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Shahi Shipping Ltd.

BSE: 526508 Sector: Infrastructure
NSE: N.A. ISIN Code: INE825D01016
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NSE 05:30 | 01 Jan Shahi Shipping Ltd
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OPEN 5.51
CLOSE 5.51
VOLUME 1
52-Week high 8.90
52-Week low 3.50
P/E
Mkt Cap.(Rs cr) 8
Buy Price 5.04
Buy Qty 8.00
Sell Price 4.99
Sell Qty 460.00

Shahi Shipping Ltd. (SHAHISHIPPING) - Auditors Report

Company auditors report

TO THE MEMBERS OF SHAHI SHIPPING LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying Standalone financial statements of SHAHI SHIPPINGLIMITED ("the Company") which comprise the Balance Sheet as at March 312019and the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (here in afterreferred to as "standalone Ind AS financial statements")

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 ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with relevant rules issued thereunder.

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 adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

AUDITORS' 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 the 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 judgment 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'sBoard of Directors as well as evaluating the overall presentation of the standalone IndAS financial 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.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 312019 and its profit total comprehensive income its cash flowsand the changes in equity for the year ended on that date except for following matter:

(a) The other financial assets shown in the balance sheet includes Rs. 645.23 lakhs ofinterest subsidy receivable from Central Government and Inland Waterways Authority. Torecover the same the petition is pending. The ultimate outcome of the matter cannotpresently be determined. So we cannot form any opinion on liability that may result.

(b) During the year one barge "MV Royal Sharavati" used by the company wasseized by the Police Crime Branch Thane in connection with transportation of theft HighSpeed Diesel (HSD). The management has explained that the Company has been wronglyinvolved in the said complain since there is no theft or fraud done by the Company oragainst the Company and therefore pending investigation the said Barge was also releasedon indemnity by the owner of India first logistic Ltd. Further we have been informed thereis no FIR or charge sheet is filed again the Company or its Directors nor any documents inthis matter have been made available for our perusal. So we cannot form any opinion onliability that may result.

We have considered the disclaimer reported over above in determining the nature timingand extent of audit tests applied in our audit of the financial statements of the Companyand the disclaimer does not affect our opinion on the financial statements of the Company.

Our opinion on the standalone financial results is modified for the above matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1 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 the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind ASfinancial statements comply with theIndianAccounting Standards prescribed under section 133 ofthe Act read with relevant rulesissued thereunder.

e) On the basis of the written representations receivedfrom the directors as on March312019 taken onrecord by the Board of Directors none of the directorsis disqualified ason March 312019 from beingappointed as a director in terms of Section 164(2) ofthe Act;

f) With respect to the adequacy of the internal financialcontrols over financialreporting of the Company andthe operating effectiveness of such controls refer toourseparate Report in "Annexure A"

g) With respect to the other matters to be includedin the Auditor's Report inaccordance with Rule 11of the Companies (Audit and Auditors) Rules 2014as amended inour opinion and to the best of ourinformation and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements. Refer note 27 to the standaloneInd AS financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if anyon long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2 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"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For B. P. Shah & Co.

Chartered Accountants

ICAI Firm Registration No.109517W

Pathik Shah Partner

Membership No. 138847

Mumbai: May 29th 2019

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 of ShahiShipping Limited on the standalone financial statements for the year ended March 31 2019.

(i) The Company has maintaining records showing particulars including quantitativedetails & situation of fixed assets.

(a) Some fixed assets have been physically verified by the management during the yearin accordance with phased program of verification adopted by the company. No materialdiscrepancies between the book records and physical inventory were noticed in respect ofassets physically verified during the year.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for the following:

(Rs. In Lakhs)
Particulars (Office Premises) Amount
Gross Block as at 31 March 2019 2.34
Net Block as at 31 March 2019 0.71

(ii) The Company is in Shipping business therefore Clause of the above mentioned orderregarding inventory and its physical verification etc. do not apply in its case. TheCompany does purchase stores and spare parts for its ships & barges which are directlytreated as consumed as and when supplied to its ships & barges. Thus paragraph 2 (i)(ii) and (iii) of the order is not applicable.

