You are here » Home » Companies » Company Overview » Essar Shipping Ltd

Essar Shipping Ltd.

BSE: 533704 Sector: Infrastructure
NSE: ESSARSHPNG ISIN Code: INE122M01019
BSE 00:00 | 19 Apr 24.40 1.25
(5.40%)
OPEN

23.05

HIGH

24.75

LOW

22.80

NSE 00:00 | 19 Apr 24.35 1.00
(4.28%)
OPEN

23.15

HIGH

24.70

LOW

23.05

OPEN 23.05
PREVIOUS CLOSE 23.15
VOLUME 19016
52-Week high 35.85
52-Week low 21.50
P/E
Mkt Cap.(Rs cr) 505
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 23.05
CLOSE 23.15
VOLUME 19016
52-Week high 35.85
52-Week low 21.50
P/E
Mkt Cap.(Rs cr) 505
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Essar Shipping Ltd. (ESSARSHPNG) - Auditors Report

Company auditors report

To

The Members of

Essar Shipping Limited

Report on the Standalone Ind-AS Financial Statements

We have audited the accompanying standalone Ind-AS financial statements of EssarShipping Limited (‘the Company') which comprise the Balance Sheet as at March31 2017 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind-AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone Ind-AS financial statements that give a true and fairview of the financial position financial performance including Other comprehensiveincome cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standardsspecified in the Companies (Indian Accounting Standards) Rules 2015 as amended underSection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgements andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone Ind-AS financial statements that give a true and fair viewand are free from material misstatements whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind- AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind-AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind- AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind-AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind- AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind-ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind-AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind-AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including Ind-AS of the stateof affairs of the Company as at March 31 2017 and its loss (financial position includingother comprehensive income) its cash flows and the changes in Equity for the year endedon that date.

Other Matters

The financial information of the company for the year ended March 31 2016 and thetransition date opening balance sheets as at April 1 2015 included in these standalonefinancial statements are based on the previously issued statutory financial statements forthe years ended March 31 2016 prepared in accordance with the Companies (AccountingStandard) Rules 2006 as amended which were audited by us on which we expressed modifiedopinion dated May 25 2016 and the financial statements of March 31 2015 were audited bythe previous auditors. The adjustments to those financial statements for the differencesin accounting principles adopted by the company on transition to Ind-AS have been auditedby us.

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 ofthe Act we give in the ‘Annexure A' a statement on the matters specified in theparagraph 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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (including other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2017 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in ‘Annexure B'; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements- Refer note 24 to the standalone Ind-AS financialstatements.

(ii) The Company does not have any material foreseeable losses for which a provisionmay be necessary.

(iii) There were no amounts that were required to be transferred to the investoreducation protection fund by the Company.

(iv) Based on audit procedures and relying on the management representation we reportthat the company did not have any holding or dealing in Specified Bank Notes during theperiod from November 08 2016 to December 30 2016 (Refer Note 31 to Ind AS financialstatements).

For C N K & Associates LLP
Chartered Accountants
FRN: 101961W/W-100036
Himanshu Kishnadwala
Partner
Mumbai May 26 2017 Membership number: 37391

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) During the year the fixed assets were physically verified by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification;

(c) The title deeds of immovable properties are held in the name of the company;

(ii) As informed to us the inventory has been physically verified by the Management atreasonable intervals during the year and no material discrepancies have been noticed onsuch verification;

(iii) In our opinion and according to the information and explanations given to us andon the basis of documents verified by us the Company has not granted any loans securedor unsecured during the year to any party covered in the register maintained underSection 189 of the Companies Act 2013. Accordingly clause 3(iii) of the Order is notapplicable to the Company;

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans Investments guarantees and security;

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the rules framed there under to the extent notified;

(vi) According to the information and explanations given to us the Company is notrequired to maintain cost records pursuant to the Companies (Cost Records and Audit)Amendment Rules 2016 and prescribed by the Central Government under subsection (1) ofsection 148 of the Companies Act 2013;

(vii) (a) According to the information and explanation given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositingundisputed statutory dues including provident fund duty of customs and value added taxand other material statutory dues as applicable with appropriate authorities. Howeverdelays in deposits of tax deducted at source and service tax were observed ranging from 24to 328 days. The extent of arrears of tax deducted at source and service tax (IncludingInterest levies thereon) outstanding as at March 31 2017 for a period of more than sixmonths from the date the same became payable is '1.01crores and Rs.11.62 croresrespectively.

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax and duty of customs at March31 2017 which have not been deposited on account of a dispute are as follows:

(Amounts in crores)

Name of the Statute Nature of Dues Amount Period to which the amount relates Forum where the matter is pending
Income Tax Act 1961 Income Tax 7.29 1993-94 The High Court of Bombay
Income Tax Act 1961 Income Tax 28.00 2012-13 CIT-Appeals
Income Tax Act 1961 Income Tax 26.84 2014-15 CIT-Appeals
Foreign Trade (Development and Regulation Act 1992) Custom Duty 27.40 2006-07 The High Court of Bombay

(viii) According to the records of the Company examined by us and the information andexplanations given to us except for the loans borrowings and dues mentioned in the belowtable the Company has not defaulted in repayment of loans or borrowings to any FinancialInstitution Bank Government or dues to Debenture Holders as at the balance sheet date;

(Amounts in crores)
Lender Name Amount of Default as at the balance sheet date Period of Default
Debenture Holders
Life Insurance Corporation 968.86 1 to 1105 days
CSEB (Chattisgarh State Electricity Board) Gratuity and Pension fund Trust 1.98 4 to 456 days
MTNL- Employees Provident Fund Trust 0.49 16 to 273 days
Rajasthan Rajya Vidyut Prasaran Nigam Limited 1.85 53 to 283 days
Banks
State Bank of India 8.38 1 to 90 days
State Bank of Patiala 2.21 1 to 90 days
State Bank of Bikaner & Jaipur 3.82 1 to 90 days
State Bank of Travancore 2.17 1 to 90 days
Syndicate Bank 17.95 1 to 519 days
Indian Overseas Bank Financial Institutions 18.05 1 to 523 days
IL&FS Financial Services Limited 2.02 1 to 90 days
Total 1027.78

(ix) According to the records of the Company examined by us and the information andexplanation given to us the Company has not raised money by way of initial public offeror further public offer (including debt instruments) during the year and in case of termloans taken during the year the same were applied for the purposes for which those wereraised;

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit;

(xi) According to the records of the Company examined by us and the information andexplanations given to us the company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013; (also refer Note 33(b) of the standalonefinancial statements).

(xii) The Company is not a Nidhi company and therefore the provisions of clause 3 (xii)of the Order are not applicable to the company;

(xiii) According to the records of the Company examined by us and the information andexplanation given to us all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details thereof havebeen disclosed in the Financial Statements etc. as required by the applicable accountingstandards;

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeclause 3(xiv) is not applicable to the Company;

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause 3(xv) ofthe Order is not applicable to the Company;

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For C N K & Associates LLP
Chartered Accountants
FRN: 101961W/W-100036
Himanshu Kishnadwala
Partner
Mumbai May 26 2017 Membership number: 37391

ANNEXURE-B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of EssarShipping Limited ("the Company") as of March 31 2017 in conjunction withour audit of the standalone Ind-AS financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For C N K & Associates LLP
Chartered Accountants
FRN: 101961W/W-100036
Himanshu Kishnadwala
Partner
Mumbai May 26 2017 Membership number: 37391