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DLF

BSE: 532868|NSE: DLF|ISIN: INE271C01023|SECTOR: Construction & Contracting - Real Estate
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Auditor's Report (DLF) Year End : Mar '19

Independent Auditor’s Report

To the Members of DLF Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of DLF Limited (“the Company”), which comprise the Balance sheet as at 31 March 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and notes to the standalone Ind AS financial statements, including a summary of 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 standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“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 31 March 2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor''s Responsibilities for the Audit of the Standalone Ind AS 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 Act 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 audit opinion on the standalone Ind AS financial statements.

Emphasis of Matters

We draw attention to Note no. 50 to the Standalone Ind AS financial statements of the Company which describes the uncertainty relating to outcome of following lawsuits filed against the Company:

a) In a complaint filed against the Company relating to imposing unfair conditions on buyers, the Competition Commission of India has imposed a penalty of Rs,63,000 lakhs on the Company which was upheld by Competition Appellate Tribunal. The Company has filed an appeal which is currently pending with Hon''ble Supreme Court of India and has deposited Rs,63,000 lakhs as per direction of the Hon''ble Supreme Court of India.

b) In a writ filed with Hon''ble High Court of Punjab and Haryana, the Company and one of its subsidiary and a joint venture Company have received judgments cancelling the sale deeds of land /removal of structure relating to two IT SEZ/ IT Park Projects in Gurugram. The Company and the subsidiary companies filed Special Leave petitions (SLPs) challenging the orders which is currently pending with Hon''ble Supreme Court of India. The Hon''ble Supreme Court has admitted the matters and stayed the operation of the impugned judgments till further orders in both the cases.

c) Securities and Exchange Board of India (SEBI) in a complaint filed against the Company, imposed certain restrictions on the Company. The Company had received a favorable order against the appeal in said case from Securities Appellate Tribunal (SAT). SEBI, subsequently, has filed a statutory appeal which is currently pending before Hon''ble Supreme Court. SEBI has also imposed penalties upon the Company, some of its directors, officers, its three subsidiaries and their directors which has been disposed of by SAT with a direction that these appeals will stand automatically revived upon disposal of civil appeal filed by SEBI against aforementioned SAT judgment.

Based on the advice of the external legal counsels, no adjustment has been considered in these standalone Ind AS financial statements by the management in respect of above matters. Our report is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended 31 March 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters

How our audit addressed the key audit matter

Revenue recognition for real estate projects (as described in note 61 to the standalone Ind AS financial statements)

The Company has adopted Ind AS 115 - Revenue from Contracts with Customers, mandatory for reporting periods beginning on or after /April 1, 2018.

The Company has applied the modified retrospective approach to contracts that were not completed as at April 01, 2018 and has given impact of Ind AS 115 application by debit to retained earnings as at the said date by Rs,396,399.66 lakhs (net of tax).

The application of Ind AS 115 has impacted the Company''s accounting for recognition of revenue from real estate projects, which is now being recognized at a point in time upon the Company satisfying its performance obligation and the customer obtaining control of the underlying asset.

Considering application of Ind AS 115 involves significant judgment in identifying performance obligations and determining when ‘control'' of the asset underlying the performance obligation is transferred to the customer and the transition method to be applied, the same has been considered as key audit matter.

Our audit procedures included:

- We have read the Company''s revenue recognition accounting policies and assessed compliance of the policies with Ind AS 115;

- We tested the computation of the adjustment to retained earnings balance as at April 1, 2018 in view of adoption of Ind AS 115 as per the modified retrospective method;

- We obtained and understood revenue recognition process including identification of performance obligations and determination of transfer of control of the asset underlying the performance obligation to the customer;

- We have read the legal opinion obtained by the Company to determine the point in time at which the control is transferred in accordance with the underlying agreements;

- We tested, revenue related transactions with the underlying customer contracts, sale deed and handover documents, evidencing the transfer of control of the asset to the customer based on which revenue is recognized;

- We assessed the revenue-related disclosures included in Note 61 to the financial statements.

Claims, litigations and contingencies (as described in note 50 to the standalone Ind AS financial statements)

The Company is having various ongoing litigations, court and other legal proceedings before tax and regularity authorities and courts, which could have significant financial impact if the potential exposure were to materialize.

Management estimates the possible outflow of economic resources based on legal counsel opinion and available information on the legal status of the proceedings.

