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Dolphin Offshore Enterprises (India) Ltd.

BSE: 522261 Sector: Oil & Gas
NSE: DOLPHINOFF ISIN Code: INE920A01011
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NSE 00:00 | 21 Jan 50.45 -0.35
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OPEN 50.95
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VOLUME 12319
52-Week high 138.75
52-Week low 43.15
P/E
Mkt Cap.(Rs cr) 85
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 50.95
CLOSE 50.75
VOLUME 12319
52-Week high 138.75
52-Week low 43.15
P/E
Mkt Cap.(Rs cr) 85
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dolphin Offshore Enterprises (India) Ltd. (DOLPHINOFF) - Auditors Report

Company auditors report

To the Members of Dolphin Offshore Enterprises (India) Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of DolphinOffshore Enterprises

(India) Limited (the ‘Company') which comprise the Balance Sheet as at 31stMarch 2018 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flows and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as the ‘Standalone Ind AS FinancialStatements').

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 preparation of thesestandalone Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards prescribed under Section 133of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing 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 standalone Ind AS financial statements are freefrom 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 judgement 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.

Basis for Qualified Opinion

We are unable to assess the recoverability of following financial assets of the Companyas stated in:

a. Note No. 41(a) to the standalone Ind AS financial statements regarding tradereceivable and accrued income aggregating Rs 1317.77 lakhs receivable from an entitywhich has been declared sick and in respect of which a Scheme of Rehabilitation is underimplementation;

b. Note No. 41(b) to the standalone Ind AS financial statements regarding advanceaggregating Rs 213.18 lakhs (31st March 2017 - Rs 213.18 lakhs) recoverable from avendor which has not been refunded / adjusted for a considerable period of time; and

c. Note No. 41(f) to the standalone Ind AS financial statements regarding tradereceivable which includes '2520.49 lakhs; (31stMarch 2017-'2512.94 lakhs) due from acharter hire contract. The said hirer had disputed the claim and had raised counter claimfor damages of Rs 1583.03 lakhs against the Company.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion paragraph above the aforesaid standalone including Ind AS financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia including the Ind AS of the state of affairs (financial position) of the Company asat 31st March 2018 and its loss (financial performance including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to:

a. Note No. 41 (c) to the standalone Ind AS financial statements regarding an amountof Rs. 293.26 lakhs recoverable from a vendor for which the claim is yet to be made onthe vendor;

b. Note No. 41(d) to the standalone Ind AS financial statements with regard tonon-availability of confirmations of balances in respect of receivables and payables; and

c. Note No. 41(e) to the standalone Ind AS financial statements regarding finalisationof the claim on the customer for the year 2013-14 and 2014-15. The Company had incurredadditional expenditure for executing additional work in terms of an EPC contract. TheCompany had quantified the value of extra work done at Rs. 10359.19 lakhs and hadcommenced discussions with the customer for acceptance of its claim. Out of the claiminvoices for Rs. 2482.49 lakhs have been raised on the customer and the balance amount ofRs. 7876.70 lakhs accrued in the current financial year was reported under other currentassets pending finalisation of the claim by the customer.

Our opinion is not modified in respect of these matters.

Other Matter

The comparative financial information of the Company for the year ended 31stMarch 2017 and the transition date opening Balance sheet as at 1st April 2016included in these standalone Ind AS financial statements are based on the previouslyissued standalone financial statements prepared in accordance with the Companies(Accounting Standards) Rules 2006 audited by other auditors vide their report for theyear ended 31st March 2017 and 31st March 2016 dated 17thMay 2017 and 27th May 2016 respectively have expressed modified opinion onthose standalone financial statements as adjusted for the differences in the accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus.

Our opinion is not modified in respect of this matter.

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 in terms of Section 143(11) of the Act we give in theAnnexure ‘A' a Statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by Section 143(3) of the Act we report that:

(a) we have sought and except for the matter described in the Basis for QualifiedOpinion paragraph above 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 the Statement of Cash Flowsand the Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account;

(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act;

(e) on the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 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 standalone Ind AS financial statements - (Refer Note 34 to the Ind ASfinancial statements);

(ii) the Company has long-term contracts as at 31st March 2018 for whichthere were no material foreseeable losses. The Company did not have any derivativecontracts; and

(iii) there is no delay in transferring amounts required to be transferred toInvestor Education and Protection Fund by the Company.

SHARP & TANNAN

Chartered Accountants

Firm's Registration No.109928W

by the hand of

Edwin P. Agustine

Partner

Membership No. 043385

Mumbai 28th May 2018

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 of our report of even date)

(i) (a) The Company is maintaining proper records showing

full particulars including quantitative details and situation of fixed assets.

