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Chowgule Steamships Ltd.

BSE: 501833 Sector: Infrastructure
NSE: CHOWGULSTM ISIN Code: INE490A01015
BSE 00:00 | 10 Aug 11.00 -0.50
(-4.35%)
OPEN

10.93

HIGH

11.86

LOW

10.93

NSE 05:30 | 01 Jan Chowgule Steamships Ltd
OPEN 10.93
PREVIOUS CLOSE 11.50
VOLUME 12503
52-Week high 23.75
52-Week low 8.56
P/E 21.15
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 10.93
CLOSE 11.50
VOLUME 12503
52-Week high 23.75
52-Week low 8.56
P/E 21.15
Mkt Cap.(Rs cr) 40
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chowgule Steamships Ltd. (CHOWGULSTM) - Auditors Report

Company auditors report

To the members of

Chowgule steamships limited

Report on the audit of the standalone financial statements opinion

We have audited the standalone financial statements of chowgule steamships limited ("thecompany") which comprise the balance sheet as at 31st march 2021 the statement ofprofit and loss (including other comprehensive income) the statement of changes in equityand the statement of cash flows for the year then ended and notes to the standalonefinancial statements including a summary of significant accounting policies and otherexplanatory information. (hereinafter referred to as "financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by thecompanies act 2013 (the "act") in the manner so required and give a true andfair view in conformity with the indian accounting standards prescribed under section 133of the act read with the companies (indian accounting standards) rules 2015 as amended("ind as") and other accounting principles generally accepted in india of thestate of affairs of the company as at 31st march 2021 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit of the financial statements in accordance with the standards onauditing (sas) specified under section 143(10) of the companies act 2013. Ourresponsibilities under those standards are further described in the auditor'sresponsibilities for the audit of the financial statements section of our report. We areindependent of the company in accordance with the code of ethics issued by the instituteof chartered accountants of india together with the independence requirements that arerelevant to our audit of the financial statements under the provisions of the companiesact 2013 and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion on the financial statements.

Material uncertainty related to going concern

We draw attention to the standalone financial statements regarding the company'sexposure to its wholly owned subsidiary as on 31st march 2021 of rs 12410.76 lakhsconsisting of investment in equity and convertible redeemable preference shares of rs9549.59 lakhs and loan (incl accrued interest) of rs 2861.17 lakhs (against a net worthof rs 12875.98 lakhs). Looking to the activities of the said subsidiary/step-subsidiaries in our opinion recovery of the investment and the loans is doubtful onaccount of consistent losses for the past years sale of major operational assets by thestep-down subsidiaries and inability to meet liabilities as and when they fall due. Theseevents indicate that a material uncertainty exists which may cast a significant doubt onthe company's ability to continue as a going concern. Our opinion is not modified inrespect of this matter.

Emphasis of matter i. We draw attention to note 31 to the financial statementsregarding exceptional items of rs 1102.26 lakhs (net) consisting of writeback / write offof certain loans / receivables on account of their not being payable / recoverable by thecompany for reasons stated therein. Ii. Balances with respect to certain borrowings andcertain trade payables are subject to confirmation and reconciliation. In absence of suchconfirmation the balances as per books of accounts have been relied upon. Our opinion isnot modified in respect of this matter

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matters described in the material uncertainty related to going concernsection we have determined the matters described below to be the key audit matters to becommunicated in our report.

Sr no key audit matter Auditor's response
1 transactions with related parties: Principal audit approach
The company in its course of operations has entered into several transactions with related parties. The identification of these related parties transactions entered into with them and the determination of arm's length price involves significant judgement and estimates. (refer note 33 to the standalone financial statements.) Our audit approach included the following: confirming the regulatory requirements for the identification of related parties and reporting of transactions with these related parties
evaluation and testing of the design of internal controls and the secretarial process followed for identification of related parties transactions with them;
evaluating management judgments regarding determination of arm's length price for transactions with related parties;
review of relevant agreements/contracts evaluate the business rationale for the related party transaction and evaluating whether such evidence is consistent with management's explanations.
2 evaluation of uncertain tax positions: Principal audit approach
The company has uncertain tax positions including matters under long litigations (refer note 25 to the standalone financial statements) Our audit approach included the following:
obtained the status of all the direct and indirect tax litigations including pending assessments and demands from the company;
analysed the management's underlying assumptions in estimating the tax provisions and the possible outcome of the disputes

Other information

The company's board of directors is responsible for the other information. The otherinformation comprises the information included in the directors' report including itsannexures and corporate governance and shareholders information but does not include thefinancial statements and our auditor's report thereon. The directors' report including itsannexures and corporate governance and shareholders information is expected to be madeavailable to us after the date of this auditor's report. Our opinion on the financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the course of ouraudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact.