Considering the determination by the management of whether and how much, to provide and / or disclose for such contingencies involves significant judgement and estimation, the same has been considered as key audit matter.

Our audit procedures included:

- We understood management''s process relating to the identification and impact analysis of claims, litigations and contingencies;

- We analyzed responses obtained from the legal advisors.

- We have obtained confirmation letters from legal counsels;

- We have read the minutes of meetings of the Audit Committee and the Board of Directors of the Company related to noting of status of material litigations;

- We have assessed management''s assumptions and estimates related to disclosures of contingent liabilities in the financial statements.

Assessing the carrying value of Inventory (as described in note 12 to the standalone Ind AS financial statements)

The Company''s inventory comprise of ongoing and completed real

Our audit procedures/ testing included, among others:

estate projects, unclenched projects and development rights. As

at 31 March 2019, the carrying values of inventories amounts to

- We read and evaluated the accounting policies and disclosures

Rs,1,135,726.23 lakhs.

made in the financial statements with respect to inventories;

- We understood and reviewed the management''s process and

The inventories are carried at the lower of the cost and net

methodology of using key assumptions for determination of

realizable value (‘NRV''). The determination of the NRV involves

NRV of the inventories;

estimates based on prevailing market conditions, current prices

and expected date of commencement and completion of the project, the estimated future selling price, cost to complete projects

- We have tested the NRV of the inventories to its carrying value in books on sample basis.

and selling costs.

- Where the Company involved specialists to perform valuations, we also performed the following procedures:

Considering significance of the amount of carrying value of inventories in the financial statements and the involvement of

° We obtained and read the valuation report used by the

significant estimation and judgment in such assessment of NRV,

management for determining the NRV;

the same has been considered as key audit matter.

° We considered the independence, competence and

objectivity of the specialist involved in determination of valuation.

° Involved experts to review the assumptions used by the management specialists.

Key audit matters

How our audit addressed the key audit matter

Assessing impairment of Investments in subsidiary, joint venture and associate entities (as described in note 6A to the standalone Ind AS financial statements)

The Company has significant investments in its subsidiaries, joint ventures and associates. As at 31 March 2019, the carrying values of Company''s investment in its subsidiaries, joint ventures and associate entities amounts to Rs,953,590.24 lakhs.

Management reviews regularly whether there are any indicators of impairment of the investments by reference to the requirements under Ind AS 36 “Impairment of Assets”.

For investments where impairment indicators exist, significant judgments are required to determine the key assumptions used in the discounted cash flow models, such as revenue growth, unit price and discount rates.

Considering, the impairment assessment involves significant assumptions and judgment, the same has been considered as key audit matter.

Our procedures in assessing the management''s judgment for the

impairment assessment included, among others, the following:

- We assessed the Company''s valuation methodology applied in determining the recoverable amount of the investments;

- We obtained and read the valuation report used by the management for determining the fair value (‘recoverable amount'') of its investments;

- We considered the independence, competence and objectivity of the management specialist involved in determination of valuation;

- We tested the fair value of the investment as mentioned in the valuation report to the carrying value in books;

- Made inquiries with management to understand key drivers of the cash flow forecasts, discount rates etc

- Involved experts to review the assumptions used by the management specialists. We reviewed the disclosures made in the financial statements regarding such investments.

Assessment of recoverability of deferred tax asset (as described in note 9 to the standalone Ind AS financial statements)

As at 31 March 2019, the Company has recognized deferred tax assets of Rs,367,450.55 lakhs on deductible temporary differences and unused tax losses.

Recognition of deferred tax assets to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized involves significant management judgement and estimation given that it is based on assumptions such as the likely timing and level of future taxable profits which are affected by expected future market and economic conditions.

Considering, this involves significant judgment and estimates, the same has been considered as key audit matter.

Our audit procedures included, amongst others:

- Obtained an understanding of the process and tested the controls over recording of deferred tax and review of deferred tax at each reporting date;

- We tested the computation of the amounts recognized as deferred tax assets;

- We evaluated management''s assumptions used to determine the probability that deferred tax assets recognized in the balance sheet will be recovered through taxable income in future years, by comparing them against profit trends and future business plans;

- We assessed the disclosures on deferred tax included in Note 9 to the financial statements.

Related party transactions (as described in note 45 to the standalone Ind AS financial statements)

The Company has undertaken transactions with its related parties in the ordinary course of business at arm''s length. These include transactions in the nature of investments, loans, sales and purchases, etc. as disclosed in note 45 to the standalone Ind AS financial statements.

