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Shipping Corporation of India Ltd.

BSE: 523598 Sector: Infrastructure
NSE: SCI ISIN Code: INE109A01011
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VOLUME 186580
52-Week high 113.50
52-Week low 62.15
P/E 37.11
Mkt Cap.(Rs cr) 3,405
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 73.05
CLOSE 72.60
VOLUME 186580
52-Week high 113.50
52-Week low 62.15
P/E 37.11
Mkt Cap.(Rs cr) 3,405
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shipping Corporation of India Ltd. (SCI) - Auditors Report

Company auditors report

To

The Members of

THE SHIPPING CORPORATION OF INDIA LIMITED

1. Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of The ShippingCorporation of India Limited (“the Company”) which comprise the BalanceSheet as at March 31st 2017 the Statement of Profit and Loss and the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (“the Act”) with respect to the preparationand presentation of these Standalone Financial Statements that give a true and fair viewof the financial position financial performance changes in equity and cash flows of theCompany in accordance with accounting principles generally accepted in India includingthe Accounting Standards specified under Section 133 of the Act read with Rule 3 of theCompanies (Accounts) Rules 2015 Companies (Indian Accounting Standards) (Amendment)Rules 2016. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India as specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Financial Statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Financial Statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of theFinancial Statements whether due to fraud or error. In making those risk assessments theauditors' considered internal financial control relevant to the Company's preparation ofthe Financial Statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose of expressingan opinion on whether the Company has in place an adequate internal financial controlssystem over financial reporting and the operating effectiveness of such controls. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Financial Statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Standalone Financial Statements.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its profit (financial performance including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.

5. Emphasis of Matter

We draw attention to the following:

i) Trade Receivables and Agents balances' are subject to the balance confirmationsSubsequent reconciliation and consequential adjustments if any as on 31st March 2017.

ii) The direct access of certain overseas foreign agents to funds collected on accountof freight and other charges without adequate security and regular monitoring mechanismis prone to risk of non /short-payment.

Our Opinion is not qualified in respect of these matters.

6. Other Matters

The comparative financial information of the Company for the year ended 31stMarch 2016 and the transition date opening Balance Sheet as at 1st April 2015 included inthese Standalone Financial Statements are based on the previously issued statutoryFinancial Statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by the Previous Joint Auditors whose report for the year ended 31stMarch 2016 and 31st March 2015 dated 26th May 2016 and 21st May 2015respectively expressed a qualified opinion on those Standalone Financial Statements asadjusted for the differences in the accounting principles adopted by the Company ontransition to the Ind AS which have been audited by us.

Our opinion is not qualified in respect of these matters.

7. Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditors' 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 specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

As required under sub section (5) of Section 143 of the Act in case of the GovernmentCompany we give in the “Annexure B” a statement on the matters specifiedin the directions and sub -directions issued by Office of the Comptroller and AuditorGeneral of India.

II 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 purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;

(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 3 of theCompanies (Accounts) Rules 2015 Companies (Indian Accounting Standards) (Amendment)Rules 2016;

(e) As per Notification No. G.S.R. 463 (E) dated June 5th 2015 issued by Ministry ofCorporate Affairs Section 164 (2) as regards the ‘Disqualifications of Directors' isnot applicable to the Company since it is a Government Company;

(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 ourStandalone Report in “Annexure C” to this Report;

(g) With respect to the other matters to be included in the

Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of the pending litigations on its financialposition in its Financial Statements (Refer Note 27 of the Financial Statements).

ii. The Company does not have any material foreseeable losses on long-term contractsincluding derivative contracts.

iii. There were no delays in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the Financial Statements as toholding as well as dealings in Specified Bank Notes during the period from November 8th2016 to December 30th 2016 (Refer note no-38 to the Financial Statements). Basedon audit procedures and relying on the management representation we report that thedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the Management.

For GMJ & Co. For G. D. Apte & Co.
Chartered Accountants Chartered Accountants
FRN: 103429W FRN: 100515W
CA Sanjeev Maheshwari CA Chetan. R. Sapre
Partner Partner
ICAI Membership No. 38755 ICAI Membership No. 116952
Place: Mumbai Place: Mumbai
Date: 27th May 2017 Date: 27th May 2017

ANNEXURES TO THE INDEPENDENT AUDITORS' REPORT

“Annexure A” to Independent Auditors' Report

(Referred to in paragraph I under ‘Report on Other Legal and RegulatoryRequirements' section of our Independent Auditors' Report to the members of the Company onthe Financial statements for the year ended 31st March 2017)

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As per the information and explanations given to us the fixed assets have beenphysically verified by the management at reasonable intervals which in our opinion isreasonable having regard to the size of company and nature of its business.

c) According to the information and explanations given to us and on the basis of ourexamination of records of the company;

For Immovable property as mentioned in Table No.1 the transfer of title deed inthe company's name is pending subsequent to the merger of Moguline Limited with thecompany and the title deed are in the name of the Previous Owner.

