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DCW Ltd.

BSE Live

May 29, 16:00
10.20 -0.17 (-1.64%)
Volume
AVERAGE VOLUME
5-Day
53,687
10-Day
36,404
30-Day
35,846
27,798
  • Prev. Close

    10.37

  • Open Price

    10.46

  • Bid Price (Qty.)

    10.20 (23)

  • Offer Price (Qty.)

    10.43 (39)

NSE Live

May 29, 15:55
10.20 -0.25 (-2.39%)
Volume
AVERAGE VOLUME
5-Day
881,679
10-Day
538,237
30-Day
355,585
296,375
  • Prev. Close

    10.45

  • Open Price

    10.35

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    10.20 (15698)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

1. Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of DCW Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the 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 Ind AS financial statements that give a true and fair view of the state of affairs(financial position), profit or loss (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.

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 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 Ind AS 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 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 the Rules made thereunder.

We conducted our audit of the Ind AS financial statements 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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 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 the 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 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 Ind AS financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 state of affairs (financial position) of the Company as at 31st March, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

5. Emphasis of Matter

5.1 We draw attention to Note No. 31 to the financial statements which describes the uncertainty related to the outcome of the petitions/appeals filed by the company in the matter of:

a. electricity tax demand of Rs.5346.66 lakhs on captive power generated and other matters during the period 2003 to 2012;

b. custom duty demand of Rs.6139.98 lakhs of coal imported and other matters by the company during 2011 and 2012; and

c. Execution of assignment deeds of the lands at Sahupuram works in respect of which the state government has issued notice of repossession and demanded lease rent for the period occupied by the company. The land is treated as freehold.

No provision has been made for the aforesaid demands in view of the factors stated in the said note.

5.2 The Trade receivables, Trade payables and other Receivable, Advances and Payables are reconciled to the extent third party confirmations received. In cases where the confirmations have either not received or called for are subject to the confirmation and reconciliation (Refer Note No 32).

Our opinion is not modified in respect of these matters.

6. Report on Other Legal and Regulatory Requirements

6.1 As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

6.2 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 (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 “Annexure B”.

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 Ind AS financial statements - Refer Note No 31 of the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer Note No 35 of the financial statements.

iii. There was no delay in transferring amounts, which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE “A” TO AUDITOR’S REPORT

Annexure referred to in our report of even date to the members of DCW Limited on the accounts for the year ended 31st March 2018

i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation in respect of material Fixed Assets. The fixed Asset register is maintained manually and is in process of integrating with the financial accounting system.

(b) We have been informed that the fixed assets were physically verified by the Management during the previous financial year. There was no physical verification carried out during the year. In our opinion the frequency of verification is reasonable. As per the information given to us by the management, no material discrepancies as compared to book records were noticed in respect of the fixed assets verified during the previous financial year.

(c) In our opinion and according to the information and explanations given to us, the title deeds of immovable properties are held in the name of the company except in case of certain lands and buildings referred to in Note 2, 31 and 36.

ii. The inventories of finished goods (except goods in-transit), stores, spare parts and raw materials have been physically verified by the management with the help of external agencies. The stock lying with third party has not been physically verified and is subject to confirmation from the custodian of said stock at the year end. In our opinion, the frequency of physical verification is reasonable except in case of stock lying at third party locations. We have been informed by the management that the discrepancies noticed on verification between the physical stocks and the book stocks are not material considering the type of material, which is calculated on volumetric basis and therefore subject to measurement differences by different agencies and therefore no adjustments have been made in the books of account.

iii. According to the information and explanations given to us, the company has not granted any loans 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, guarantees or security and has not made investments to which the provisions of section 185 and 186 of the Companies Act, 2013 apply.

v. In our opinion and according to the information and explanations and representation made by the management, the amounts received as business advances and inter corporate deposits are not considered as deposits received from the public during the year.

vi. The Central Government has prescribed maintenance of cost records under section 148(1) of the Companies Act, 2013 in respect of certain products manufactured by the Company. We have broadly reviewed the records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

vii. (a) According to the records maintained by the company, the company during the year has delayed in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, Goods and Services Tax, Cess and other statutory dues with appropriate authorities.