Considering the significance of transactions with related parties and regulatory compliances thereon, related party transactions and its disclosure as set out in respective notes to the financial statements has been identified as key audit matter.

Our procedures/ testing included the following:

- Obtained and read the Company''s policies, processes and procedures in respect of identifying related parties, obtaining approval, recording and disclosure of related party transactions;

- Read minutes of shareholder meetings, board meetings and minutes of meetings of those charged with governance in connection with Company''s assessment of related party transactions being in the ordinary course of business at arm''s length;

- Tested, related party transactions with the underlying contracts, confirmation letters and other supporting documents;

- Agreed the related party information disclosed in the financial statements with the underlying supporting documents, on a sample basis.

We have determined that there are no other 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 Message from

Chairman, Directors'' Report, Management Discussion & Analysis report and Corporate Governance Report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon.

Our opinion on the standalone Ind AS 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 standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such 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 Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation 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) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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.

In preparing the standalone Ind AS financial statements, management 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 Act, 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 standalone Ind AS financial statements, including the disclosures and whether the standalone Ind AS 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 standalone Ind AS financial statements for the financial year ended 31 March 2019 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 and other financial information as regards Company''s share of loss of partnership firm (post tax) amounting to Rs,211.73 lakhs for the year ended

31 March 2019 included in the accompanying standalone Ind AS financial statements of the Company whose financial statements and other financial information have been audited by the other auditors whose reports have been furnished to us and our opinion in so far as it relates to Company''s share of loss included in respect of the partnership firm investments, is based solely on the report of such other auditor.

The accompanying standalone Ind AS financial statements include unaudited financial statements and other unaudited financial information as regards Company''s share in loss of partnership firm (post tax) Rs,267.26 lakhs for the year ended 31 March 2019. These unaudited financial statements and other unaudited financial information has been furnished to us by the management. Our opinion, in so far as it relates to Company''s share of loss in so far as it relates to Company''s share of loss included in respect of the partnership firm investments, is based solely on the on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information are not material to the Company.

Our opinion above on the standalone Ind AS financial statements and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditor and the financial statements and other financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1 ” 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 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 the Statement of 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 standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) The matter described in ‘Emphasis of Matters'' paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(h) In our opinion, the managerial remuneration for the year ended 31 March 2019 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(i) 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 standalone Ind AS financial statements - Refer Note 50 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;

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

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets comprising of property, plant and equipment and investment properties.

(i) (b) All fixed assets comprising of property, plant and equipment and investment properties have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(i) (c) According to the information and explanations given

by the management, the title deeds of immovable properties included in property, plant and equipment and investment properties are held in the name of the Company, except:

- five immovable properties having gross block of Rs,1,338.18 lakhs and net block of Rs,1,338.18 lakhs, title deed for which is in the name of one of the group company and the Company is in process of getting them registered in their name. The Company has constructed building on such land having net block of Rs,17,389.98 lakhs.

- one immovable properties which includes land aggregating Rs,148.75 lakhs as at 31 March 2019 for which title deed is not in the name of the company and the company is in the process of getting the same registered in their name.

- the title deeds of immovable properties included in investment property amounting to Rs,45,653 lakhs which, according to the information and explanations given by the management, are pledged with the banks against borrowings taken by subsidiary company and are not available with the Company. The same has not been independently confirmed by the bank and hence we are unable to comment on the same. The Company has constructed building on such land having net block of Rs,145,517 lakhs.

(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for inventory represented by development rights. Inventories represented by development rights have been confirmed as at 31 March 2019 on the basis of custodian certificates obtained by the management. No material discrepancies were noticed on such physical verification/ confirmations.

(iii) (a) The Company has granted unsecured loans to companies, firms, or other parties covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Company''s interest.

(iii) (b) The Company has granted loans that are re-payable on demand, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. We are informed that the company has not demanded repayment of any such loan during the year and thus, there has been no default on the part of the parties to whom the money has been lent. The payment of interest has been regular.

(iii) (c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees and securities given have been complied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account 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, in relation to construction industry and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund,

employees'' state insurance, income-tax, sales-tax, service tax, duty of custom, duty, value added tax, goods and service tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases. The provisions relating to duty of excise are not applicable to the Company.

