To,
Members of Mazagon Dock Shipbuilders Limited, Mumbai
Report on the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of MAZAGON DOCK SHIPBUILDERS LIMITED
("the Company"), which comprise the Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss Account (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "The Standalone Financial Statement").
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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023 and its profit, total comprehensive income, changes in equity and its cash flow for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors 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 ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Emphasis of Matter
We draw attention to the following matters in the notes to the standalone Ind AS financial Statements;
(Refer Note 34 Point No 1)
(Refer Note 34 Point No 2 )
Our opinion is not modified in respect of these matters.
Key Audit Matters:
Key audit matters are those matters that, in our professional judgement, 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. | Key Audit Matter | How our audit addressed the key audit matter |
1. | Revenue Recognition for Ship/Submarine Construction & repair contracts |
|
Referred to in Note No. 1 – 2.2(j) of the Financials Statements The company recognizes the revenue from Ship/ Submarine Construction/ repair contracts when the company satisfies a performance obligation by transferring goods or service to a customer. |
Sr. No. | Key Audit Matter | How our audit addressed the key audit matter |
The company transfers control of goods or service over time, and, therefore, satisfies a performance obligation and recognizes revenue over time after fulfilling one of the criteria mentioned in the aforesaid note. |
the technical departments. |
|
When the control of the produced goods and rendered services is transferred over time to the customer, revenue is recognized over time under the percentage of completion method (PoC). Penalties if any, are reduced from the revenue. |
further estimated costs provided by the management. |
|
For the application of the overtime method (PoC method), the measure of the progress towards complete satisfaction of a performance obligation is based on inputs (i.e. cost incurred) |
the flow of transactions along with the audit trail. |
Information other than the Standalone Financial Statement and Auditors Report thereon:
The Companys Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Directors Report, Overall Business Operations, Management and Corporate Governance but does not include the Standalone Financial Statements and our auditors report thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance or conclusion thereon. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above 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.
If, based on the work we have perform on the other information that we obtained prior to the date of this auditors report, 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. When we read the Annual report, if we conclude that there is a material misstatement therein, then we will communicate the matters to those charged with governance.
Managements Responsibility for the Standalone Financial Statements
Auditors Responsibility for the Audit of the Standalone Financial Statement:
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 auditors 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.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
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 consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors 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
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;
(b) contain any material misstatement.
For C. R. Sagdeo & Co, Chartered Accountants F.R.N: 108959W
CA. Sachin V. Luthra
Partner
Date: 30th May, 2023 Membership No.: 109127 Place: Mumbai UDIN - 23109127BGQVHZ6233
Annexure ‘I to the Independent Auditors Report
(Referred to in paragraph 3 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Mazagon Dock Shipbuilders Limited of even date)
(B) The Company has maintained proper records showing full particulars of Intangible assets;
nature of its assets. Pursuant to the program, certain Property, Plant & Equipment were physically verified by the management through an External Auditor during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification;
(Rs. in lakhs)
Description of Property |
Gross Carrying Value | Held in name of | Whether promoter, director or their relative or employee | Period held indicate range, where appropriate |
Reason for not being held in name of company* Indicate if in dispute |
Lease hold Land | |||||
North Yard, Near Mazdock House, Mumbai |
– | Peninsular & Oriental Steam Navigation Company (P&O S. N. Co) |
NO |
1966 | In Year 1960, Mazagon Dock private Limited (MDPL)was acquired by Govt. of India (GoI). An Agreement dated 19th April 1960, was executed between the president of India and M/s British Steam Navigation company Ltd (B.I.S.N.CO. Ltd) & M/s Peninsular & Oriental steam Navigation Company (P & O S. N.Co.) to acquire the shares of MDPL held by them. Later, the companys name was changed to ‘Mazagon Dock Limited" (MDL) and thereafter to Mazagon Dock Shipbuilders limited. The updation with respect to the name of the company in the land records/lease agreement and the renewal of lease agreement for south yard land are under process. |
North Yard, Near Residential Colony, MDL, Mumbai | – | 1975 | |||
South Yard, Near Module shop, MDL, Mumbai | – | British India Steam Navigation Company Limited (B.I.S.N Co Ltd) | 1959 | ||
South Yard, Near Mogul House, MDL, Mumbai | – | 1947 | |||
355 Phase North yard | 9,699 | Mumbai Port Trust (MBPT) | 1976 | Land at Mumbai taken from MBPT, Mumbai on lease. Renewal of lease agreements is under process. MDL is regularly paying lease rent according to the terms and condition of the old lease agreement. |
|
Extension of Phase II | 3,051 | 1979 | |||
Extension of Slipway in SY | 5,136 | 1995 | |||
Additional water area for Extension of Slipway | 2,539 | 2003 | |||
Part of Nhava yard land | – | City and Industrial Development Corporation of Maharashtra Ltd (CIDCO) | 1984 | The company is in possession of approx. 10-acre land belonging to CIDCO which ONGC ceded to MDL during the year 1984. MDL is having permanent tenancy rights co-terminus with the leasehold rights of ONGC with the CIDCO land in their possession. |
(Rs. in lakhs)
verification carried out by the management are appropriate. The discrepancies between the physical inventory and the book records noticed on physical verification were not material and have been properly dealt with in the books of accounts. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed.