Responsibilities of management and those charged with governance for the financialstatements

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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance total comprehensive income changes in equity and cash flows of thecompany in accordance with the accounting principles generally accepted in indiaincluding the indian accounting standards specified under section 133 of the act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the act for safeguarding of the assets of the company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the company or to cease operations or has no realisticalternative but to do so.

The board of directors are also responsible for overseeing the company's financialreporting process.

Auditor's responsibilities for the audit of financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with saswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with sas we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of thecompanies act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the company to cease to continue asa going concern.

evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditors'report unless law or regulation precludes public disclosures about the matters or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

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 companies act 2013 we give in the "annexure a" a statement on thematters specified in paragraphs 3 and 4 of the order to the extent applicable.

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 statement of changes in equity and the cash flow statement dealt with by thisreport are in agreement with the books of account.

(d) in our opinion the aforesaid financial statements comply with the indianaccounting standards specified under section 133 of the act read with rule 7 of thecompanies (accounts) rules 2014.

(e) on the basis of the written representations received from the directors as on 31stmarch 2021 taken on record by the board of directors none of the directors isdisqualified as on 31st march 2021 from being appointed as a director in terms of section164(2) of the act. (f) with respect to the adequacy of the internal financial controlsover financial reporting of the company and the operating effectiveness of such controlsrefer to our separate report in "annexure b".

(g) with respect to the other matters to be included in the auditor's report inaccordance with the requirements of section 197(16) of the act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the company to its directors during the year is in accordance withrequisite approvals mandated by the provisions of section 197 read with schedule v of thecompanies act 2013; (h) with respect to the other matters to be included in the auditor'sreport in accordance with rule 11 of the companies (audit and auditors) rules 2014 asamended 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 pending litigationson its financial position in its financial statements – refer note 25 to thefinancial statements. Ii. The company did not have any long-term contracts includingderivative contracts for which there were material foreseeable losses; iii. There were noamounts which were required to be transferred to the investor education and protectionfund by the company iv. A. The management has represented that to the best of it'sknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the company toor in any other person(s) or entity(ies) including foreign entities("intermediaries") with the understanding whether recorded in writing orotherwise that the intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of thecompany ("ultimate beneficiaries") or provide any guarantee security or thelike on behalf of the ultimate beneficiaries; b. The management has represented that tothe best of it's knowledge and belief no funds have been received by the company from anyperson(s) or entity(ies) including foreign entities ("funding parties") withthe understanding whether recorded in writing or otherwise that the company shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the funding party ("ultimatebeneficiaries") or provide any guarantee security or the like on behalf of theultimate beneficiaries; and c. Based on such audit procedures that we have consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (i) and (ii) contain anymaterial mis-statement. D. The company has not declared or paid any dividend during theyear hence section 123 of the companies act 2013 is not applicable.

For c n k & associates llp
Chartered accountants
Firm registration no: 101961w / w – 100036
Himanshu kishnadwala
Partner
Membership no: 037391
Udin: 21037391aaaacy1898
Place: mumbai
Date: 8th june 2021

Annexure "a" to the independent auditor's report

(referred to in paragraph 1 under "report on other legal and regulatoryrequirements" in the independent auditor's report of even date to the members ofchowgule steamships limited ("the company") on the financial statements for theyear ended 31st march 2021)

(i) in respect of the company's fixed assets:

(a) the company is maintaining proper records showing full particulars includingquantitative details and situation of the fixed assets; (b) fixed assets were physicallyverified by the management during the year and no material discrepancies were noticedduring such verification; (c) according to the information and explanations given to usand the record examined by us and confirmations from the banks provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the company as at the balance sheet date; (ii) thecompany did not hold inventory during the year; hence clause 3(ii) of the order is notapplicable; (iii) during the year the company has granted a long-term unsecured loan to aparty covered in the register maintained under section 189 of the companies act 2013. A.In our opinion the rate of interest and other terms and conditions of the grant of suchloans are not prima facie prejudicial to the company's interest.; b. The said loan isrepayable in financial year 2024-25; c. In respect of the aforesaid loans the interestthereon is overdue for more than ninety days.