(vii) (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to duty of excise are not applicable to the Company.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to a financial institution, bank or dues to debenture holders. The Company did not have any outstanding loans or borrowings due to government.

(vii) (c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, value added tax, goods and service tax and cess on account of any dispute, are as follows:

Nature of Statute

Nature of dues

Amount (Rs,in lakhs)

Amount paid under protest (Rs,in lakhs)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961

Tax demands on account of various disallowances during tax assessment

10,072.92

-

2016-17

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Tax demands on account of various disallowances during tax assessment

349,044.30

13,089.11

2006-07 to 2015-16

Income Tax Appellate Tribunal

Income Tax Act, 1961

Tax demands on account of various disallowances during tax assessment

31,979.26

1992-93 to 2007-08 and 2011-12

Hon''ble High Court of Delhi

Odisha Entry Tax Act 1999

Entry tax demand on purchase of goods in the state of Odisha

0.76

-

2014-15 to 2015-16

Additional Commissioner (Appeals)

West Bengal Entry Tax Act, 2012

Entry tax demand on purchase of goods in the state of West Bengal

5.14

-

2012-13

Hon''ble High Court of Kolkata

Odisha Value Added Tax Act, 1999

Demand of VAT on leased transaction

263.69

-

2009-10 to 2013-14

Hon''ble High Court of Odisha

Odisha Value Added Tax Act, 1999

Demand of VAT on leased transaction

676.56

-

2014-15 to 2015-16

Additional Commissioner (Appeals)

Uttar Pradesh Value Added Tax Act, 2008

Demand of VAT on account of taxable turnover

21.65

11.85

2011-12 to 2015-16

Additional Commissioner (Appeals) Noida

Haryana General Sales Tax Act, 1973

Disallowance of refund

145.01

145.01

1997-98 to 9992000

Hon''ble High Court, Punjab & Haryana

The Finance Act, 2004 and Service tax rules

Denial of Cenvat credit on rent paid and service tax demand on other matters

299.84

280.19

2009-10 to 2012-13

CESTAT, Chandigarh

The Finance Act, 2004 and Service tax rules

Interest on wrong availment of inadmissible Cenvat Credit

221.62

-

2011-12

Commissioner Service Tax

The Finance Act, 2004 and Service tax rules

Demand of service tax on transfer of development rights

4,991.45

850.00

2012-13 to 2015-16

Additional Director General, DGCEI, New Delhi

The Finance Act, 2004 and Service tax rules

Service tax liability in respect of registration charges recovered by the assesse from their customers

1,697.00

2015-16

Commissioner CGST, Gurugram

Custom Act, 1962

Classification & Assessment of Goods -Deformed Steel Bars

714.86

-

2008

Commisioner (Appeals), Kandla

(ix) According to the information and explanations given by the management, the Company has utilized the money raised by way of term loans for the purpose for which they were raised. According to the information and explanations given by the management, the Company has not raised any money way of initial public offer/ further public offer (including debt instruments).

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given by the management, the Company has complied with provisions of section 42 of the Companies Act, 2013 in respect of the shares issued through Qualified Institutional Placement during the year. According to the information and explanations given by the management, we report that the amounts raised were not required for immediate utilization, hence invested partially in fixed deposits and balance remains in current account. Further, as per information and explanations given by management, the Company has converted part of its compulsorily convertible debentures into equity shares during the year, for which money was raised in previous financial year.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

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

We have audited the internal financial controls over financial reporting of DLF Limited (“the Company”) as of 31 March 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company''s Management is responsible for establishing and maintaining 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 the 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting with reference to these standalone Ind AS financial statements 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 as specified under section 143(10) of the Companies Act, 2013, to the extent 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 with reference to these standalone Ind AS financial statements 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 over financial reporting with reference to these standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, 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 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 internal financial controls over financial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements

A company''s internal financial control over financial reporting with reference to these standalone Ind AS financial statements 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 with reference to these standalone Ind AS financial statements 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 With Reference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, 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 with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone Ind AS financial statements 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, adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting with reference to these standalone Ind AS financial statements were operating effectively as at 31 March 2019, 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 S.R. Batliboi & CO. LLP

Chartered Accountants ICAI

Firm Registration Number: 301003E/E300005

per Manoj Kumar Gupta

New Delhi Partner

21 May 2019 Membership No.: 083906

Source : Dion Global Solutions Limited
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