(iii) The Company has not granted loans secured or unsecured to companies firm orother parties covered in the register maintained under section 189(2) of the act and hencesub clause (a) (b) (c) are not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans and investments made.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public in accordance with the provision ofsection 73 to 76 of the Act and Rules framed there under.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act 2013 for any of the services rendered by thecompany.

(vii) a) According to the information and explanations given to us and according to thebooks and records as produced and examined by us in our opinion the undisputed materialstatutory dues in respect of provident fund employees state insurance sales-taxincome-tax service tax customs duty excise duty value Added Tax cess and othermaterial statutory dues as applicable have been generally regularly deposited by theCompany during the year with the appropriate authorities except the following dues. Theextent of the arrears of statutory dues outstanding as at 31/03/2019 for a period of morethan six months from the date beca me payable are as follows:

Statutory Dues Amount of Arrears
Income Tax (FY: 2011-2012) 0.85 Lakhs
Income Tax (TDS FY: 2017-18) 0.20 Lakhs
Professional Tax 0.97 Lakhs
Maharashtra Labour Welfare Board 0.06 Lakhs

b) According to the information and explanation given to us there are no dues ofIncome Tax Sales Tax Service Tax Customs Duty Excise Duty or Value Added Taxoutstanding on account of any dispute.

(viii) Based on our audit procedures and on the basis of information and explanationsgiven by the management we are of the opinion that the company has not defaulted in therepayment of dues to financial institutions banks governments. There are no debentureholders. However the company has made delays in repayment of term loan dues of Dena Bankas stated below:

Instalment Due Month Date of Payment Amount
January 2019 11/04/2019 2.42 Lakhs
February 2019 24/04/2019 2.43 Lakhs
March 2019 19/05/2019 2.42 Lakhs

(ix) The Company has not applied for any Term Loan and has not raised money by way ofInitial public offer / further public offer (including debt instruments) during the year.Accordingly paragraph 3(ix) of the Order is not applicable.

(x) Based upon the audit procedures performed and as per the information andexplanations given to us we have neither come across any instance of fraud on or by thecompany its officers or employees noticed or reported during the period nor have webeen informed of such case by the management. However during the year one barge "MVRoyal Sharavati" used by the company was seized by the Police Crime Branch Thane inconnection with transportation of theft High Speed Diesel (HSD). The management hasexplained that the Company has been wrongly involved in the said complain since there isno theft or fraud done by the Company or against the Company and therefore pendinginvestigation the said Barge was also released on indemnity by the owner of India firstlogistic Ltd. Further we have been informed there is no FIR or charge sheet is filed againthe Company or its Directors nor any documents in this matter have been made available forour perusal.

(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion company is not a Nidhi Company. Therefore the provisions ofclause (xii) of paragraph 3 of the order are not applicable to the company.

(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanation given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe period under review.

(xv) According to the information and explanation given to us and based on ourexamination of the records of the company the company has not entered into any non-cashtransactions during the period with directors or persons connected with him. Accordinglyparagraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanation given to us and based on ourexamination of the records of the company the company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For B. P. Shah & Co.
Chartered Accountants
ICAI Firm Registration No.109517W
Pathik Shah
Partner
Mumbai: May 29th 2019 Membership No. 138847

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of ShahiShipping Limited on the standalone financial statements for the year ended March 312019.

We have audited the internal financial controls over financial reporting of ShahiShipping Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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.

Disclaimer of Opinion

According to the information and explanation given to us the Company has notestablished its internal financial control over financial reporting on criteria based onor considering 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. Because of this reason we are unable to obtain sufficientappropriate audit evidence to provide a basis for our opinon whether the Company hadadequate internal financial controls over financial reporting and whether such internalfinancial controls were operatively effectively as at March 312019.

We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the financial statements of the Company andthe disclaimer does not affect our opinion on the financial statements of the Company. OurOpinion is modified in respect of this matter.

For B. P. Shah & Co.
Chartered Accountants
ICAI Firm Registration No.109517W
Pathik Shah
Partner
Membership No. 138847
Mumbai: May 29th 2019