with the size of the
Company and the nature of its business.
(c) Except in case of stock of spares/spares-in-ransit, the Company has
maintained proper records of inventory; and as informed to us, no
material discrepancies were noticed on physical verification as
compared to the book records.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(b) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory and fixed assets and for sale of
goods and services.
(v) According to the information and explanations given to us, there
were no contracts or arrangements referred to in Section 301 of
Companies Act, 1956 that need to be entered into the Register required
to be maintained in pursuance of Section 301 of the Companies Act,
1956.
In view of the above, Clause 4 (v) (b) is not applicable.
(vi) The Company has not accepted any deposits from the public during
the year
(vii) In our opinion, although the Company has an internal audit system
commensurate with its size and nature of its business; yet the same
needs to be transformed into risk-based audit and focus on inernal
controls, risk assessment etc.
(viii)The Central Government has not prescribed maintenance of cost
records under Section 209(1)(d) of the Companies Act, 1956 in respect
of the nature of business carried on by the Company.
(ix) (a) The Company is generally regular in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Cess and any other statutory dues with the appropriate
authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of aforementioned dues were in
arrears, as at 31st March, 2012 for the period of more than six months
from the date they became payable.
(b) According to information and explanations given to us, there were
no statutory dues that they have not been deposited on account of
dispute.
(x) The Company has no accumulated losses and has not incurred cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
(xi) The Company has not defaulted in repayment of dues to financial
institutions or banks. As there are no debentures, the question of
repayment does not arise.
(xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore, clause 4(xiii) of the Companies (Auditor's
Report) Order, 2003 is not applicable to the company.
(xiv) The Company has not been dealing or trading in shares,
securities, debentures and other investments. Therefore, clause 4(xiv)
of the Companies (Auditor's Report) Order, 2003 is not applicable to
the Company.
(xv) The Company has not given any guarantee for loans taken by others
from banks or financial institutions. Therefore, clause 4(xv) of the
Companies (Auditor's Report) Order, 2003 is not applicable to the
Company.
(xvi) The Company has availed External Commercial Borrowings (ECB),Term
Loans during the year for acquisition of Dredgers and the term loan is
utilised for the pupose for which it was obtained.
(xvii) The Company has not raised any funds on short-term basis or
long-term basis during the year and therefore, clause 4(xvii) of the
Companies (Auditor's Report) Order, 2003 is not applicable.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company has not issued debentures during the year and
therefore, the clause 4(xix) of the Companies (Auditor's Report) Order,
2003 is not applicable.
(xx) The Company has not raised money by public issue during the year
and therefore, the clause 4 (xx) of the Companies (Auditor's Report)
Order, 2003 is not applicable.
(xxi) In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year that causes the financial statements to be materially
misstated.
For G.R.Kumar & Co.
Chartered Accountants
Firm Reg No. 004941S
-sd-
(CA P.VIKAM)
Place : New Delhi Partner
Date : 28/05/2012 Membership No. 216542
Mar 31, 2011
1. We have audited the attached Balance Sheet of DREDGING CORPORATION
OF INDIA LIMITED, VISAKHAPATNAM as at 31st March, 2011 and also the
Profit and Loss Account of the Company for the year ended on that date
annexed thereto and the Cash Flow Statement for the year ended on that
date. These financial statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An Audit
includes examining on test basis evidence supporting the amounts and
disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure
hereto a statement on the matters specified in paragraph 4 and 5 of the
said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of
our audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books.
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement
with the books of account.
(iv) In our opinion, the Balance Sheet,Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of
Section 211 of the Companies Act, 1956.
(v) The provisions of Section 274(1)(g) of the Companies Act, 1956
are not applicable to this company vide number 2/
5/2001-CL-V : General Circular No.8/2002 dated 22-03-2002 issued by
Ministry of Law, Justice and Company Affairs,Department of Company
Affairs.
