GOL Offshore Ltd.
|BSE: 532786||Sector: Infrastructure|
|NSE: GTOFFSHORE||ISIN Code: INE892H01017|
|BSE 00:00 | 04 Mar||GOL Offshore Ltd|
|NSE 05:30 | 01 Jan||GOL Offshore Ltd|
|BSE: 532786||Sector: Infrastructure|
|NSE: GTOFFSHORE||ISIN Code: INE892H01017|
|BSE 00:00 | 04 Mar||GOL Offshore Ltd|
|NSE 05:30 | 01 Jan||GOL Offshore Ltd|
GOL Offshore Limited
Report on the Standalone Financial Statements
We were engaged to audit the accompanying standalone financial statements of M/s GOLOffshore Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2016 Profit and Loss Statement and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters mentioned insection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
This responsibility also includes the 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 adequate internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
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 accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Companys Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Standalone financial statements.
Basis for Qualified Opinion
The Company has investment in equity/redeemable preference shares of wholly ownedsubsidiary KEI-RSOS Maritime Limited and the carrying amount as at March 31 2016 is Rs.21374 Lakhs the balance of loan outstanding is Rs. 3502 Lakhs and a further sum of Rs4423 Lakhs is due as Trade Receivables including Rs. 1164 Lakhs recognized as income inthe current year. The Company has also issued corporate guarantee to a Bank amounting toRs. 14168 Lakhs against which borrowing from bank outstanding on March 31 2016 is Rs.3329 Lakhs. As per the latest available audited financial statements of KEI-RSOS MaritimeLimited the net worth of the company has fully eroded and the cash flows are under stressas some of their assets are not earning and no impairment test has been carried out formaking provision if any required. There are disputed debtors and claims against thatcompany which are subject matter of arbitration proceedings for which no provision is madein the accounts of that company. As stated in Note no 30 to the financial statements noprovision has been made for the diminution in the value of investments the amount ofloans and trade receivables aggregating to Rs. 29299 Lakhs and possible liability thatmay arise due to devolvement of corporate guarantee mentioned above. If due provision wasmade income from charter hire would be lower by Rs. 1 164 Lakhs expenses would behigher by Rs. 28135 Lakhs and loss for the year higher by Rs. 29 299 Lakhs withconsequent effect on investments receivables and long term loans and advances andshareholders funds with consequent effect on cash flow statement for a like amount.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the matters described in the Basis for Qualified Opinionparagraph the standalone financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March312016; and of its losses and Cash Flows for the year ended on that date;
Emphasis of Matter
We draw attention to
i. Note: 39 of the financial statements regarding the continuing default in repaymentof Loans including loans recalled and corporate guarantees invoked/ recovery and windingup proceedings initiated for reasons stated therein. The current liabilities are in excessof current assets by Rs. 99036 Lakhs. The appropriateness of going concern assumptionclassification of borrowings/assets given as a security and Hedge Accounting is dependenton the actions proposed to be taken by management/ JLF as detailed in the said note.
ii. Note nos. 34 36 & 38 wherein the reasons and basis for making provisionsagainst investments in and loans to subsidiaries and provisions for impairment of fixedassets have been detailed.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure I a statement on the matters specified inParagraphs 3 and 4 of the said Order to the extent applicable.
2. As required by section 143(3) of the Act we report that: a) We sought and obtainedall the information and explanations which to the best of our knowledge and belief werenecessary 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 Profit and Loss Statement and Cash Flow Statement dealt withby this report are in agreement with the books of account.
d) Except to the extent mentioned in our Basis of Qualified Opinion paragraph above inour opinion the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis ofMatter paragraph and those on unpaid undisputed statutory dues and pending litigationsreferred to in Para No. (i)A below may have an adverse effect on the functioning of theCompany.
f) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct.
g) Our reservation relating to the maintenance of accounts and other matters connectedtherewith are as stated in the Basis for Qualified Opinion paragraph.
h) With respect to the adequacy of internal financial controls over financial reportingof the company and the operating effectiveness of such controls refer to our separatereport in Annexure II and
i) With respect to the other matters to be included in the Auditors 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:
A. The Company has pending litigations disclosed as contingent liabilities in its NoteNo.29 in addition to recovery/winding-up proceedings by creditors as mentioned in Note 39to the financial statements as well as in basis of Qualified Opinion paragraph the impactif any on the final settlement of the litigations is not ascertainable at this stage.
B. The Company has made provision as required under the applicable law or accountingstandards as adopted for material foreseeable losses relating to long term contracts andderivative contracts and its appropriateness is subject to achieving matters mentioned inthe Emphasis of Matter paragraph.
