You are here » Home » Companies » Company Overview » Chowgule Steamships Ltd

Chowgule Steamships Ltd.

BSE: 501833 Sector: Infrastructure
NSE: CHOWGULSTM ISIN Code: INE490A01015
BSE 00:00 | 22 May 3.69 -0.16
(-4.16%)
OPEN

3.69

HIGH

3.69

LOW

3.69

NSE 05:30 | 01 Jan Chowgule Steamships Ltd
OPEN 3.69
PREVIOUS CLOSE 3.85
VOLUME 614
52-Week high 7.74
52-Week low 2.25
P/E 6.59
Mkt Cap.(Rs cr) 13
Buy Price 3.68
Buy Qty 200.00
Sell Price 4.04
Sell Qty 1000.00
OPEN 3.69
CLOSE 3.85
VOLUME 614
52-Week high 7.74
52-Week low 2.25
P/E 6.59
Mkt Cap.(Rs cr) 13
Buy Price 3.68
Buy Qty 200.00
Sell Price 4.04
Sell Qty 1000.00

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("the Company") which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information. (hereinafter referred to as "financialstatements").

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 amendedand other accounting principles generally accepted in India of the state of affairs ofthe Company as at 31st March 2019 the loss and total comprehensive incomechanges 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.

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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sr no Key audit matter Auditor's response
1 Transactions with related parties: Principal audit procedures
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. Our Audit approach included the following: Confirming the regulatory requirements for the identification of related parties and reporting of transactions with these related parties
(Refer Note no. 34 to the standalone financial statements.) 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.
Sr no Key audit matter Auditor's response
2 Impairment of financial assets Principal audit approach.
The Company has significant investments in Equity and Preference shares of its Wholly owned subsidiary ("WOS") as well as receivables against loan and sale of assets. The management has tested the same for impairment and concluded that there is no provision necessary in respect of the above. Our audit approach included the following: Perusal of the Audited financial statements of the subsidiary companies and inquiry with the management regarding the possibility of impairment of the same;
(Refer Note no. 5 6 & 14 to standalone financial statements) Obtained an understanding of the valuation of the subsidiaries based on future cash flows of the subsidiaries;
Obtained an understanding of the nature of arrangements having regard to the remedies available to the Company in case of default;
3 Evaluation of uncertain tax positions Principal audit approaches
The Company has uncertain tax positions including matters under long litigations (Refer Note no. 26 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;
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 financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are 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 Ind AS and other accounting principles generally acceptedin India specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

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.

Those 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 Standalone Financial Statementsthat individually or in aggregate make 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 audit work; and (ii) to evaluate the effect ofany identified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that 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 AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from the Directors as on 31stMarch 2019 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2019 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".

(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 withthe provisions of section 197 of the Act; (h) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company has disclosed the impact of pendinglitigations on its financial position in its financial statements – Refer Note 26 tothe financial statements; ii. The Company did not have any long-term contracts includingderivative contracts for which there were material foreseeable losses; iii. There has beenno delay in transferring amounts required to be transferred to the Investor Educationand Protection Fund by the Company.

For C N K & Associates LLP
Chartered Accountants
Firm Registration No: 101961W / W – 100036
Himanshu Kishnadwala
Place: Mumbai Partner
Date: 16th May 2019 Membership No: 37391

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 2019)

(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 based on the examination of the agreement for sale andconfirmations from the Banks provided to us we report that the title deeds comprisingall the immovable properties of land and buildings which are freehold are held in thename of the Company as at the Balance Sheet date; (ii) The inventory has been physicallyverified by the Management at reasonable intervals during the year and no materialdiscrepancies have been noticed on such verification. The Company does not have inventoryas at 31st March 2019; (iii) During the year the Company has granted ashort-term unsecured loan to a party covered in the register maintained under Section 189of the Companies Act 2013. a. In our opinion the rate of interest and other terms andconditions of the grant of such loans are not prima facie prejudicial to the Company'sinterest; b. The above loan is repayable on demand; c. In respect of the aforesaid loansthere is no amount which 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 anydeposits within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder to the extent notified; (vi) According to the information and explanations given tous the Company is not required to maintain cost records pursuant to the Companies (CostRecords and Audit) Amendment Rules 2016 and prescribed by the Central Government undersub-section (1) of section 148 of the Companies Act 2013; (vii) (a) The Company is regularin depositing undisputed statutory dues including provident fund income-tax duty ofcustoms goods and service tax cess professional tax and any other material statutorydues as applicable with the appropriate authorities and there are no undisputedstatutory dues outstanding as at 31st March 2019 for a period of more thansix months from the date they become payable; Employee State insurance is not applicableto the Company; (b) According to the information and explanations given to us thestatutory dues not deposited on account of disputes pending before appropriate authoritiesare 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 has not defaulted in repayment of loans orborrowings from Banks. The Company neither has borrowings from any Financial Institutionnor Government as at the balance sheet date. The Company has not issued 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 explanations given to us and to the best of ourknowledge no fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the course of our audit; (xi) In our opinion and according toInformation and explanations given to us the managerial remuneration has been paid inaccordance with requisite approvals mandated by the provisions of section 197 read withSchedule V of the Companies Act 2013; (xii) The Company is not a Nidhi Company andtherefore the provisions of clause 3 (xii) of the Order are not applicable to the Company;(xiii) In our opinion and according to information and explanations given to us theCompany is in compliance with the provisions of section 177 and 188 of the Companies Act2013 where applicable for all the transactions with the related parties and the detailsof related party transactions have been disclosed in the Financial Statements etc. asrequired by the applicable accounting standards; (xiv) The Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Therefore clause 3(xiv) is not applicable to theCompany; (xv) According to the information and explanations given to us and based on ourexamination of the records of the Company during the year the Company has not enteredinto non cash transactions with Directors or persons connected with him. Accordinglyclause 3(xv) of the order is not applicable to the Company; (xvi) According to theinformation and explanations given to us and based on our examination of the records ofthe Company the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For C N K & Associates LLP
Chartered Accountants
Firm Registration No: 101961W / W – 100036
Himanshu Kishnadwala
Place: Mumbai Partner
Date: 16th May 2019 Membership No: 37391

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 2019 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 internalfinancial controls with reference to financial statements of the Company that wereoperating 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 internal financial controls with reference to financialstatements of the Company were established and maintained and if such controls operatedeffectively 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 an internal financial controls withreference to financial statements of the Company and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2019 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For C N K & Associates LLP
Chartered Accountants
Firm Registration No: 101961W / W – 100036
Himanshu Kishnadwala
Place: Mumbai Partner
Date: 16th May 2019 Membership No: 37391