(vi) In our opinion and to the best of our information and according
to the explanations given to us, the said accounts read together with
the Accounting Policies and Notes on Accounts give the information
required by the Companies Act, 1956, in the manner so required and
give a true and fair view in conformity with the accounting
principles generally accepted in India.
(a) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(b) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS' REPORT
(Referred to in paragraph (3) of our Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management during the year in a phased manner. As informed to us, no
material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of the fixed
assets during the year and the going concern status of the company is
not affected.
(ii) (a) Physical verification of inventory has been conducted by the
management at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The Company has maintained proper records of inventory. As informed
to us, no material discrepancies were noticed on physical verification
as compared to the book records.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. In view of the above,
clause 4 (iii) (b), (c) and (d) are not applicable. (e) The Company
has not taken any loans, secured or unsecured from companies, firms or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. In view of the above, Clause 4 (iii) (f) and
(g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for sale
of goods and services. During the course of our audit, we have not
observed any major weaknesses in internal control.
(v) (a) According to the information and explanations given to us,
there were no contracts or arrangements referred to in Section 301
of Companies Act,1956 that need to be entered into the Register
required to be maintained in pursuance of Section 301 of the
Companies Act, 1956. In view of the above, Clause 4 (v)
(b) is not applicable.
(vi) The Company has not accepted any deposits from the public
during the year
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business. (viii) The
Central Government has not prescribed maintenance of cost records under
Section 209(1)(d) of the Companies Act,1956 in respect of the nature
of business carried on by the Company.
(ix) (a) The Company is generally regular in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Cess and any other statutory dues with the appropriate
authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of aforementioned dues were in
arrears, as at 31st March, 2011 for a period of more than six months
from the date they became payable. (b) According to information and
explanations given to us, there were no statutory dues that have not
been deposited on account of dispute.
(x) The Company has no accumulated losses and has not incurred cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
(xi) The Company has not defaulted in repayment of dues to financial
institutions or banks. As there are no debentures,the question of
repayment does not arise.
(xii) The Company has not granted loans and advances on the basis
of security by way of pledge of shares, debentures and other
securities.
(xiii) The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore, clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 is not applicable to the company.
(xiv)The Company has not been dealing or trading in shares,
securities, debentures and other investments. Therefore,
clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not
applicable to the Company. (xv) The Company has not given any
guarantee for loans taken by others from banks or financial
institutions. Therefore,clause 4(xv) of the Companies (Auditor's
Report) Order, 2003 is notapplicable to the Company.
(xvi) The Company has not obtained any term loans during the year
and therefore, clause 4
(xvi) of the Companies(Auditor's Report) Order, 2003 is not applicable
to the Company.
(xvii) The Company has not raised any funds on short-term basis or
long-term basis during the year and therefore, clause
4(xvii) of the Companies (Auditor's Report) Order, 2003 is not
applicable.
(xviii) The Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956.
(xix) TheCompany has not issued debentures during the year and
therefore, the clause 4(xix) of the Companies (Auditor's
Report) Order, 2003 is not applicable. (xx) The Company has not raised
money by public issue during the year and therefore, the clause 4 (xx)
of the Companies
(Auditor's Report) Order, 2003 is not applicable. (xxi) In our opinion
and according to the information and explanations given to us, no fraud
on or by the Company has been noticed or reported during the year that
causes the financial statements to the materially misstated.
For Rao & Narayan
Chartered Accountants
-Sd-
(P.V. SUBBA RAO)
Place : New Delhi Partner
Date : 30/05/11 Membership No. 09269
Mar 31, 2010
1. We have audited the attached Balance Sheet of DREDGING CORPORATION
OF INDIA LIMITED, VISAKHAPATNAM as at 31st March, 2010 and also the
Profit and Loss Account of the Company for the year ended on that date
annexed thereto and the Cash Flow Statement for the year ended on that
date. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An Audit
includes examining on test basis evidence supporting the amounts and
disclosures in the Financial Statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure
hereto a statement on the matters specified in paragraph 4 and 5 of the
said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books.