C. There were no delays in transferring undisputed amounts which were required to betransferred to the Investor Education and Protection Fund by the company during the yearexcept an amount of INR 4.21 Lakhs declared in 2007 and 2008 which has not beentransferred on account of legal disputes.
ANNEXURE I TO THE AUDITORS REPORT
Annexure referred to in paragraph 1 of our report of even date on the standaloneFinancial Statement of GOL Offshore Limited for the year ended March 31 2016 tothe extent applicable.
(i) a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;
b) We have been informed that the major fixed assets of the company consisting ofFleet Rigs and I.T Equipments have been physically verified by the managementduring the year. In our opinion the company has a program of verification which isreasonable having regard to the size of the company and the nature of its assets andoperations and we have been informed that no material discrepancies were noticed on suchverification.
c) As explained to us the title deeds of all the Immovable properties are held in thename of the Company. Since the title deeds are lodged with lenders originals of the samecould not be verified by us.
(ii) We have been informed by the Management that the physical verification ofInventory is conducted as per the preset cyclical programme on monthly basis during theyear on all large vessels in operation and no material discrepancies were noticed. In ouropinion the frequency of such physical verification of Inventory is reasonable. In respectof inventory on smaller vessels a system of physical verification of inventory as of orclose to the year end is to be introduced.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.Therefore the provisions of clause 3(iii)(a) to3(iii)(c) of the said Order are not applicable to the Company.
(iv) The Company has complied with the provisions of Section 185 and 186 of theCompanies in respect of the Loans Guarantees Investments and Securities given by it.
(v) The company has not accepted deposits in accordance with directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act and the rules framed there under are not applicable to thecompany.
(vi) According to the information and explanations given to us we are of the opinionthat prima-facie the company is not required to maintain cost records prescribed as perthe Order issued by the Central Government under section 148 (1) of the Companies Act2013.
(vii) (a) As per the information and explanations furnished to us and according to ourexamination of the records of the Company the Company has been generally regular indepositing undisputed statutory dues on account of Employee State Insurance and otherstatutory dues as applicable to the company with the appropriate authorities during theyear except for Provident Fund Profession Tax Advance TaxSelf-Assessment Tax TDSService Taxand Works Contract Tax where there have been serious delays in a number ofcases. Undisputed amounts payable outstanding for a period of more than six months fromthe date they became payable are as stated below:
(b) According to the information and explanation given to us and as per the records ofthe company examined by us there are no unpaid disputed taxes due as on 31stMarch 2016 except for the following:
(viii) According to information and explanation given to us and as per our verificationof the records of the company the company has defaulted in repayment of its dues to banksand financial institutions during the year. Following are the details of the default daysfor the financial year 2015-16 in repayment of dues: (Rs. in Lakhs)
During the year Federal Bank had sold the outstanding loan amount to ARC as result ofwhich the continuing default was made good and the new agreed terms have been consideredfor reporting under this clause.
In addition to the above continuing defaults in payment of dues to banks and financialinstitutions were noticed. The details of continuing defaults as at the balance sheet dateare given below:
(Rs. in Lakhs)
(ix) According to the information and explanation given to us on as overall basis andutilization certificate obtained from a Chartered Accountant in respect of two term loansand on the basis of records verified by us nothing has come to our attention that termloan has not been applied for the purpose for which the loans were obtained. During theyear no monies have been raised through public offer.
(x) According to the information and explanation given to us and the records of thecompany examined by us no material fraud on or by the Company has been noticed orreported during the course of our audit.
(xi) The company has complied with the relevant section 177 & 188 of the CompaniesAct 2013 in respect of related party transactions and details have been disclosed in thefinancial statements as required in Accounting Standard 18.
(xii) The provision of clauses 3 (xi) (xii) (xiv) (xv) & (xvi) of the Order arenot applicable to the Company.
ANNEXURE - II TO THE INDEPENDENT AUDITORS REPORT
Annexure referred to in para 2 (h) of our Report of even date on the standalonefinancial statements of GOL Offshore Limited for the year ended March 31 2016.
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 GOLOffshore Limited ("the Company") as of March 31 2016 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys 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 companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that
(1) Pertain 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 authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the companys assets that could havea 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 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.
Emphasis of Matter
We draw attention to Note No 42 to the financial statements regarding certain weakness/deficiencies regarding internal control systems and how the same have been mitigated/ areproposed to be mitigated. Our report is not qualified in respect of the above.