For Immovable properties as mentioned in Table No. 2 original title deeds arenot made available to us for the purpose of verification. Except as mentioned in the Table1 and 2 the title deeds for all other immovable properties are held in the name of theCompany.

Table No. 1 Amount ' in lakhs
Apartment Name NO OF FLATS Gross Block Net Block as on 31.03.2017
GONDAVALI APTS 10 9.08 8.77

Table No. 2

Amount ' in lakhs
Apartment Name NO OF FLATS Gross Block Net Block 31.03.2017
MEGHDOOT 13 10.64 1.87
MALAD STAFF QUARTERS 27 3.69 1.68
PERSIPOLIS APTS 2 2.84 1.32
KAVITA APTS 1 2.62 1.22
AJANTA APTS 1 2.35 1.10
SOMMERSET HOUSE 1 4.28 1.07
CHITRAKOOT APTS 2 4.57 1.01
LANDS END APTS 1 2.76 0.69
MONALISA 2 1.60 0.32
RAJHANS APTS 1 1.61 0.24
OLYMPUS APTS 1 0.99 0.94
JOLLY MAKER APTS 1 0.81 0.77
NEW GULISTAN APTS 1 0.64 0.61
WOOD LANDS APTS 1 0.55 0.53

(ii) The physical verification of inventory has been conducted at reasonable intervalsby the management during the year. No material discrepancies were noticed on suchverification.

(iii) The Company have granted loans to four Body Corporates covered in the registermaintained under section 189 of the Act.

a) The terms and conditions of the grant of such loans are prima facie not prejudicialto the company's interest.

b) In the case of the loans granted the terms of arrangements do not stipulate anyrepayment schedule and the loans are repayable on demand. Payment of interest has beenstipulated and the receipts thereof are regular.

c) There are no overdue amounts for more than ninety days in respect of the loansgranted.

(iv) According to information and explanation given to us and in our opinion theCompany has not advanced loans to the Directors/ to a Company in which the Directors areinterested to which the provisions of section 185 of the Act apply. The Company hascomplied with the provision of Section 186 to the extent applicable.

(v) In respect of deposits accepted in our opinion and according to the informationand explanations given to us directives issued by the Reserve Bank of India and theprovisions of section 73 to 76 of the Act or any other relevant provisions of the Actand the rules framed there under are not applicable and hence not commented upon.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under clause 148(1) of the Companies Act 2013for the Company and therefore the provisions of clause (vi) of the order are notapplicable to the company.

(vii) a) According to records of the Company verified by us we report that the Companyis generally regular in payment of undisputed statutory dues including Provident FundEmployees' State Insurance Income Tax Sales Tax Service Tax Duty of Customs Duty ofExcise Value Added Tax Cess and other statutory dues with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxand other statutory dues were in arrears as at March 312017 for a period of more than sixmonths from the date they became payable.

b) According to the information and explanations given to us there are no dues ofduty of Customs and Excise which have not been deposited with the appropriateauthorities on account of any dispute. However according to information and explanationgiven to us the following dues in respect of Income Tax Sales Tax Service Tax and ValueAdded Tax which have not been deposited on account of dispute:

Amount (Rs. in Lakhs)
Sr. No. Name Of The Statute Nature Of The Dues The Forum /Authority Where Dispute Is Pending Financial Year Amount Involved Amount Paid Under Protest Unpaid Amount
1 Income Tax Act 1961 U/s 195 Bombay High Court 2003-04 to 2005-06 9820 - 9820
2 Income Tax Act 1961 Tax U/s 143(3) Bombay High Court 2006-07 2901 - 2901
3 Income Tax Act 1961 Tax U/s 143(3) Bombay High Court 2004-05 & 2005-06 801 - 801
4 Income Tax Act 1961 Tax U/s 147 ITAT Mumbai 2004-05 & 2005-06 2529 - 2529
5 Income Tax Act 1961 Penalty u/s 271(1) CIT(A) Mumbai 2004-05 & 2005-06 323 - 323
6 Income Tax Act 1961 Tax U/s 143(3) ITAT Mumbai 2007-08 1013 - 1013
7 Income Tax Act 1961 Tax U/s 143(3) CIT(A) Mumbai 2009-10 1180 - 1180
8 Income Tax Act 1961 Tax U/s 143(3) CIT(A) Mumbai 2011-12 393 - 393
9 Income Tax Act 1961 Tax U/s 143(3) CIT(A) Mumbai 2012-13 300 - 300
10 Finance Act 1994 Service tax CESTAT Oct 09 to Sep 15 4183 - 4183
11 Finance Act 1994 Service tax CESTAT Oct 09 to Sep 15 875 - 875
12 Finance Act 1994 Service tax CESTAT Oct 09 to Sep 14 3129 2155 974
13 Finance Act 1994 Service tax CESTAT July 12 to Sep 15 4945 - 4945
14 Finance Act 1994 Service tax CESTAT Mar 13 to Apr 13 98 - 98
15 Finance Act 1994 Service tax CESTAT Oct 09 to Sep 14 38394 - 38394
16 Finance Act 1994 Service tax CESTAT Oct 09 to Sep 15 34001 - 34001
17 Finance Act 1994 Service tax Commissioner (A) July 12 to Sep 15 8 - 8
18 Finance Act 1994 Service tax Commissioner LTU Oct 09 to Sep 14 76474 - 76474
19 Finance Act 1994 Service tax CESTAT July 12 to Sep 14 34 3 31
20 Finance Act 1994 Service tax CESTAT Oct 09 to Jun 12 22 - 22
21 Finance Act 1994 Service tax Joint Commissioner LTU Oct 09 to Jun 12 127 - 127
22 Finance Act 1994 Service tax CESTAT April 09 to July 14 767 767 -
23 AP VAT Act 2005 VAT CTO 2011-12 10 - 10
24 Sales Tax VAT Bombay High Court 1994-95 14 - 14
25 Sales Tax VAT Bombay High Court 1993-94 22 - 22
Total 182364 2925 179439

(viii) According to the information and explanations given to us we are of the opinionthat the company has not defaulted in repayment of loans or borrowings to financialinstitutions and banks. The company has not issued any debentures.

(ix) The Company has raised the money from the follow up proceeds in the earlier years.Out of the unutilized proceeds amounting to ' 33065 Lakhs as on 31st March 2016 thecompany has utilized ' 3437 Lakhs during the year for the purpose for which it has beenraised. However balance amounting to ' 29628 Lakhs as on 31.03.2017 have not beenutilized and kept in a Fixed Deposit pending utilization. In our opinion the term loanswere applied for the purpose for which those were raised.

(x) We report that certain complaints have been received by the vigilance division ofthe company for the reporting period for which the investigations are under process. Wehave neither come across any instance of fraud by the company or any fraud on the companyby its officer or employees noticed or reported during the year nor have been informed ofany such case by the management.

(xi) The Company is a Government Company and the provisions of section 197 are notapplicable to the company. Therefore clause (xi) of the said order is not applicable tothe company.

(xii) In our opinion the company is not a Nidhi Company. Therefore clause (xii) of thesaid order is not applicable to the company.

(xiii) All transactions with the related parties are in compliance with sections 177and 188 of Companies Act 2013 where applicable and the details have been disclosed in thefinancial statements etc. as required by the applicable accounting standards.

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review andtherefore clause (xiv) of the said order is not applicable to the company.

(xv) The company has not entered into any non-cash transactions with the directors orpersons connected with him and therefore the clause (xv) of the said order is notapplicable to the company.

(xvi) According to the information and explanation provided by the management thecompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For GMJ & Co. For G. D. Apte & Co.
Chartered Accountants Chartered Accountants
FRN: 103429W FRN: 100515W
CA Sanjeev Maheshwari CA Chetan. R. Sapre
Partner Partner
ICAI Membership No. 38755 ICAI Membership No. 116952
Place: Mumbai Place: Mumbai
Date: 27th May 2017 Date: 27th May 2017

ANNEXURES TO THE INDEPENDENT AUDITORS' REPORT

“Annexure B” to Independent Auditors' Report

Directions under Section 143(5) of the Companies Act 2013

On the Accounts of The Shipping Corporation of India Ltd. for the year 2016-17

Sr. No. Directions Auditors' comments including Action taken wherever required to be taken Impact on the Accounts and Financial Statements
1 Whether the Company has clear title / lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title / lease deeds are not available. As per the information and explanation given to us the corporation has clear title/ lease deeds for freehold and leasehold land. Further the company has one land which is on the lease is the Shipping house of Mumbai on which building has been constructed. No Impact
2 Whether there are any cases of waiver / write off debts / loans / interest etc? If yes the reasons therefore and amount involved. The company has write off the debts amounting to ' 694927.23/- during the year (Refer Annexure ‘1'). Not Material
3 Whether proper records are maintained for inventories lying with third parties and assets received as gift / grant(s) from the Government or other authorities? As explained to us there are no inventories lying with third parties. Further there are no gifts received from Govt. or other authorities. No Impact

Sub-directions under Section 143(5) of the Companies Act 2013 in respect of theShipping Corporation of India Limited for the year 2016-17

