D. B. Corp Limited
Report on the Audit of the Standalone Financial Statements
Opinion
1. We have jointly audited the accompanying Standalone Financial Statements of D. B. Corp Limited ("the Company”), which comprise the Standalone Balance Sheet as at March 31, 2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone 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 total comprehensive income (comprising of profit and other comprehensive loss), changes in equity and its cash flows for the year then ended.
Basis for Opinion
3. We conducted our joint audit in accordance with the Standards on Auditing (SAs) 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 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 Standalone 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 opinion.
Emphasis of Matter
4. We draw your attention to the Note 48 of the Standalone Financial Statement that describes the search operation carried out by the Income Tax department at the Company’s business premises and residential premises of the promoters and certain key employees of the Company in July 2021, pursuant to which notices/assessment orders have been received for the assessment years 2018-19 to 2022-23. Pending finalisation of the assessment proceedings, the impact of these matters on the Standalone Financial Statements for the year ended March 31, 2023 and the adjustments (if any) required to these Standalone Financial Statements, is presently not ascertainable. Our opinion is not modified in respect of this matter.
Key audit matters
5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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Assessment of carrying value of Investment Properties (including advances for properties)
(Refer Notes 2.4, 2.6, 5 and 11(b) to the Standalone Financial Statements)
The Standalone Financial Statements of the Company include investment properties of ' 990.74 million and advance for investment properties of ' 294.60 million as at March 31,2023.
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Our procedures include the following:
Ý Assessed the design and tested the operating effectiveness of key controls relating to assessment of appropriateness of the carrying values of investment properties and advances for properties under construction.
Ý Evaluated management’s procedures for identification of triggers for impairment to the carrying values of investment properties and assessment of recoverability of the advances against properties.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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Investment properties are measured at cost less
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Ý
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Evaluated the competency and capabilities of the
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accumulated depreciation and impairment, if any. Advances for investment properties are measured at
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external property valuers engaged by the Company.
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cost less impairment, if any.
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Ý
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Assessed on test-check basis, the reasonableness of the valuation of properties as per the reports of the external
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Management tests these assets for impairment
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valuers, by comparing the rates of similar property in the
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whenever events or changes in circumstances indicate
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vicinity area from independent property web portals and/
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that the carrying amount may not be recoverable.
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or government notified circle rates.
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Property valuations are carried out by third party valuers
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Ý
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Verified on test-check the basis, the underlying property
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engaged by the Company, for the selected investment
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documents, and other records for determination of the
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properties. The value of investment properties (including properties under construction) is dependent
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Company’s right over the properties.
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on the valuation methodology adopted, inputs into the
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Ý
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Verified, the physical existence and enquired with the
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valuation model and factors such as prevailing market
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management on progress of the constructions for a
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conditions, the individual nature, condition, and location of each property.
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sample of the under-construction properties.
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Ý
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Evaluated the Company’s policy for making provisions
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We determined this as a key audit matter because of
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for doubtful advances against properties and examined
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the significant balance of investment properties (and the advances for properties under construction) in
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workings for provision made towards such advances.
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the Balance Sheet and inherently subjective nature
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Ý
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Checked mathematical accuracy of the Company’s
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of investment property valuations due to the use of
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computations of impairment charge, wherever
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assumptions in the valuation methodology.
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impairment was identified.
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Ý
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Assessed adequacy of disclosures made in these Standalone Financial Statements.
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Based on the above procedures performed, we did not
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come across any material exceptions in the management’s
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assessment of the carrying values of the investment
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properties (including advances against properties).
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Appropriateness of provision for expected credit loss against trade receivables
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Our Procedures include the following:
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Ý
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Assessed the design and tested the operating
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(Refer Notes 2.14, 2.19, 2.22, 14 and 44 to the
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effectiveness of key controls relating to determination of
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Standalone Financial Statements)
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ECL.
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The Company has receivables aggregating to ' 5,641.61
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Ý
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We evaluated appropriateness of the management
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Million as of March 31,2023 against which the Company
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assumptions and judgments used to calculate ECL
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has recognised a provision for expected credit loss
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provision. These considerations include management
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(ECL) of ' 983.69 Million as on that date.
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assessment on financial condition of the counterparty, Probability of default, bad debts based on the Company’s
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The Company assesses the provision for receivables based on ECL model as per Ind AS 109, Financial
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past collection history.
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Instruments and carries the trade receivable balances
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Ý
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Obtained the ageing analysis of trade receivables and
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at an amount which approximates their realisable value.
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on a sample basis, tested the aging of trade receivables at year end and enquired the reasons of any long outstanding amounts.
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Key Audit Matter
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How our audit addressed the Key Audit Matter
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The Company evaluates and calculates the ECL using a provision matrix based on historical credit loss experience, specific reviews of customer accounts as well as experience with such customers, current economic and business conditions.
The appropriateness of the provision for ECL has been determined to be a key audit matter as it is subjective due to the high degree of judgment applied by the Company in determining the provision matrix which requires evaluation of various factors such as the financial condition of the counterparty, probability of default, loss given default, expected future cash flows and other related factors, and also considering the significance of the trade receivables balances and the related estimation uncertainty.
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Ý On a test-check basis, verified receipts subsequent to the financial year-end against the trade receivable balances outstanding as at March 31,2023.
Ý Checked mathematical accuracy of the Company’s computations of provision for loss allowance.
Ý Assessed adequacy of disclosures made in the Standalone Financial Statements.
Based on our procedures as stated above, no material exceptions were observed in respect of management’s assessment of provision for ECL against trade receivables.
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Other Information
6. The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the Standalone Financial Statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the Standalone Financial Statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.
Responsibilities of management and those charged with
governance for the Standalone Financial Statements
7. 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 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 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the Standalone 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
Financial Statements
9. Our objectives are to obtain reasonable assurance about whether the Standalone 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 Financial Statements.
10. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone 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 with reference to Financial Statements 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 Standalone 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 Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
11. 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.
12. 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.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone 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
14. 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.
15. 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive loss), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows 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 specified under Section 133 of the Act.
(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 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 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 Financial Statements - Refer Note 37 to Standalone Financial Statements.
ii. The Company was not required to recognise a provision as at March 31,2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contract. The Company did not have any derivative contracts as at March 31,2023.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that, to the
best of its knowledge and belief, as disclosed in the notes to the accounts, no funds 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 entities ("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 (Refer Note 47(vii) to the Standalone Financial Statements);
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the accounts, no funds have been received by the Company from any persons or entities, including foreign entities ("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 (Refer Note 47(vii) to the Standalone Financial Statements); and
(c) Based on such audit procedures that we 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 (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1,2023, the reporting under clause (g) of Rule 11 of the Companies
(Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.
16. 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.
For Price Waterhouse Chartered Accountants LLP For Gupta Mittal & Co.
Chartered Accountants
Firm Registration Number: 012754N/N500016 Firm Registration Number: 009973C
Jeetendra Mirchandani Shilpa Gupta
Partner Partner
Membership Number: 48125 Membership Number: 403763
UDIN: 23048125BGWQTU7293 UDIN: 23403763BGUZES3332
Place: Mumbai Place: Bhopal
Date: May 19, 2023 Date: May 19, 2023
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