(b) As explained to us these fixed assets have been physically verified by themanagement in accordance with a phased programme of verification which in our opinion isreasonable considering the size of the Company and nature of its assets. The frequency ofphysical verification is reasonable and no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us the title deeds ofimmovable properties are held in the name of the Company.

(ii) As explained to us inventories have been physically verified by the managementduring the year. In our opinion the frequency of such verification is reasonable. Nomaterial discrepancies were noticed on verification between the physical stocks and thebook records. As per the information given to us the procedures of physical verificationof inventory followed by the management are in our opinion reasonable and adequate inrelation to the size of the Company and the nature of its business.

(iii) According to the information and explanations give to us the Company has notgranted loans secured or unsecured to companies firms limited liability partnerships orother parties covered in the register maintained under Section 189 of the Act.Accordingly the Paragraph 3(iii) of the Order is not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act.

(v) According to the information and explanations given to us the Company has compliedwith the directives issued by the Reserve Bank of India and the provisions of Sections 73to 76 and other relevant provisions of the Act and the rules framed thereunder with regardto the acceptance of deposits. Further as informed no Order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any Courtor any Tribunal on the Company in respect of the aforesaid deposits.

(vi) According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under Section 148(1) of the Act and therules framed thereunder.

(vii) (a) According to the information and explanations given

to us the Company is not regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax service tax duty ofcustoms duty of excise value added tax goods and services tax cess and any otherstatutory dues where applicable to the appropriate authorities and there have beenserious delays in a large number of cases.

(b) According to the information and explanations given to us the particulars ofincome tax sales tax service tax and value added tax as at 31st March 2018 which havenot been deposited on account of a dispute pending are as under:

Name of the Statute Nature of the disputed dues Amount (Rs lakhs)* Period to which the amount relates Forum where disputes are pending
Income Tax Act 1961 Tax Interest and Penalty 98.59 1990-91 to 2000-01 Income Tax Appellate Tribunal
46.27 2006-07
Income Tax Act 1961 Tax Interest and Penalty 24.94 2005-06 Assessing Officer
Income Tax Act 1961 Tax Interest and Penalty 339.49 2010-11 Assistant Commissioner of Income Tax
61.43 2012-13
Income Tax Act 1961 Tax Interest and Penalty 808.59 2011-12 Commissioner of Income Tax Appeals
Service Tax under Finance Act 1994 Tax Interest and Penalty 18585.92 2010-11 to 2014-15 Commissioner CGST & Central Excise Belapur
Sales Tax Laws Tax Interest and Penalty 1494.49 2005-06 to 2013-14 Joint Commissioner of Sales Tax Mumbai

(*net of pre-deposit paid in getting the stay / appeal admitted)

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions and banks exceptfor cash credit wherein the borrowings had exceeded the sanctioned limits which hassince been repaid. The Company has not issued any debentures. The Company has not borrowedany funds from the Government. Accordingly the Paragraph 3(viii) of the Order is notapplicable to the Company.

(ix) According to the information and explanations given to us the Company has notraised monies by way of initial public offer or further public offer (including debtinstruments). Accordingly the Paragraph 3 (ix) of the Order is not applicable to theCompany.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyfraud by the Company or any fraud on the Company by its officers or employees noticed orreported during the year nor have we been informed of such case by management.

(xi) According to the information and explanations given to us the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi company. Accordingly the Paragraph 3 (xii) of the Order is not applicable to theCompany.

(xiii) According to the information and explanations given to us all the transactionswith the related parties are in compliance with Sections 177 and 188 of the Act. Therelevant details of such related party transactions have been disclosed in the financialstatements etc. as required under applicable accounting standard.

(xiv) According to the information and explanations given to us the Company had notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly the Paragraph 3 (xiv) of the Order isnot applicable to the Company.

(xv) According to the information and explanations given to us the Company had notentered into any non-cash transactions with directors or persons connected with him duringthe year. Accordingly compliance with the provisions of Section 192 of the Act is notapplicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

SHARP & TANNAN

Chartered Accountants

Firm's Registration No.109928W

by the hand of

Edwin P. Agustine

Partner

Membership No. 043385

Mumbai 28th May 2018

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) of our report of even date)

Report on the Internal Financial Controls under Section 143(3)(i) of the Companies Act2013 (the ‘Act')

We have audited the internal financial controls over financial reporting of DolphinOffshore Enterprises (India) Limited

(the ‘Company') as of 31st March 2018 in conjunction with our audit ofthe Standalone Ind AS Financial Statements of the Company for the year ended on 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 Reporting (the‘Guidance Note') issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor's 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 and the Standards on Auditing issued by ICAI and specified underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that: (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial 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 of 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

SHARP & TANNAN

Chartered Accountants Firm's Registration No.109928W by the hand of

Edwin P. Agustine

Partner

Membership No. 043385

Mumbai 28th May 2018