Sr. No. Sub-directions Auditors' comments including Action taken wherever required to be taken Impact on the Accounts and Financial Statements
1 State the area of land under encroachment and briefly explain the steps taken by the Company to remove encroachments. As per the information and explanation given to us there are no land under encroachment No Impact
2 (i) Whether amount of (a) bank balance (b) trade receivable (c) trade payables (d) loans and advances for which third party confirmation was not made available has been reported. The corporation has sent letters for balance confirmation of bank trade receivables and trade payables. However no confirmation has been sent for loans & advances. For the Trade receivables 122 confirmations send 12 confirmations has been received by us. For Trade Payables 580 confirmations send 79 confirmations have been received by us. Adjustments required in the accounts on confirmation and reconciliation are not likely to be material in the opinion of the management. However Reconciliation / Rectification on the basis of balance confirmation of M/s. Cochin Shipyard Ltd. has already been done before 31st March 2017.
(ii) Where such balance has been confirmed by respective parties whether it varies widely from the amounts reflected under respective heads in the Financial Statements? If so the difference and action taken by the management to reconcile the difference should be disclosed. The balance confirmation of trade payables received wherever varying with the amount as per the books of account by more than ' 5 Lakhs is shown in (Annexure -‘2'). Adjustments required in the accounts on confirmation and reconciliation are not likely to be material in the opinion of the management. However Reconciliation / Rectification on the basis of balance confirmation of M/s. Cochin Shipyard Ltd. has already been done before 31st March 2017.
3 Independent verification may be made of information / inputs furnished to actuary viz. number of employees average salary retirement age etc. and assumptions made by the actuary regarding the discount rate future cost increase mortality rate etc. for arriving at the provision for liability of retirement benefits viz. gratuity leave encashment post-retirement medical benefits etc. The information/ inputs furnished by the company to the actuary for valuation of the provision for liability of retirement benefits i.e. number of employees average salary retirement age etc have been reviewed and the same are based on actual for the current year. The assumption made by the actuary for valuation of the liability of retirement benefits i.e. discount rate morality rate future cost increase are consistent over the period. The actuary has confirmed in its report that the liability of retirement benefits has been valued as per the provisions of Indian Accounting Standards-19 (Ind AS 19). No Impact

“Annexure C” to Independent Auditors' Report

(Referred to in paragraph II (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report)

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

To the Members of ‘The Shipping Corporation of India Limited'

In conjunction with our audit of the Standalone Financial Statements of The ShippingCorporation of India Limited (“the Company”) as of and for the year endedMarch 31 2017 we have audited the Internal Financial Controls over financial reportingof the Company as of 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 Act.

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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India.

Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 auditors' judgement 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) pertains to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Financial Statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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.

Qualified Opinion

According to the information and explanation given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of theCompany's internal financial control over financial reporting as at 31st March 2017.

a) The timely verification of claims of agents needs to be further strengthened.

b) The timely updation and monitoring of the data with respect to Fleet Personnelneeds to be strengthened.

c) The control on the booking of bunker consumption to the correct voyage of thevessels needs to be strengthened. Also timely updation of telegrams should be followed toavoid delays in booking of Bunker Consumption.

d) The control in the system to ensure that the bunker consumption in case of timecharter is recovered from the charterer instead of debiting to the consumption accountneeds to be further strengthened.

e) The system has to ensure that the tax is deducted at source on all the provision forexpense made.

f) Timely updation of Minimum rates/THC rates for the purpose of preparation of‘Bill of Lading' needs to be strengthened. And system of maker checker for updatingthe same into the system needs to be introduced.

g) Timely uploading of the data from Agents system to the Company's Invoice bookingsystem needs to be further strengthened.

h) Maker Checker concept with respect to preparation and raising of Invoices to theCustomers' needs to be strictly followed.

i) System of monitoring and clearing of Vendors Accounts needs to be followed ontimely basis.

In our opinion the Company has in all material respects maintained adequate internalfinancial controls over financial reporting as of March 312017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India and except for the possible effects of the material weaknessdescribed above on the achievement of objectives of the control criteria the internalfinancial controls over financial reporting of the company were operating effectively asat March 312017.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the FinancialStatements of the company as of 31st March 2017 and these material weakness do not affectour opinion on the Standalone Financial Statements of the Company.

For GMJ & Co. For G. D. Apte & Co.
Chartered Accountants Chartered Accountants
FRN: 103429W FRN: 100515W
CA Sanjeev Maheshwari CA Chetan. R. Sapre
Partner Partner
ICAI Membership No. 38755 ICAI Membership No. 116952
Place: Mumbai Place: Mumbai
Date: 27th May 2017 Date: 27th May 2017