(iv) in our opinion and according to the information and explanations given to us inrespect of the loans given by the company during the year the provisions of section 185and 186 have been complied with. The company has not made any investments or given anyguarantees or provided any security during the year.

(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 theinformation and explanations given to us the company is not required to maintain costrecords prescribed by the central government under sub-section (1) of section 148 of thecompanies act 2013; (vii) (a) the company is regular in depositing undisputed statutorydues including provident fund income-tax goods and service tax cess profession tax andany other material statutory dues as applicable with the appropriate authorities andthere are no undisputed statutory dues outstanding as at 31st march 2021 for a period ofmore than six months from the date they become payable; employee state insurance is notapplicable to the company; (b) according to the information and explanations given to usthe statutory dues not deposited on account of disputes pending before appropriateauthorities are as under:

(amounts in lakhs)
Name of the statute Nature of dues Amount Period to which the amount relates Forum where the matter is pending
The tamil nadu general sales tax act 1959 Sales tax *237.00 Fy 1995-96 High court of madras

* rs 47.40 lakhs paid as deposit

(viii) according to the records of the company examined by us and the information andexplanations given to us the company does not have loans or borrowings from banksfinancial institution and government as at the balance sheet date. The company has notissued any debentures.

(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. The company has notraised any term loans during the year; (x) according to the information and explanationsgiven to us and to the best of our knowledge no fraud by the company or on the company byits officers or employees has been noticed or reported during the course of our audit;

(xi) in our opinion and according to information and explanations given to us themanagerial remuneration has been paid in accordance with requisite approvals mandated bythe provisions of section 197 read with schedule v of the companies act 2013; (xii) thecompany is not a nidhi company and therefore the provisions of clause 3 (xii) of the orderare not applicable to the company; (xiii) in our opinion and according to information andexplanations given to us the company has complied with the provisions of section 177 and188 of the companies act 2013 where applicable for all the transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements as required by the applicable accounting standards; (xiv) the company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Therefore clause 3(xiv) is notapplicable to the company; (xv) according to the information and explanations given to usand based on our examination of the records of the company during the year the companyhas not entered into non cash transactions with directors or persons connected with them.Accordingly clause 3(xv) of the order is not applicable to the company; (xvi) accordingto the information and explanations given to us and based on our examination of therecords of the company the company is not required to be registered under section 45-iaof the reserve bank of india act 1934.

For c n k & associates llp
Chartered accountants
Firm registration no: 101961w / w – 100036
Himanshu kishnadwala
Partner
Membership no: 037391
Udin: 21037391aaaacy1898
Place: mumbai
Date: 8th june 2021

Annexure "b" to the independent auditor's 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 chowgulesteamships limited ("the company") as of 31st march 2021 in conjunctionwith our audit of the standalone financial statements of the company for the year ended onthat date. Management's responsibility for internal financial controls

The board of directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the company considering the essential components of internalcontrol stated in the guidance note on audit of internal financial controls over financialreporting issued by the institute of chartered accountants of india ("icai").These responsibilities include the design implementation and maintenance of adequateinternal financial controls with reference to financial statements of the company thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 deemed tobe prescribed under section 143(10) of the companies act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of internalfinancial controls and both issued by the icai. Those standards and the guidance noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements of the company were established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements of the company and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks 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 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 to the best of our information and according to the explanations givento us the company has in all material respects internal financial controls withreference to financial statements of the company and such internal financial controls overfinancial reporting were operating effectively as at 31st march 2021 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
Firm registration no: 101961w / w – 100036
Himanshu kishnadwala
Partner
Membership no: 037391
Udin: 21037391aaaacy1898
Place: mumbai
Date: 8th june 2021

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