Month | Drawing Power (DP) calculation as per DP statement submitted to bank In Lakhs | Drawing Power (DP) calculation as per Books of accounts In Lakhs | Difference in Amounts In Lakhs | Variance (%) |
Jun-22 | (6,76,370) | (6,55,732) | (20,638) | (3.05%) |
Sep-22 | (7,78,025) | (7,55,241) | (22,784) | (2.93%) |
Dec-22 | (7,09,730) | (6,89,092) | (20,638) | (2.91%) |
Mar-23 | (8,78,713) | (8,27,369) | (51,344) | (5.84%) |
Our observations with regards to variance are as follows:
The stock statement is required to be submitted to the bank by the prescribed due date. As per the explanation given by the company, a provisional statement is submitted to the bank by the due date and the actual figures vary in certain cases after finalization of accounts. The Company has not availed any fund-based facility during the year and has availed only non-fund-based facility from the bank during the year.
the Company, the Company has not made investment in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the year. Accordingly, the provisions of clause 3(iii)(a) to 3(iii)(f) of the order are not applicable to the Company;
Name of the Statute |
Period |
Amount (In Lakhs) |
Forum where dispute is pending |
Part-payment made under protest (In Lakhs) |
Central Excise Act, 1944 | FY 2001-02 to FY 2003-04 and FY 2007-08 | 249.74 | CESTAT, Mumbai | Nil |
FY 2000-01 | 15.00 | Commissioner, Mumbai | Nil | |
BST Act, 1959 CST Act, | FY 1980-81 to FY 2004-05 FY 2011-12 | 99,642 | Maharashtra Sales Tax Tribunal, Mumbai | 261 |
MVAT Act, 2002 | FY 2005-06 to FY 2013-14, FY 2016-17, FY 2017-18 | 16,125 | Jt. Commissioner of Sales Tax & MSTT | 404.00 |
Karnataka Sales Tax Act | FY 1989-90, FY 1990-91, FY 1992-93, FY 1995-96 to FY 1996-97 | 316.40 | Karnataka Sales Tax Appellate Tribunal | 12.60 |
Service Tax | FY 2001-02 to FY 2003-04 | 4,522 | Bombay High Court | Nil |
Custom Duty | FY 2007-08 | 59.00 | Assistant Commissioner of Customs | Nil |
(f) of the Order is not applicable.
(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made
any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Hence, clause 3(x)(b) of the order is not applicable to the company;
(b) We have considered the reports of the internal Auditors for the period under audit;
Reserve Bank of India Act, 1934. Accordingly, clause 3 xvi (a), (b), (c) & (d) of the Order are not applicable to the company;
(b) Yes, an amount of Rs. 5.14 Crores which is unspent under sub-section (5) of section 135 of the Companies Act, pursuant to ongoing projects, has been transferred to special account which is in compliance with the provision of sub-section (6) of section 135 of the said Act;
For C. R. Sagdeo & Co, Chartered Accountants F.R.N: 108959W
CA. Sachin V. Luthra
Partner
Place: Mumbai Membership No.: 109127 Date: 30.05.2023 UDIN - 23109127BGQVHZ6233
Annexure II to Independent Auditors Report
To,
The Members of Mazagon Dock Shipbuilders Limited,
Mumbai
As referred to in Paragraph 2 under ‘Report on Other Legal and Regulatory Requirements in our Auditors Report of even date and as required by the directions issued by the Office of the Comptroller & Auditor General of India under Section 143(5) of the Companies Act, 2013, we give below our comments on the matters referred therein:
For C. R. Sagdeo & Co, Chartered Accountants F.R.N: 108959W
CA. Sachin V. Luthra
Partner
Place: Mumbai Membership No.: 109127 Date: 30.05.2023 UDIN - 23109127BGQVHZ6233
Annexure III to the Independent Auditors Report
(Referred to in paragraph 3(f)under Report on Other Legal and Regulatory Requirements section of our report to the Members of Mazagon Dock Shipbuilders Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting 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 MAZAGON DOCK SHIPBUILDERS LIMITED ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls:
The Board of Directors of the Company 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 respective companys 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.
Auditors Responsibility:
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act,2013, to the extent applicable to the audit of internal financial controls. 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 auditors 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 system over financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting:
A companys 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 companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting:
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion:
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over
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www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.