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-section (3C) of Section 211 of
the Companies Act, 1956.
(v) The provisions of Section 274(1 )(g) of the Companies Act, 1956 are
not applicable to this company vide number 2/5/ 2001 -CL-V : General
Circular No.8/2002 dated 22-03-2002 issued by Ministry of Law, Justice
and Company Affairs, Department of Company Affairs.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Accounting Policies and Notes on Accounts give the information required
by the Companies Act, 1956, in the manner so required and give a true
and fair view in conformity with the accounting principles generally
accepted in India.
(a) in the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(b) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
(c) in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO AUDITORS REPORT
(Referred to in paragraph (3) of our Report of even date)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All the fixed assets have been physically verified by the
management during the year in a phased manner. As informed to us, no
material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of the fixed
assets during the year and the going concern status of the company is
not affected.
(ii) (a) Physical verification of inventory has been conducted by the
management at reasonable intervals during the year.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The Company has maintained proper records of inventory. As informed
to us, no material discrepancies were noticed on physical verification
as compared to the book records.
(iii) (a) The Company has not granted any loans, secured or unsecured
to companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. In view of the above,
clause 4 (iii) (b), (c) and (d) are not applicable.
(e) The Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956.
In view of the above, Clause 4 (iii) (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for sale
of goods and services. During the course of our audit, we have not
observed any major weaknesses in internal control.
(v) (a) Accordingtotheinformationandexplanationsgiventous,therewereno
contracts or arrangements referred to in Section 301 of Companies Act,
1956 that need to be entered into the Register required to be
maintained inpursuance of Section 301 of the Companies Act, 1956. In
view of the above, Clause 4 (v) (b) is not applicable.
(vi) The Company has not accepted any deposits from the public during
the year
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business. (viii) The
Central Government has not prescribed maintenance of cost records under
Section 209(1 )(d) of the Companies Act, 1956 in respect of the nature
of business carried on by the Company.
(ix) (a) The Company is generally regular in depositing the undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, ServiceTax, Customs
Duty, Cess and any other statutory dues with the appropriate
authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of aforementioned dues were in
arrears, as at 31" March, 2010 for a period of more than six months
from the date they became payable.
(b) According to information and explanations given to us, there were
no statutory dues that have been deposited on account of dispute.
(x) The Company has no accumulated losses and has not incurred cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
(xi) The Company has not defaulted in repayment of dues to financial
institutions or banks. As there are no debentures, the question of
repayment does notarise.
(xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore, clause 4(xiii) of the Companies (Auditors
Report) Order, 2003 is not applicable to the company.
(xiv) The Company has not been dealing or trading in shares,
securities, debentures and other investments. There fore, clause4(xiv)
of the Companies (Auditors Report) Order, 2003 is not applicable to
the Company. (xv) The Company has not given any guarantee for loans
taken by others from banks or financial institutions. Therefore, clause
4(xv) of the Companies (Auditors Report) Order, 2003 is not applicable
to the Company.
(xvi) The Company has not obtained any term loans during the year and
therefore, clause 4(xvi) of the Companies (Auditors Report) Order,
2003 is not applicable to the Company.
(xvii) The Company has not raised any funds on short-term basis or
long-term basis during the year and therefore, clause 4(xvii) of the
Companies (Auditors Report) Order, 2003 is not applicable.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 ofthe Companies Act, 1956. (xix) The Company has not
issued debentures during the year and therefore, the clause 4(xix) of
the Companies (Auditors Report) Order, 2003 is not applicable.
(xx) The Company has not raised money by public issue during the year
and therefore, the clause 4 (xx) of the Companies (Auditors Report)
Order, 2003 is not applicable.
(xxi) In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during theyearthat causes the financial statements to the materially
misstated.
For Rao & Narayan
Chartered Accountants
-Sd-
(P.V. SUBBA RAO)
Partner
Membership No. 09269
Place: Visakhapatnam
Date : 27/05/10