According to the information and explanations given to us, no undisputed amounts in respect of the aforesaid statutory dues were in arrears, as at 31st March, 2018, for a period of more than six months from the date they became payable except provident fund amounting to Rs.132.25 lacs which are in arrears for more than six months from the due date, as at 31st March, 2018.

(b) According to the information and explanations given to us and the records of the company, the dues of sales tax/ value added tax / customs duty / service tax / excise duty / Cess, which have not been deposited on account of dispute, are as follows:

(Amount in Rs. lacs)

Name of the Statute / Nature of Dues

Period

Forum where dispute is pending

Supreme Court

High Court

Appel-late Tribunal*

Appellate Authority **

Grand Total

Customs Act, 1962 (Custom Duty Including Penalty & Interest, wherever applicable)

1997 to 2017

-

95.79

5,866.77

84.14

6,046.70

Central Excise Act, 1944 (Excise Duty Including Penalty & Interest, wherever applicable)

1997 to 2015

11.57

287.89

299.46

Sales Tax legislations (sales tax, including penalty & interest wherever applicable)

1982 to 2017

-

4,829.74

371.42

1,126.61

6,327.77

Service Tax

2005 to 2015

-

48.80

66.80

-

115.60

Local cess, local cess surcharge [land revenue including penalty and interest wherever applicable]

1989 to 2017

5,114.70

4,543.63

65.13

561.01

10,284.47

GRAND TOTAL

5,114.70

9,529.53

6,658.01

1,771.76

23,074.00

* Appellate Tribunal includes STAT, CESTAT & ITAT

** Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals

viii. On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Banks/Financial Institutions. The company has not taken any loan from any Government or by way of issue of debentures.

ix. According to the information and explanations given to us and the records of the company, the company has not raised money by way of initial public offer or further public offer during the year. During the year the Company has raised fresh term loans, which was utilised for purpose of working capital needs of the Company.

x. According to the information and explanations given to us and based on audit procedures performed and representations obtained from the management, we report that no fraud on the Company by its officers or employees or by the company has been noticed by the management or reported during the year under audit.

xi. According to the information and explanations given to us and based on verification of records, the managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Companies Act, 2013.

xii. The Company is not a Nidhi Company and hence clause (xii) of the order is not applicable.

xiii. In our opinion and according to the information and explanations given to us, and considering the approval of the Central Government in respect of payment of remuneration to relatives of Directors and approval of the Audit Committee, the company has complied with provisions of section 177 and 188 of Companies Act, 2013 with respect to related party transactions entered in to during the year under review and the details have been disclosed in the Financial Statements etc., as required under Ind AS 24.

xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, except, certain warrants which were issued on preferential basis on 27th August 2015, has been converted into equity shares during the year in accordance with the terms of said warrants.

xv. According to the information and explanations given to us and based on verification of records, the company has not entered into any non-cash transactions with directors or persons connected with them.

xvi. According to the information and explanations given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE “B” TO AUDITOR’S REPORT

Annexure referred to in our report of even date to the members of DCW Limited on the accounts for the year ended 31st March 2018

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

1. Report on the Internal Financial Controls

We have audited the internal financial controls over financial reporting of DCW Limited as at 31st March, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

2. Management’s 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”. 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.

3. Auditors’ 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 “Guidance Note”) 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 judgement, including the assessment of the risks of material misstatement of the 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.

4. 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

5. 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.

6. Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls 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 CHHAJED & DOSHI

Chartered Accountants

[Firm Reg. No.101794W]

CA. Nitesh Jain

Place: Mumbai Partner

Date: 29th May 2018 M. No. 136169